Cisco related Press Releases

Cisco Reports First Quarter Earnings

Mike Dolan — Thu, 05 Nov 2009 11:16:48 -0500

Cisco Reports First Quarter Earnings

Announces $10 Billion Increase in Stock Repurchase Program

Cisco EVP and CFO Frank Calderoni discusses Q1 FY2010 earnings highlights

SAN JOSE, CA--(Marketwire - November 4, 2009) - Cisco (NASDAQ: CSCO)

Q1 Net Sales: $9.0 billion (decrease of 13% year over year)
Q1 Net Income: $1.8 billion GAAP; $2.1 billion non-GAAP
Q1 Earnings per Share: $0.30 GAAP (decrease of 19% year over year); $0.36 non-GAAP (decrease of 14% year over year)
Total Cash, Cash Equivalents and Investments: $35.4 billion

Cisco (NASDAQ: CSCO), the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its first quarter results for the period ended October 24, 2009. Cisco reported first quarter net sales of $9.0 billion, net income on a generally accepted accounting principles (GAAP) basis of $1.8 billion or $0.30 per share, and non-GAAP net income of $2.1 billion or $0.36 per share.

Commenting on the quarter, Chairman and Chief Executive Officer John Chambers noted, "Building off what we saw as a clear tipping point in Q4, our Q1 results continued to reflect strong sequential growth trends that meet or exceed expectations during normal economic times. We view the improving economic outlook, combined with solid execution on our growth strategy, as creating unparalleled opportunity to drive more value into the core of the network. Simply said, we believe that key market transitions across collaboration, virtualization and video will drive productivity and growth in network loads for the next decade, and are evolving even faster than expected."

Chambers continued, "Our ability to launch four proposed acquisitions, the ecosystem-shifting coalition with EMC/VMware, and five new products and industry solutions into the Cisco pipeline in the past few months alone underscore this momentum. Our build -- buy -- partner innovation engine is clearly running on all cylinders, while our operational machine is pulling costs out of the business even as we scale new models for growth. Execution and results over time will demonstrate the long-term impact of this vision and strategy -- but a new model of productivity based on collaboration is clearly emerging and we believe this may be the most profound opportunity for businesses in our 25 years as a company."

                                GAAP Results
                                ------------

                           Q1 2010        Q1 2009       Vs. Q1 2009
                       --------------  --------------  -------------
Net Sales              $  9.0 billion  $ 10.3 billion         -12.7%
                       --------------  --------------  -------------
Net Income             $  1.8 billion  $  2.2 billion         -18.8%
                       --------------  --------------  -------------
Earnings per Share     $         0.30 $          0.37         -18.9%
                       --------------  --------------  -------------



                               Non-GAAP Results
                               ----------------

                          Q1 2010         Q1 2009       Vs. Q1 2009
                       --------------  --------------  -------------
Net Income             $  2.1 billion  $  2.5 billion         -15.3%
                       --------------  --------------  -------------
Earnings per Share     $         0.36  $         0.42         -14.3%
                       --------------  --------------  -------------

In October 2009, the Financial Accounting Standards Board issued new accounting guidance related to revenue recognition. Cisco elected to adopt this accounting guidance early on a prospective basis for transactions originating or materially modified in the first quarter of fiscal 2010. Net sales for the first quarter of fiscal 2010 were approximately $50 million higher than the net sales that would have been recorded under the previous accounting guidance.

A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table on page 6.

Cisco will discuss first quarter results and business outlook on a conference call and webcast at 1:30 p.m. Pacific Time today. Call information and related charts are available at http://www.cisco.com/go/investors. A Q&A session with Cisco's Chairman and CEO John Chambers and CFO Frank Calderoni will also be available at http://newsroom.cisco.com. To view a video of Cisco's CFO discussing first quarter results, visit http://blogs.cisco.com.

Stock Repurchase Program Expanded

Cisco also announced that on November 4, 2009 its board of directors authorized up to $10 billion in additional repurchases of its common stock. Cisco's board had previously authorized up to $62 billion in stock repurchases. There is no fixed termination date for the repurchase program. The remaining authorized amount for stock repurchases under this program, including the additional authorization, is approximately $13.1 billion.

Other Financial Highlights

Cash flows from operations were $1.5 billion for the first quarter of fiscal 2010, compared with $2.7 billion for the first quarter of fiscal 2009, and compared with $2.0 billion for the fourth quarter of fiscal 2009.
Cash and cash equivalents and investments were $35.4 billion at the end of the first quarter of fiscal 2010, compared with $35.0 billion at the end of fiscal 2009.
During the first quarter of fiscal 2010, Cisco repurchased 76 million shares of common stock under the stock repurchase program at an average price of $22.99 per share for an aggregate purchase price of $1.8 billion. As of October 24, 2009, Cisco had repurchased and retired 2.9 billion shares of Cisco common stock at an average price of $20.47 per share for an aggregate purchase price of approximately $58.9 billion since the inception of the stock repurchase program.
Days sales outstanding in accounts receivable (DSO) at the end of the first quarter of fiscal 2010 were 32 days, compared with 34 days at the end of the fourth quarter of fiscal 2009, and compared with 29 days at the end of the first quarter of fiscal 2009.
Inventory turns on a GAAP basis were 11.6 in the first quarter of fiscal 2010, compared with 11.7 in the fourth quarter of fiscal 2009, and compared with 11.9 in the first quarter of fiscal 2009. Non-GAAP inventory turns were 11.3 in the first quarter of fiscal 2010, compared with 11.3 in the fourth quarter of fiscal 2009, and compared with 11.6 in the first quarter of fiscal 2009.

"Cisco's strong first quarter results represent two quarters of sequentially positive revenue growth and demonstrate our ability to execute on our innovation and operational excellence priorities," said Frank Calderoni, Cisco chief financial officer. "We delivered earnings per share on a GAAP basis of $0.30 and non-GAAP of $0.36, which were above our expectations, driven by balance across a broad portfolio and intense focus on execution. Our results validate our strategy and portfolio approach of balancing disciplined expense management with strategic investment, to drive continued profitability through varying economic environments."

Cisco Innovation

Cisco expanded its Cisco TelePresence™ portfolio with the single-screen, single-camera Cisco TelePresence System 1100 for multipurpose rooms. Service providers AT&T, BT, Orange, NTT, Tata Communications, Telefonica, Telstra and Telmex have announced commercial intercompany Cisco TelePresence service offerings.
Cisco announced its Borderless Networks Architecture strategy, together with announcing its new Integrated Services Router Generation 2 (ISR G2), which helps businesses and service providers simplify and scale delivery of on-demand, networked business services such as video and collaborative applications.
Cisco launched Cisco IronPort™ Web Usage Controls, a product designed to provide real-time content categorization to accurately identify up to 90 percent of "dark web" sites in the most egregious content categories.
Cisco and salesforce.com announced the Customer Interaction Cloud, a combined solution that uses a connector to integrate salesforce.com's Service Cloud 2 with Cisco® Unified Contact Center's functionality, empowering small and medium-sized companies to run their customer service function completely in the cloud.
Cisco announced the creation of a Smart Grid Ecosystem, with more than 25 initial partners, to facilitate the adoption of Internet Protocol (IP)-based communications standards for smart grids designed to benefit the energy industry as well as business and residential customers. Cisco also created a Smart Grid Technical Advisory Board made up of leading innovative utility and energy companies from around the world.

