Cisco has moved to a "suite strategy" for selling collaboration technology, following the segment’s 12 percent drop in revenue for its fourth financial quarter of 2023.
In a bid to reverse this decline, Cisco is now selling collaboration solutions as part of a suite, which it will also do with its security portfolio as revenue in this area fell flat.
Total revenue was up 16 percent, however, with all other segments achieving growth, including product revenue and secure agile networks, which were the top performers attaining 20 percent and 33 percent respectively.
Chuck Robbins, Chairman and Chief Executive Officer of Cisco, spoke about the repackaging of its collaboration products: “In certain areas of our portfolio like collaboration and security, we've moved to a suite strategy.
“We’re now packaging up the security portfolio in different suites, which allows for us to optimize the security specialist, or actually align them more effectively… that's the work that's been going on.
“As we continue to execute on this platform strategy, it certainly simplifies the selling cycle for some of these technologies.
Robbins continued: “We're trying to get the portfolio put together in a way that makes it easier and requires fewer subspecialists in the field as we move forward.”
The collaboration segment suffered mainly due to waning demand for devices and meetings.
Fortunately, this was partially counteracted by growth in cloud calling and cloud contact centre.
The order growth for both collaboration and security was “positive”, which has largely come from suites that include tools from these segments.
Robbins has already given a clear indication of what the collaboration suites will look like, with calling taking the “lead part of the suite”, along with a strong focus on its cloud contact centre due to its triple-digit growth in orders last quarter.
Future Guidance
With this new strategy factored in and weighed against its larger portfolio, Scott Herren, Chief Financial Officer of Cisco, provided the company’s guidance for the next quarter, Q1 2024, as well as for the whole year.
