Cisco Systems Inc. is the leading company in solving many networking problems, and it has progressed from being an equipment provider, and it has currently become a full fledge solution provider. The company has penetrated to various markets that deal with communication, data networking, and it has emerged as a leader of innovation, technology, quality and services (Paulson, 2001). For a long time, Cisco has maintained reliability, scalability, service, speed and realistic pricing compared to other networking companies in the industry.
Currently the total strength of Cisco Systems Inc. is 34, 000 employees, and it captures more than 80% of the networking communication Equipment Industry. Cisco’s headquarters are located in San Jose, California, but it operates in all parts of the globe. Additionally, the company has offices in countries of Europe, Asia, Africa, Caribbean islands and even the Middle Eastern countries. Cisco Company provides a lasting solution to many businesses and makes them more productive and efficient in execution of their tasks (Morgan & Gonzales, 2004). Additionally, the company makes storage of information more manageable and ensures that the data is secure and mobile.
It was found in 1984 by Leonaid Bosack together with his wife Sandy J. Lerner. The two founders of Cisco Systems were computer specialists at Stanford University, and the idea to start their own company grew as the result of their daily projects in the University which involved connecting together various computer networks within the university with the aim of improving all operations within the University, as well as increasing efficiency in execution of various tasks. They first developed “multiprotocol” router with microcomputers which relied on two or more networks. They even developed “multiprotocol” router for computers that had different operating systems (Pearlson, 2001). Through this project, they allowed those networks to interact with each other by deciphering, funneling and translating data between them (Rybaczyk, 2005).
During the launching of the company, Leonaid Bosack explained that their work mainly involved networking various networks to increase efficiency and effectiveness of many operations in different organizations. He also claimed that it would play a fundamental role in improving the execution of many tasks in different organizations. Cisco’s networking technology provided the solution for many problems that lots of organizations experienced in coordinating their daily operations. Their technology enabled the linking of all the disparate computer networks in the globe together in a way similar to those different telephone networks get linked together globally (Hill, 2002).
The technology that was introduced by Cisco offered functionality for the global Web. Cisco grew and developed its operations as the worldwide corporate Intranets and Internet continued to grow in terms of importance. With an early traction in the industry rapid growth, Cisco Systems Company quickly managed to emerge a leading company within the data networking equipment market (Yost, 2009). Additionally, Cisco was capable of competing with other industries that provided networking services to various organizations and public institutions. Due to its high quality of products and services, it managed to gain a competitive edge over competitors at the market.
Around 1998, most routers that powered the Internet in many organizations globally were Cisco’s products. Although the core products of Cisco’s company are router switches, its product line has been expanded, and now it contains a wide range of networking products and other networking solutions. These include dial-up and other access solutions, Web site management, network management software and Internet appliances (Agoulmine, 2011).
The broad product line of Cisco Systems Inc. enabled it to provide all its customers with an end to end or the complete networking solution. For instance, more 50% of about 500 companies were satisfied with the products and services provided by Cisco Systems Inc. This was so because Cisco’s networking products enhanced the operations of many companies and made companies efficient in execution of their daily tasks. Additionally, the high quality products provided by Cisco gave the company a competitive edge in different market segments where it offered its products. By 1998, Cisco Systems Inc. had managed to emerge as number one or number two in 14 out of 15 market segments which competed with other companies that provided networking products and services (Maggiora, 2009). This implied that Cisco enjoyed a competitive advantage over aggressive competitors at the market, and it has been able to maintain its competitive advantage until now.
As result of its ability to provide high quality products and services, Cisco System Inc. was perceived as reliable and credible solution for both large and small scale organization in many parts of the world. Even industrial analysts admitted that Cisco Systems had taken advantage of the available opportunities in many organizations in terms of providing permanent solutions to networking problems in them. Therefore, Cisco Systems Inc. enjoyed a competitive advantage at the networking market as well a strong customers’ base globally.
In 1996, Cisco Systems Inc. joined the telecom equipment market worth $250 billion. This market was undertaking radical changes as the result of fast advances in technology. Before Cisco Systems Inc entered into the networking market, there were only three different types of networks which comprised computer networks used to transmit data, broadcast networks used to transmit video and phone networks used to transmit voice (Kurose & Ross, 2005). Significant progress in digitalization had allowed data, video and voice to be converted into numerous computer languages. In turn, this made transmission of data, voice and video possible in more than one network in more economical and efficient manner than the process of using three separate networks. As the result, a lot of phone companies started replacement of their old networks that only supported transmission of voice with new and effective networks, which had the capability of carrying data, voice and video. During the time when Cisco Systems Inc. was positioning its products at this market, there was a very stiff competition from other networking companies and Cisco was competing with larger group of aggressive competitors than it had since it was started. The main competitor included Nortel and Lucent Technologies. However, in 1998, Cisco System Inc. emerged as victorious one against its rivals at the networking market when Sprint selected Cisco Systems Inc. being the main supplier of its new telephone and data networks.
Cisco Systems Inc. obtained its first funding from Sequoia Capital, which was a venture capital firm, and it went public around February 1990. Cisco closed its first trading day with a market value of $222 million. After the end of 8 1/2 years, its market value reached $100 billion, and this made Cisco Systems Inc. reach that mark faster than any other company in the history, and broke Microsoft’s previous record of more than 10 years. From 1989 to around 1998, the revenue of Cisco Systems Inc. increased at a compound yearly rate of 89%, which was increase from $28 million to $8.5 billion. Despite stiff competition at the market and entry of more firms in the networking industry, Cisco sustained considerable growth potential at the networking market.