Select Customer Announcements

Tutor Perini Corporation, a leading civil and building construction company, is consolidating five data centers into one new facility which utilizes the Cisco Unified Computing System™ as its computing platform.
The Miami Dolphins National Football League franchise announced the deployment of Cisco TelePresence and Cisco StadiumVision™ systems to help fans "Live the Game" at Miami's Land Shark Stadium.
Kenya's Ministry of Information and Communications Technology launched the first network-enabled Pilot Pasha Centre in Kangundo with the aim of enhancing the livelihoods of local citizens and encouraging new micro-enterprises.
Cisco and Gale International expanded their relationship on Smart + Connected Communities under development in Korea's Songdo International Business District, with the aim of creating a repeatable model for smart, sustainable cities of the future.
German electricity company Yello Strom launched an energy-saving smart grid pilot to create an intelligent energy system that communicates over an IP network.

Select Acquisitions and Investments

Cisco announced a definitive agreement to acquire Starent Networks, Corp., a leading supplier of IP-based mobile infrastructure solutions targeting mobile and converged carriers.
Cisco announced a definitive agreement for Cisco to launch a recommended voluntary cash offer to acquire TANDBERG ASA, a global leader in video communications.

Editor's Note:

Q1 FY 2010 conference call to discuss Cisco's results along with its business outlook will be held at 1:30 p.m. Pacific Time, Wednesday, November 4, 2009. Conference call number is 888-848-6507 (United States) or 212-519-0847 (international).
Conference call replay will be available from 4:00 p.m. Pacific Time, November 4, 2009 to 4:00 p.m. Pacific Time, November 11, 2009 at 866-357-4205 (United States) or 203-369-0122 (international). The replay also will be available via webcast from November 4, 2009 through January 15, 2010 on the Cisco Investor Relations website at http://www.cisco.com/go/investors.
Additional information regarding Cisco's financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, November 4, 2009. Text of the conference call's prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with GAAP reconciliation information, will be available on the Cisco Investor Relations Website at http://www.cisco.com/go/investors.
A Q&A session with Cisco's Chairman and CEO John Chambers and CFO Frank Calderoni about Q1 FY 2010 results will be available at http://newsroom.cisco.com.
To view a video of Cisco's CFO discussing Q1 FY 2010 results, visit Cisco's blog site, The Platform, at http://blogs.cisco.com.

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Information about Cisco can be found at http://www.cisco.com. For ongoing news, visit http://newsroom.cisco.com.

This release may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among other things, statements regarding future events (such as the improving economic outlook and related opportunity, market transitions across collaboration, virtualization and video driving productivity and growth in network loads for the next decade, and the emergence of a new model of productivity based on collaboration and related business opportunity) and the future financial performance of Cisco that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market and other customer markets; the return on our investments in certain market adjacencies and geographical locations during the current economic downturn; the timing of orders and manufacturing and customer lead times; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; increased competition in our product and service markets, including the data center; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, intellectual property, antitrust, shareholder and other matters, and governmental investigations; natural catastrophic events; a pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales and engineering activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during the current economic downturn; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors, including relating to transactions to hedge foreign currency consideration for acquisitions; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Cisco's most recent report on Form 10-K. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco's most recent report on Form 10-K filed on September 11, 2009, as it may be amended from time to time. Cisco's results of operations for the three months ended October 24, 2009 are not necessarily indicative of Cisco's operating results for any future periods. Any projections in this release are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of this release.

This release includes non-GAAP net income, non-GAAP net income per share data, shares used in non-GAAP net income per share calculation, and non-GAAP inventory turns.

These non-GAAP measures are not in accordance with, or an alternative for measures prepared in accordance with, generally accepted accounting principles and may be different from non-GAAP measures used by other companies. In addition, these non-GAAP measures are not based on any comprehensive set of accounting rules or principles. Cisco believes that non-GAAP measures have limitations in that they do not reflect all of the amounts associated with Cisco's results of operations as determined in accordance with GAAP and that these measures should only be used to evaluate Cisco's results of operations in conjunction with the corresponding GAAP measures.

Cisco believes that the presentation of non-GAAP net income, non-GAAP net income per share data and shares used in non-GAAP net income per share calculation, when shown in conjunction with the corresponding GAAP measures, provides useful information to investors and management regarding financial and business trends relating to its financial condition and results of operations. In addition, Cisco believes that the presentation of non-GAAP inventory turns provides useful information to investors and management regarding financial and business trends relating to inventory management based on the operating activities of the period presented.

For its internal budgeting process, Cisco's management uses financial statements that do not include, when applicable, share-based compensation expense, amortization of acquisition-related intangible assets, other acquisition-related costs, enhanced early retirement benefits, the income tax effects of the foregoing, significant effects of retroactive tax legislation, and significant transfer pricing adjustments related to share-based compensation. Cisco's management also uses the foregoing non-GAAP measures, in addition to the corresponding GAAP measures, in reviewing the financial results of Cisco. In prior periods, Cisco has excluded other items that it no longer excludes for purposes of its non-GAAP financial measures; for example, effective in the third quarter of fiscal 2009, Cisco no longer excludes payroll tax on stock option exercises and effective beginning in fiscal 2010, Cisco no longer excludes in-process research and development as it is no longer expensed as a result of new accounting guidance. From time to time in the future, there may be other items that Cisco may exclude for purposes of its internal budgeting process and in reviewing its financial results.

For additional information on the items excluded by Cisco from one or more of its non-GAAP financial measures, refer to the Form 8-K regarding this release furnished today to the Securities and Exchange Commission.

Copyright ©2009 Cisco Systems, Inc. All rights reserved. Cisco, the Cisco logo, Cisco Systems, Cisco IronPort, Cisco StadiumVision, Cisco TelePresence, Cisco Unified Computing System, and IronPort are registered trademarks or trademarks of Cisco Systems, Inc. and/or its affiliates in the United States and certain other countries. All other trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company. This document is Cisco Public Information.

                  CONSOLIDATED STATEMENTS OF OPERATIONS
                  (In millions, except per-share amounts)
                                (Unaudited)

                                                    Three Months Ended
                                                --------------------------
                                                 October 24,   October 25,
                                                    2009          2008
                                                ------------  ------------
NET SALES:
Product                                         $      7,200  $      8,635
Service                                                1,821         1,696
                                                ------------  ------------
Total net sales                                        9,021        10,331
                                                ------------  ------------
COST OF SALES:
Product                                                2,486         2,981
Service                                                  647           669
                                                ------------  ------------
Total cost of sales                                    3,133         3,650
                                                ------------  ------------
GROSS MARGIN                                           5,888         6,681

OPERATING EXPENSES:
Research and development                               1,224         1,406
Sales and marketing                                    1,995         2,283
General and administrative                               440           395
Amortization of purchased intangible assets              105           112
In-process research and development                       --             3
                                                ------------  ------------
Total operating expenses                               3,764         4,199
                                                ------------  ------------
OPERATING INCOME                                       2,124         2,482

Interest income, net                                      54           195
Other income (loss), net                                  61           (72)
                                                ------------  ------------
Interest and other income, net                           115           123
                                                ------------  ------------
INCOME BEFORE PROVISION FOR INCOME TAXES               2,239         2,605
Provision for income taxes                               452           404
                                                ------------  ------------
NET INCOME                                      $      1,787  $      2,201
                                                ------------  ------------
Net income per share:
Basic                                           $       0.31  $       0.37
                                                ------------  ------------
Diluted                                         $       0.30  $       0.37
                                                ------------  ------------
Shares used in per-share calculation:
Basic                                                  5,767         5,881
                                                ------------  ------------
Diluted                                                5,871         5,972
                                                ------------  ------------



              RECONCILIATION OF GAAP TO NON-GAAP NET INCOME
                  (In millions, except per-share amounts)

                                                    Three Months Ended
                                                --------------------------
                                                 October 24,   October 25,
                                                    2009          2008
                                                ------------  ------------

GAAP net income                                 $      1,787  $      2,201

  Share-based compensation expense(1)                    321           304
  Payroll tax on stock option exercises(2)                --             1
  In-process research and development(3)                  --             3
  Amortization of acquisition-related
   intangible assets                                     149           166
  Other acquisition-related costs(4)                       4           122
                                                ------------  ------------
  Total adjustments to GAAP income before
   provision for income taxes                            474           596
                                                ------------  ------------

  Income tax effect                                     (145)         (194)
  Effect of retroactive tax legislation(5)                --          (106)
                                                ------------  ------------
  Total adjustments to GAAP provision
   for income taxes                                     (145)         (300)

Non-GAAP net income                             $      2,116  $      2,497
                                                ------------  ------------
Diluted net income per share:
GAAP                                            $       0.30  $       0.37
                                                ------------  ------------
Non-GAAP                                        $       0.36  $       0.42
                                                ------------ ------------
Shares used in diluted net income
 per share calculation:
GAAP                                                   5,871         5,972
                                                ------------  ------------
Non-GAAP                                               5,880         5,979
                                                ------------  ------------


(1) Share-based compensation expense for the first quarter of fiscal 2010
    and fiscal 2009 includes $28 million and $22 million, respectively, of
    share-based compensation related to acquisitions.

(2) Effective in the third quarter of fiscal 2009, Cisco no longer excludes
    payroll tax on stock option exercises for purposes of its non-GAAP
    financial measures.

(3) Effective beginning in fiscal 2010, Cisco no longer excludes in-process
    research and development for purposes of its non-GAAP financial
    measures as it is no longer expensed as a result of new accounting
    guidance.

(4) Other acquisition-related costs for the first quarter of fiscal 2010
    includes a $42 million mark-to-market impact related to transactions to
    hedge a portion of the foreign currency consideration of an announced,
    pending business combination.

(5) In the first quarter of fiscal 2009, the Tax Extenders and Alternative
    Minimum Tax Relief Act of 2008 reinstated the U.S. federal R&D tax
    credit, retroactive to January 1, 2008. GAAP net income for the first
    quarter 2009 included a $106 million tax benefit related to fiscal 2008
    R&D expenses. Non-GAAP net income for the first quarter of fiscal 2009
    excluded the $106 million tax benefit related to fiscal 2008 R&D
    expenses.

Certain reclassifications have been made to prior period amounts to conform to the current period's presentation.

Additional reconciliations between GAAP and non-GAAP financial measures are provided in the tables that follow on page 10.

                        CONSOLIDATED BALANCE SHEETS
                              (In millions)
                               (Unaudited)

                                                 October 24,    July 25,
                                                    2009          2009
                                                ------------  ------------
ASSETS
Current assets:
  Cash and cash equivalents                     $      4,774  $      5,718
  Investments                                         30,591        29,283
  Accounts receivable, net of allowance
   for doubtful accounts of $216 at
   October 24, 2009 and July 25, 2009                  3,159         3,177
  Inventories                                          1,089         1,074
  Deferred tax assets                                  2,205         2,320
  Other current assets                                 2,879         2,605
                                                ------------  ------------

  Total current assets                                44,697        44,177

Property and equipment, net                            3,976         4,043
Goodwill                                              12,942        12,925
Purchased intangible assets, net                       1,552         1,702
Other assets                                           5,513         5,281
                                                ------------  ------------
TOTAL ASSETS                                    $     68,680  $     68,128
                                                ------------  ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable                              $        729  $        675
  Income taxes payable                                    97           166
  Accrued compensation                                 2,263         2,535
  Deferred revenue                                     6,397         6,438
  Other current liabilities                            3,676         3,841
                                                ------------  ------------

  Total current liabilities                           13,162        13,655

Long-term debt                                        10,273        10,295
Income taxes payable                                   1,755         2,007
Deferred revenue                                       2,874         2,955
Other long-term liabilities                              590           539
                                                ------------  ------------

Total liabilities                                     28,654        29,451

Shareholders' equity                                  40,026        38,677
                                                ------------  ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY      $     68,680  $     68,128
                                                ------------  ------------

Certain reclassifications have been made to prior period amounts to conform to the current period's presentation.

                  CONSOLIDATED STATEMENTS OF CASH FLOWS
                              (In millions)
                               (Unaudited)

                                                    Three Months Ended
                                                --------------------------
                                                 October 24,   October 25,
                                                    2009          2008
                                                ------------  ------------

Cash flows from operating activities:
   Net income                                   $      1,787  $      2,201
Adjustments to reconcile net income to net
 cash provided by operating activities:
   Depreciation, amortization, and other
    noncash items                                        429           393
   Share-based compensation expense                      321           304
   Provision for doubtful accounts                         4            17
   Deferred income taxes                                  93            26
   Excess tax benefits from share-based
    compensation                                         (21)          (17)
   In-process research and development                    --             3
   Net (gains) losses on investments                     (47)           70
   Change in operating assets and liabilities,
    net of effects of acquisitions:
      Accounts receivable                                 38           453
      Inventories                                         (8)            8
      Lease receivables, net                            (100)          (65)
      Accounts payable                                    52           (35)
      Income taxes payable                              (291)          (83)
      Accrued compensation                              (313)         (197)
      Deferred revenue                                  (160)           (2)
      Other assets                                      (186)         (405)
      Other liabilities                                 (110)           47
                                                ------------  ------------
Net cash provided by operating activities              1,488         2,718
                                                ------------  ------------
Cash flows from investing activities:
   Purchases of investments                           (9,537)      (12,461)
   Proceeds from sales of investments                  2,769         6,833
   Proceeds from maturities of investments             5,664         3,509
   Acquisition of property and equipment                (160)         (361)
   Acquisition of businesses, net of cash
    and cash equivalents acquired                         --          (288)
   Change in investments in privately held
    companies                                            (32)          (11)
   Other                                                  43           (60)
                                                ------------  ------------
Net cash used in investing activities                 (1,253)       (2,839)
                                                ------------  ------------
Cash flows from financing activities:
   Issuance of common stock                              634           224
   Repurchase of common stock                         (1,869)       (1,002)
   Excess tax benefits from share-based
    compensation                                          21            17
   Other                                                  35          (112)
                                                ------------  ------------
Net cash used in financing activities                 (1,179)         (873)
                                                ------------  ------------
Net decrease in cash and cash equivalents               (944)         (994)
Cash and cash equivalents, beginning of period         5,718         5,191
                                                ------------  ------------
Cash and cash equivalents, end of period        $      4,774  $      4,197
                                                ------------  ------------

Certain reclassifications have been made to prior period amounts to conform to the current period's presentation.

                     ADDITIONAL FINANCIAL INFORMATION
                              (In millions)
                               (Unaudited)

                                                 October 24,    July 25,
                                                    2009          2009
                                                ------------  ------------
CASH AND CASH EQUIVALENTS AND INVESTMENTS
Cash and cash equivalents                       $      4,774  $      5,718
Fixed income securities                               29,548        28,355
Publicly traded equity securities                      1,043           928
                                                ------------  ------------
Total                                           $     35,365  $     35,001
                                                ------------  ------------
INVENTORIES
Raw materials                                   $        167  $        165
Work in process                                           33            33
Finished goods:
  Distributor inventory and deferred
   cost of sales                                         403           382
  Manufactured finished goods                            307           310
                                                ------------  ------------
Total finished goods                                     710           692
Service-related spares                                   147           151
Demonstration systems                                     32            33
                                                ------------  ------------
Total                                           $      1,089  $      1,074
                                                ------------  ------------
PROPERTY AND EQUIPMENT, NET
Land, buildings, building improvements,
 and leasehold improvements                     $      4,501  $      4,618
Computer equipment and related software                1,569         1,823
Production, engineering, and other
 equipment                                             5,273         5,075
Operating lease assets                                   242           227
Furniture and fixtures                                   471           465
                                                ------------  ------------
                                                      12,056        12,208
Less accumulated depreciation and
 amortization                                         (8,080)       (8,165)
                                                ------------  ------------
Total                                           $      3,976  $      4,043
                                                ------------  ------------
OTHER ASSETS
Deferred tax assets                             $      2,112  $      2,122
Investments in privately held companies                  728           709
Lease receivables, net(1)                              1,043           966
Financed service contracts(2)                            648           676
Loan receivables(3)                                      712           537
Other                                                    270           271
                                                ------------  ------------
Total                                           $      5,513  $      5,281
                                                ------------  ------------
DEFERRED REVENUE
Service                                         $      6,194  $      6,496
Product
  Unrecognized revenue on product shipments
   and other deferred revenue                          2,551         2,490
  Cash receipts related to unrecognized
   revenue from two-tier distributors                    526           407
                                                ------------  ------------
Total product deferred revenue                         3,077         2,897
                                                ------------  ------------
Total                                           $      9,271  $      9,393
                                                ------------  ------------
Reported as:
Current                                         $      6,397  $      6,438
Noncurrent                                             2,874         2,955
                                                ------------  ------------
Total                                           $      9,271  $      9,393
                                                ------------  ------------

Note:

(1) The current portion of lease receivables, net, which was $689 million
    and $626 million as of October 24, 2009 and July 25, 2009,
    respectively, is recorded in other current assets.

(2) The current portion of financed service contracts, which was
    $1.0 billion and $940 million as of October 24, 2009 and July 25, 2009,
    respectively, is recorded in other current assets. These financed
    service contracts primarily relate to technical support services, and
    the associated revenue is deferred and recognized ratably over the
    period during which the services are to be performed, which is
    typically from one to three years.

(3) The current portion of loan receivables, net, which was $328 million
    and $236 million as of October 24, 2009 and July 25, 2009,
    respectively, is recorded in other current assets.



               SUMMARY OF SHARE-BASED COMPENSATION EXPENSE
                              (In millions)

                                                    Three Months Ended
                                                --------------------------
                                                 October 24,   October 25,
                                                    2009          2008
                                                ------------  ------------

Cost of sales -- product                        $         12  $         11
Cost of sales -- service                                  33            31
                                                ------------  ------------
Share-based compensation expense
 in cost of sales                                         45            42
                                                ------------  ------------

Research and development                                  97            94
Sales and marketing                                      113           113
General and administrative                                66            55
                                                ------------  ------------
Share-based compensation expense
 in operating expenses                                   276           262
                                                ------------  ------------
Total share-based compensation expense          $        321  $        304
                                                ------------  ------------

The income tax benefit for share-based compensation expense was $85 million and $82 million for the first quarter of fiscal 2010 and fiscal 2009, respectively.

          RECONCILIATION OF SHARES USED IN THE GAAP AND NON-GAAP
                 DILUTED NET INCOME PER SHARE CALCULATION
                              (In millions)

                                                    Three Months Ended
                                                --------------------------
                                                 October 24,   October 25,
                                                    2009          2008
                                                ------------  ------------
Shares used in diluted net income per share
 calculation -- GAAP                                   5,871         5,972
Effect of share-based compensation expense                 9             7
                                                ------------  ------------
Shares used in diluted net income per share
 calculation -- Non-GAAP                               5,880         5,979
                                                ------------  ------------



             RECONCILIATION OF GAAP TO NON-GAAP COST OF SALES
                          USED IN INVENTORY TURNS
                              (In millions)

                                                Three Months Ended
                                        ----------------------------------
                                        October 24,  July  25,  October 25,
                                           2009        2009        2008
                                        ----------  ----------  ----------
GAAP cost of sales                      $    3,133  $    3,074  $    3,650
  Share-based compensation expense             (45)        (47)        (42)
  Amortization of acquisition-related
   intangible assets                           (44)        (39)        (54)
  Enhanced early retirement benefits            --         (28)         --
                                        ----------  ----------  ----------
Non-GAAP cost of sales                  $   3,044   $    2,960  $    3,554
                                        ----------  ----------  ----------

New Global Telecom Certifies Cisco SPA500 Series Phones for Small Business VoIP

Mike Dolan — Mon, 26 Oct 2009 11:55:06 -0400

GOLDEN, CO -- 10/26/09 -- New Global Telecom Inc. (NGT), the nation's largest provider of wholesale hosted IP Telephony Communication solutions in the U.S. today announced it recently certified the Cisco SPA500 series of IP phones for use in conjunction with NGT's fully managed VoIP services. NGT and Cisco plan to jointly market Small Business VoIP services and equipment to partners and end user businesses.

"Cisco's new generation of phones and invigorated approach to the SMB space embraces the growing need for fully managed, proven solutions for small businesses," said John Guillaume, senior vice president of sales and marketing for NGT. "We are excited to jointly promote a series of webinars, field events, and co-marketing engagements for potential resellers and agents."

The Cisco SPA500 family of phones comes with full duplex speakerphone and enhanced speech technology including support for HD voice (G.722). Additionally, the phones are Cisco XML enabled for integration with applications to the device. Cisco's SPA 500 series phones complete the Small Business CPE offering of IADs, switches, and phones for Hosted VoIP service.

NGT provides Cable Operators, VARs, agents and resellers highly-scalable, proven solutions for adding hosted and trunk-based VoIP and unified communications solutions to their service offerings. NGT's Private Label and Agent offerings are turnkey and include all the necessary elements to quickly deploy VoIP and unified communications. NGT and Cisco are hosting agent webinars in November and December titled "Telephony 101 for Technology Solution Providers." Interested partners may sign up for the agent program and training at www.ngt.com/ciscoagent or contact ciscoagent@ngt.com.

About New Global Telecom

New Global Telecom, Inc. is largest provider of wholesale hosted IP Telephony Communication solutions in the U.S. NGT enables leading VARs, MSOs, Service Providers and Agents to provide nationwide, managed IP communication services to their customers through its proven channel ready solutions. The company's services deliver a high quality, complete communication solution to address business end-user needs. NGT's Network Performance Platform is a cornerstone of the service suites, and is an industry-leading network approach to delivering predictable end-user quality. NGT services include a complete range of telephony features, nationwide phone service, unified communications, worldwide audio & web conferencing, desktop fax services, E911 service, training and other sales and marketing support. For more information, please visit www.ngt.com.

New Global Telecom Contact:
Julie Buchanan
303-239-1021
Email Contact

Study, Sponsored by Verizon and Cisco, First to Quantify Improved Performance From Advanced Collaboration

Mike Dolan — Wed, 14 Oct 2009 22:11:47 -0400

Study, Sponsored by Verizon and Cisco, First to Quantify Improved Performance From Advanced Collaboration

Frost & Sullivan Research Finds Dramatic Return on Investments in Advanced Collaboration Tools; IP Networks Growing as Business Platform
News Release ShareThis

NEW YORK - October 14, 2009 -

Organizations around the world that deploy the most advanced Internet-protocol-based collaboration technologies achieve more than twice the return on their collaboration investment and perform better than their less collaborative peers, according to a new Frost & Sullivan study released Wednesday (Oct. 14).

"Meetings Around the World II: Charting the Course of Advanced Collaboration," sponsored by Verizon and Cisco, examines how professionals in businesses and government agencies get their work done by using advanced collaboration tools such as voice over Internet protocol (VoIP), instant messaging or meeting via high-definition video or Cisco TelePresence^TM.

(NOTE: To access a social media release containing video and audio podcasts and other related online resources, visit: http://www.verizonbusiness.com/go/meetingsaroundtheworld.)

The study also introduces the industry's first quantitative model for a return on collaboration investment. The groundbreaking measurement, called the Return on Collaboration index, establishes a progressive impact of deploying advanced unified communications and collaboration (UC&C) technologies on business performance, and measures improvements in areas such as research and development, human resources, sales, marketing, investor relations and public relations.

The study found that businesses and government agencies deploying increasingly more sophisticated collaboration tools -- such as VoIP soft phones, immersive video and fixed mobile convergence -- saw a corresponding improvement in business results relative to the amount invested. The overall average Return on Collaboration (ROC) score was 4.2 -- meaning organizations received an average return of four times their investment in deploying collaboration technologies in terms of improvement across business-critical areas.

The organizations surveyed by the study reported that advanced collaboration such as UC&C enhances their ability to produce positive results. For example, research and development managers in organizations deploying UC&C reported that advanced collaboration tools enable products and solutions to be developed more quickly, with an improved chance of market success, a higher degree of quality, and a lower overall cost of development.

The new study builds on the 2006 Frost & Sullivan study -- "Meetings Around the World: The Impact of Collaboration on Business Performance" - which determined collaboration is a key driver of business performance and collaboration through communications technologies can provide a competitive advantage.

"'Meetings Around the World II' confirms and extends the key findings of the original study and builds on those conclusions," said Brian Cotton, vice president for information and communications technologies for Frost & Sullivan. "This latest research shows adopting progressively more advanced unified communications and collaboration tools can help organizations achieve a corresponding return on collaboration and improvement across all business functions. This return was most dramatic in the areas of sales, marketing, and research and development."

3,662 SMB, Enterprise Decision-Makers in 10 Countries

Frost & Sullivan in May 2009 conducted an online survey of 3,662 information technology (IT) or line-of-business decision-makers in organizations in 10 countries in Asia-Pacific, Europe and the U.S. The survey gauged attitudes and practices within small and medium-sized businesses (50 to 999 employees) and enterprises (1,000 or more employees) in the financial services, government, health care, high technology, professional services, manufacturing and retail industries.

The study was undertaken as organizations around the world grappled with a challenging economy, and results showed use of UC&C solutions are becoming increasingly popular. Nearly half (44 percent) of all organizations surveyed have deployed UC&C tools -- such as user presence on a device, document sharing, immersive video or Cisco TelePresence for near-lifelike visual communications, integrated voice, e-mail and instant messaging, and telephone features and management capabilities on mobile devices and the desktop.

The study also found that 40 percent of organizations that deploy UC&C plan to increase spending on this despite current economic conditions. In addition, more than 80 percent of organizations that have not deployed UC&C tools plan to deploy some form of them in the next two to three years.

Nancy Gofus, senior vice president of global business products for Verizon, said, "Based on this study, we see an era of advanced collaboration on the horizon. Organizations embracing unified communications and collaboration tools in an open, decentralized structure are enabling a more effective work style and cultivating a fertile ground for success. As organizations aspire to become advanced collaborators, even small steps taken along the way can immediately pay off."

Creating a Collaboration 'Network Effect'

The greatest impact of collaboration was where the largest numbers of people interacted for a common goal, including sales, research and development and marketing. By implementing more advanced UC&C tools, the study found, organizations could increase their return across all areas.

This finding suggests that teams using UC&C tools can benefit from a "network effect" -- a theory attributed to Robert Metcalfe, the co-inventor of Ethernet, that holds that the more users on a network, the more value is likely realized from it. While larger enterprises tended to receive greater collaboration returns, small and medium-sized businesses can increase returns by deploying progressively more advanced tools and expanding their reach beyond their organizations working with customers, partners and suppliers.

[For more information on attitudes toward collaboration around the world, go to: http://www.verizonbusiness.com/about/news/displaynews.xml?newsid=25390&mode=vzlong. To view a video discussing professionals' attitudes about collaboration, go to: http://www.youtube.com/watch?v=VzW8F-0kUbo]

Blair Crump, Verizon Business group president of worldwide sales, said: "Our customers increasingly are turning to us for consulting, design and implementation services to make the most of their IP connections as a platform for advanced collaboration. Our expert UC&C professional services capabilities combined with our comprehensive solutions portfolio can help organizations embrace this new work style and mobilize their workforce for a competitive advantage."

(NOTE: To see how Verizon Business customers CA and First American are embracing advanced collaboration to their business advantage, go to: http://www.verizonbusiness.com/about/news/displaynews.xml?newsid=25279&mode=vzlong⟨=en&width=530
and http://www.verizonbusiness.com/about/news/displaynews.xml?newsid=25386&mode=vzlong.)

"The Meetings Around the World II study confirms that collaboration is the next phase of the Internet and at the center of this phase is the network as a platform," said Carlos Dominguez, senior vice president for the office of the chairman and CEO, Cisco. "Having the right collaborative platform helps enable enterprises and organizations to speed decision making, increase productivity and improve interactions with their customers and partners, all designed to give them a competitive edge."

Verizon is a leading provider of collaboration and unified communications services, enabling organizations to conveniently and effectively collaborate, virtually anytime, anywhere, helping them improve response time and productivity without the costs and carbon emissions associated with business travel. With 30 years of experience delivering conferencing services, the company uses its global IP network to provide a wide array of advance collaboration and mobility tools to large-business and government customers around the world, including audio, video and Web conferencing; VoIP; contact center services; and managed and hosting solutions, as well as professional services capabilities.

Verizon Communications Inc. (NYSE:VZ), headquartered in New York, is a global leader in delivering broadband and other wireless and wireline communications services to mass market, business, government and wholesale customers. Verizon Wireless operates America's most reliable wireless network, serving more than 87 million customers nationwide. Verizon's Wireline operations provide converged communications, information and entertainment services over the nation's most advanced fiber-optic network. Wireline also includes Verizon Business, which delivers innovative and seamless business solutions to customers around the world. A Dow 30 company, Verizon employs a diverse workforce of more than 235,000 and last year generated consolidated operating revenues of more than $97 billion. For more information, visit www.verizon.com.

####
Media Contact:

Stefanie Scott, 512-495-6730

Cisco Helps Assure Internet's Future Amid Device Growth

Mike Dolan — Tue, 13 Oct 2009 11:01:31 -0400

Cisco Helps Assure Internet's Future Amid Device Growth
Cisco Bolsters IP NGN Architecture, Giving Service Providers the Most Scalable and Cost-Effective Path to IPv6
Photos

SAN JOSE, Calif., Oct. 13, 2009 - Cisco today announced significant enhancements to its Internet Protocol Next-Generation Network (IP NGN) architecture that are designed to secure the foundation of the Internet, which must accommodate the exponential increase of connected devices for highly secure, efficient video delivery and collaboration. With the new Cisco® Carrier-Grade IP Version 6 (IPv6) solution, Cisco helps enable service providers to effectively deal with the bottleneck created by the imminent depletion of IPv4 addresses. This new solution complements Cisco's IPv6 portfolio, the widest and most extensive in the market.

Now spanning from the core of the network to the home, Cisco's IPv6 capabilities have been expanded and added to a wide range of the company's routers and switches. Cisco is introducing new carrier-grade IPv6 capabilities to the Cisco CRS-1 Carrier Routing System for the network core and to the Cisco Aggregation Services Routers for the network edge. These new additions provide a cost-effective and efficient means to bridge to a full IPv6 next-generation network while extending the life of existing IPv4 addresses to smoothly manage that migration.
Highlights / Key Facts:

* An IP address is required for each device that connects to the Internet, and IPv6 is designated as the successor to IPv4, the first implementation used in the Internet and still the most widely used today.
* Exhaustion of IPv4 addresses is predicted for sometime in 2011, according to various sources, including potaroo.net, a Web site that tracks IPv4 address allocation by the Internet Assigned Numbers Authority. IPv4 has a finite set of unique addresses, numbering approximately 4 billion, which is rapidly depleting due to the ever-growing number of Internet-connected devices and smart devices.
* The industry foresaw this and developed IPv6, which has 340 undecillion unique addresses (3.4 x 1038), or more than 50 billion billion billion for each person on earth, more than enough to continue to support the demand for IP addresses. However, the protocols of IPv4 and IPv6 are not directly compatible, so migrating a network from IPv4 to IPv6 requires technology solutions to preserve IPv4 while executing a carefully orchestrated, step-by-step implementation plan.
* New Cisco IPv6 offerings, which expand on the existing Cisco IPv6 portfolio, are designed to address the current gap that service providers face in their IPv6 network evolution. They include:
o Cisco Carrier-Grade Services Engine for the Cisco CRS-1. Deployed deep in the core of service provider's network, where maximum Cisco IPv6 coverage can be obtained, this "industry first" supports large-scale network address translation (large-scale NAT or LSN) and offers the industry's highest scalability for translations and throughput.
o Cisco Carrier-Grade IPv6 Solution for the Cisco ASR Series. The new capabilities help enable LSN at the edge of a network in order to meet the needs of smaller or distributed IP NGNs.
o Cisco Services for the Carrier-Grade IPv6 Solution. As service providers strive to address customer demands, Cisco offers migration services to make the transition to IPv6 smoothly and in a cost-effective manner, thereby reducing risk to their IP NGN operations. The Cisco Services portfolio ranges from initial planning and IPv6 readiness assessment to turnkey design and implementation.
* New capabilities complement the industry's widest selection of IPv6 functionality. Now enabled across virtually the entire routing and switching portfolio, essential capabilities such as dual stack, IPv4-over-IPv6, and IPv6-over-IPv4 tunneling technologies work in conjunction with LSN capabilities to facilitate the migration to an all-IPv6 network.

Supporting Quotes:

* "The number of unallocated IPv4 addresses is dwindling and will be exhausted soon, slowing the future of the Internet," said Xavier Niel, chief strategy officer of FREE. "It is prudent to plan for this scenario, and we at FREE have taken specific steps to deal with it. We are pleased with Cisco's well-thought-out strategy and solution portfolio for customers to transition to IPv6. Its approach, which starts with preserving existing addressing, is a simple framework on the journey toward a complete IPv6 infrastructure."
* "IPv4 address exhaustion will cause huge problems for China Internet's growth, so we must make the IPv6 transition happen smoothly," said Xing Li, deputy director of CERNET Center in China. "For that, CERNET has been leading several new technology proposals in IETF. We are very pleased to see the Cisco IPv6 architectural approach to support the emerging tunneling and translation technologies."
* "The Internet is at the tipping point of its industrialization, where we have an exponential increase in the number of connected devices," said Kelly Ahuja, senior vice president and general manager, Service Provider Routing Technology Group at Cisco. "Cisco solutions have been instrumental in the Internet build-out since its inception. With these new IPv6 capabilities to complement our industry-leading IPv6 capable portfolio, we are able to help service providers address their immediate challenges as they preserve and preparetheir networks for long-term success, prosperity and business growth."

Supporting Resources:

* Cisco Carrier-Grade IPv6 Solution
* Cisco CRS-1 Carrier Routing System
* Cisco Aggregation Services Router Series
* Cisco Service Provider Solutions
* IPv6 Technology

Tags / Keywords:

Cisco, Internet Protocol Version 6, IPv6, Internet Protocol Version 4, IPv4, Cisco Carrier-Grade Services Engine, Cisco Carrier Routing System-1, CRS-1, Internet Protocol Next-Generation Network, IP NGN, Cisco ASR 1000 Series, ASR 1000, Kelly Ahuja, CERNET China, Free
About Cisco

Cisco, (NASDAQ: CSCO), is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.

Cisco Announces Agreement to Acquire Starent Networks

Jason Ankeny — Tue, 13 Oct 2009 10:48:31 -0400

Cisco® (NASDAQ: CSCO) and Starent Networks (NASDAQ: STAR) today announced a definitive agreement for Cisco to acquire Starent Networks. Starent Networks is a leading supplier of IP-based mobile infrastructure solutions targeting mobile and converged carriers. The Mobile Internet is at an inflection point as IP-enabled Smartphones and other connected mobile devices gain rapid acceptance. Service Providers have been actively investing in this market as global mobile data traffic is expected to more than double every year through 2013, according to the Cisco Visual Networking Index.

Under the terms of the agreement, Cisco will pay $35 per share in cash in exchange for each share of Starent Networks and assume outstanding equity awards for an aggregate purchase price of approximately $2.9 billion. The acquisition has been approved by the boards of directors of both companies.

The acquisition is expected to close during the first half of calendar year 2010; however, the close date is subject to customary closing conditions and regulatory reviews. Cisco expects the acquisition to be dilutive to non-GAAP earnings in fiscal years 2010 and 2011 and accretive to non-GAAP earnings in fiscal year 2012.

"We are very pleased that Starent Networks will be joining the Cisco team, and we believe their products and engineering talent will greatly benefit our Service Provider customers as they build out their Mobile Internet offerings," said John Chambers, Chairman and Chief Executive Officer.

"Cisco and Starent Networks share a common vision and bring complementary technologies designed to accelerate the transition to the Mobile Internet, where the network is the platform for Service Providers to launch, deliver and monetize the next generation of mobile multimedia applications and services," said Pankaj Patel, Senior Vice President/General Manager, Service Provider Business.

"Combining Cisco's strength in Video and IP with Starent Networks' leading mobile infrastructure solutions, creates a compelling portfolio of products that provides an integrated architecture to offer rich, quality multimedia experiences to mobile subscribers on 3G and 4G networks," said Starent Networks President and Chief Executive Officer Ashraf Dahod.

Starent Networks' mobile infrastructure solutions play an important role in enabling Service Providers to scale their mobile infrastructure and monetize their investments via differentiated experiences. The company provides the multimedia intelligence, core network functions and services to manage access from any 2.5G, 3G, and 4G radio network to a mobile operator's packet core network. Starent Networks' access-independent technology is deployed in CDMA2000 (1X, EV-DO), UMTS/HSPA and WiMax networks.

Prior to the close, Cisco and Starent Networks will continue to operate as separate companies. Upon completion of the transaction, Starent Networks will become the new Mobile Internet Technology Group led by Starent Networks' President and Chief Executive Officer Ashraf Dahod, within Cisco's Service Provider Business which is led by Pankaj Patel, Senior Vice President/General Manager.

Starent Networks was founded in 2000 and completed its initial public offering in 2007. The company is based in Tewksbury, Mass. and has approximately 1,000 employees worldwide. For the year ended Dec. 31, 2008, Starent Networks reported revenue of $254.1 million, up 74 percent from the prior year.

Editor's Note

Ned Hooper, Chief Strategy Officer and Senior Vice President, Consumer Business, Cisco; Pankaj Patel, Senior Vice President/General Manager, Service Provider Business, Cisco; and Starent Networks President and Chief Executive Officer Ashraf Dahod will host a joint investor call on Oct. 13 at 11:30 a.m. EDT to discuss the proposed transaction. The dial-in number is 888-788-8648 and 212-287-1646 for international callers. Replay of the event is available until Oct. 27 at 800-856-2254 and 402-280-9961 for international callers.

About Cisco

About Starent Networks

Starent Networks, Corp. is a leading provider of infrastructure solutions that enable mobile operators to deliver multimedia services to their subscribers. Starent Networks has created solutions that provide mobile operators with the functions and services needed for access, mobility management and call control in their networks. Through integrated intelligence and high performance capabilities, Starent Networks' solutions also enhance subscriber management, billing and session policy enforcement. The company's products are capable of supporting a wide range of mobile wireless networks, such as CDMA2000, UMTS/HSPA, LTE, WiFi, and WiMAX. Starent Networks' products have been deployed by over 100 mobile operators in 45 countries. Additional information about Starent Networks is available at www.starentnetworks.com.

# # #

Cisco, the Cisco logo and Cisco Systems are registered trademarks or trademarks of Cisco Systems, Inc. and/or its affiliates in the United States and certain other countries. Starent and the Starent Networks logo are registered trademarks or trademarks of Starent networks, Corp. in the United States and certain other countries. All other trademarks mentioned in this document are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company.

Salesforce.com and Cisco Partner to Deliver the New Face of Customer Service

Mike Dolan — Mon, 05 Oct 2009 12:45:33 -0400

Salesforce.com and Cisco Partner to Deliver the New Face of Customer Service

Salesforce.com's Service Cloud 2 and Cisco's Unified Communications combine to deliver a complete cloud computing solution for customer service

SAN FRANCISCO, Oct. 5 /PRNewswire-FirstCall/ -- Salesforce.com (NYSE: CRM), the enterprise cloud computing company, and Cisco (Nasdaq: CSCO) today announced a combined solution to deliver a complete contact center in the cloud. The Cisco and salesforce.com Customer Interaction Cloud brings together salesforce.com's Service Cloud 2 with Cisco Unified Communications. The solution empowers small and medium sized companies to run their customer service completely in the cloud. Salesforce.com and Cisco share a vision about moving technology into the cloud and leveraging social networking sites like Facebook, Twitter and Google to deliver services to their customers where they are already collaborating.

(Logo: http://www.newscom.com/cgi-bin/prnh/20050216/SFW105LOGO)

Cisco and Salesforce.com - Delivering the Contact Center in the Cloud

The combined solution utilizes a connector to integrate salesforce.com's Service Cloud 2 with Cisco Unified Contact Center's functionality. This allows customers to use the salesforce.com CRM application as their primary agent desktop while retaining full Cisco Unified Contact Center capabilities to operate a customer care or support center in any industry.
Through this offering, salesforce.com and Cisco are addressing a growing demand for cloud computing-based customer service solutions in the SMB market.
With the Customer Interaction Cloud, agents may become more productive, and customers can use the cloud to achieve a more rapid time to value with no hardware, no software, no data centers and no telephony equipment to install.
The solution was built to focus on organizations with 30 to 300 reps or agents and reflects both high market demand from prospects as well as requirements from existing customers.

The Future of Customer Service

Cisco has led the way in expanding the scope of customer care with the introduction of ground-breaking products such as Cisco Unified Contact Center which delivers intelligent contact routing for all media, call treatment, and network-to-desktop computer telephony integration (CTI) over an IP infrastructure. This helps enable companies to rapidly deploy a distributed contact center infrastructure.
Customers are increasingly turning to the cloud to answer their customer service questions. The Service Cloud 2 lets companies join the conversation with their customers, by providing a cost-effective solution that unites the contact center and the cloud to establish a new model for customer service. 8,000 companies have already selected the Service Cloud 2 for their customer service operations.
Built on the Force.com platform, the Service Cloud 2 transforms customer service through the power of cloud computing, and brings together industry leading cloud computing platforms like Google, Facebook, and Twitter to capture every conversation and utilize every community expert in the cloud. By capturing these conversations, the Service Cloud 2 empowers companies to deliver the expertise of the community to customers, agents and partners regardless of location or device - ensuring that the quality of customer service can be consistent across every channel.

Enabling Transformation from Cisco Unified Contact Center to Customer Collaboration

Cisco Collaboration Solutions improve and accelerate rich personal, team and customer experiences to help organizations drive innovation and improve decisions while building trust and accelerating team performance.
Customer care has seen significant changes in the last 10 years--with new capabilities such as multi-channel contact and introduction of IP-based contact centers--and customer service organizations are now looking to take this to the next level by forging collaborative relationships with their customers and elevating their customer care. This transformation to Customer Collaboration recognizes that customer interactions can take place anywhere online, in social media, blogs, wikis, forums, and online search.
Cisco's Collaboration Solutions and Cisco Unified Contact Center help companies smoothly integrate inbound and outbound voice calls with Internet applications such as real-time chat, web collaboration, and e-mail. Organizations can support customer interactions regardless of which communications channel the customer has chosen.

Comments on the News

"The Service Cloud 2 has seen tremendous momentum and validation from customers, prospects, and partners and truly represents the future of customer service," said Alex Dayon, senior vice president, customer service & support product line of salesforce.com. "The combination of Cisco's Unified Communications and salesforce.com's Service Cloud 2 will provide companies with a true cloud based option when it comes to their customer service needs. Companies will no longer have to manage routers, servers and switches when it comes to their contact center, they can focus on delivering the best customer service possible."
"In the decade since we entered the market, customers have validated Cisco's approach to the customer care market through tremendous adoption of our collaboration solutions," said John Hernandez, General Manager of Cisco's Customer Contact Business Unit. "Now together with salesforce.com and the Service Cloud 2, we're taking customers beyond the contact center to Customer Collaboration, where organizations can be more proactive and effective, create deeper relationships with their customers, and help build their brands through customer advocates. The rise of social media, and the confidence it has spawned amongst Internet users to engage, makes the possibility of collaboration much more of a reality."
"Effective customer service requires a right combination of CRM capabilities and communications mechanisms to properly capture and disseminate timely information," said Jeffrey M. Kaplan, Managing Director of THINKstrategies, Inc. and the founder of the SaaS Showplace. "This alliance allows companies to leverage Cisco and salesforce.com's mutual capabilities to deploy cloud-based, customer service solutions that can better serve their customers in an increasingly competitive environment."

Availability

The solution is currently scheduled to be generally available in the first quarter of calendar year 2010.
Salesforce.com and Cisco will each be offering the combined solution for sale. Details of pricing can be found on Cisco's and salesforce.com's respective websites.

Additional Resources

View more information about the Service Cloud 2 at http://www.salesforce.com/servicecloud2/ and about Cisco Unified Contact Center solutions at http://www.cisco.com/go/cc.

About Cisco

About salesforce.com

Salesforce.com is the enterprise cloud computing company. The company's portfolio of Salesforce CRM applications, available at http://www.salesforce.com/products/, has revolutionized the ways that companies collaborate and communicate with their customers across sales, marketing and service. The company's Force.com platform (http://www.salesforce.com/platform/) enables customers, partners and developers to quickly build powerful business applications to run every part of the enterprise in the cloud. Based on salesforce.com's real-time, multi-tenant architecture, Salesforce CRM and Force.com offer the fastest path to customer success with cloud computing.

As of July 31, 2009, salesforce.com manages customer information for approximately 63,200 customers including Allianz Commercial, Dell, Dow Jones Newswires, Japan Post, Kaiser Permanente, KONE, and SunTrust Banks. Any unreleased services or features referenced in this or other press releases or public statements are not currently available and may not be delivered on time or at all. Customers who purchase salesforce.com applications should make their purchase decisions based upon features that are currently available. Salesforce.com has headquarters in San Francisco, with offices in Europe and Asia, and trades on the New York Stock Exchange under the ticker symbol "CRM". For more information please visit http://www.salesforce.com, or call 1-800-NO-SOFTWARE.

Copyright (c) 2009 salesforce.com, inc. All rights reserved. Salesforce and the "no software" logo are registered trademarks of salesforce.com, inc., and salesforce.com owns other registered and unregistered trademarks. Other names used herein may be trademarks of their respective owners.

SOURCE salesforce.com

INX Deploys Unified Communications Solution for Springboard Non-Profit Consumer Credit Management

Jim O'Neill — Tue, 08 Jul 2008 14:18:06 -0400

HOUSTON--(BUSINESS WIRE)--INX Inc., (NASDAQ:INXI) announced today that it has been selected to design and deploy a Cisco unified communications solution for Springboard Non-Profit Consumer Credit Management’s national call center.

As the consumer credit crisis deepens, Springboard has seen large increases in demand and call volume as more people seek assistance. To scale their national counseling call center, Springboard required a communications solution to meet their demand growth. INX’s expertise and strong reputation as a professional services company were key in Springboard’s decision to choose INX to design, supply and implement a solution that will enable Springboard to add new employees, the majority of which are additional financial counselors. The new Cisco unified communications solution will be deployed throughout Springboard’s current facilities and includes their new 14,000 square foot building. As part of the government sponsored Hope Now Alliance, Springboard is providing credit counseling to the nation’s people, free of charge at (888) 955-HOPE. The added capacity of the new unified communications solution will help Springboard handle the normal 4,500 calls they receive daily, while allowing for continued growth to meet the nation’s needs for foreclosure prevention housing counseling.

Justin Waller, Senior Vice President of Operations at Springboard Non-Profit Consumer Credit Management said, “We are pleased to partner with INX to launch our new unified communications solution. This technology is vital to Springboard’s mission as we grow to meet the increasing demand by consumers and homeowners for our credit, budget and housing counseling services. As part of the Hope Now Alliance, Springboard is excited to have the added call capacity to better equip our employees to serve the people of the nation during this time of need.”

Mark Hilz, President and COO at INX said, “INX is excited to partner with Springboard and we are pleased that our solution will positively impact their ability to provide the nation needed consumer credit counseling.”

The project was valued at approximately $466,000 in hardware and services revenue for INX.

About Springboard Nonprofit Consumer Credit Management

Springboard is a nonprofit credit education and financial counseling organization founded in 1974. The agency offers personal financial education and assistance with debt, credit and money management through confidential counseling. Springboard is accredited by the Council on Accreditation, signifying high standards for agency governance, fiscal integrity, counselor certification and service delivery policies. The agency provides pre-bankruptcy counseling and debtor education as mandated by the bankruptcy reform law. Springboard is a HUD approved housing counseling agency and a member of the National Foundation for Credit Counseling, a national organization of nonprofit credit counseling agencies. The agency has several locations in California and offers face-to-face and nationwide phone counseling services. For more information on Springboard, call 1-800 WISE PLAN (1-800-947-3752) ext. 7888 or visit their web site at www.credit.org

About INX:

INX Inc. (NASDAQ: INXI - News) is an IT infrastructure Solutions firm delivering best-of-class “Business Ready Solutions” to enterprise organizations. We offer a suite of advanced technology solutions focused around the entire life-cycle of enterprise network and data center infrastructure. Our services are centered on the design, implementation and support of network infrastructure, including routing and switching, wireless, security, unified communications, and data center solutions such as storage and server virtualization. Our customers range from large enterprises organizations such as corporations, to public entities that include federal, state and local governmental agencies. Because of our focus, expertise and experience around implementing and supporting advanced technology solutions for enterprises, we believe we are well positioned to deliver superior solutions and services to our customers. Additional information about INX can be found on the Web at www.inxi.com.

Cisco Visual Networking Index Projects Global IP Traffic to Reach Over Half a Zettabyte(1) in Next Four Years

Jim O'Neill — Fri, 20 Jun 2008 06:12:55 -0400

SAN JOSE, Calif., June 16, 2008 - The Cisco® Visual Networking Index (VNI) Forecast for 2007-2012 was released today, providing key findings on a variety of consumer and business Internet Protocol (IP) networking trends driven largely by the increasing use of video and Web 2.0 social networking and collaboration applications. The combination of these technologies represents what is known as visual networking. Based on Cisco's analysis and the forecasts of independent analysts, the updated study is part of the company's ongoing effort to forecast the growth and usage of IP networking worldwide.

Cisco VNI projections indicate that IP traffic will increase at a combined annual growth rate (CAGR) of 46 percent from 2007 to 2012, nearly doubling every two years. This will result in an annual bandwidth demand on the world's IP networks of approximately 522 exabytes2, or more than half a zettabyte.

In the consumer market, the advent of rich online video communications and entertainment, as well as social networking, has greatly increased the impact of online video on the network. In 2012, Internet video traffic alone will be 400 times the traffic carried by the U.S. Internet backbone in 2000. Representative of this trend, Internet video has jumped from 12 percent of the global consumer Internet traffic in 2006 to 22 percent in 2007. Video on demand, IPTV, peer-to-peer (P2P) video, and Internet video are forecast to account for nearly 90 percent of all consumer IP traffic in 2012.

Global business IP traffic is forecast to grow strongly at a CAGR of 35 percent from 2007 to 2012. Increased broadband penetration in the small-business segment and the increased adoption of advanced video communications (such as Cisco TelePresence) in the enterprise are major drivers for business IP traffic growth. Business IP traffic will grow fastest in the developing markets and Asia-Pacific. In volume, North America will continue to have the most business IP traffic through 2012, followed by Asia-Pacific and Western Europe.

Additional key findings from the Cisco VNI Forecast include:

Global IP traffic will reach 44 exabytes per month in 2012, compared to less than seven per month in 2007.
By comparison, global IP traffic in 2002 was five exabytes which means that the volume of IP traffic in 2012 will be 100 times as large.
Monthly global IP traffic in December 2012 will be 11 exabytes higher than in December 2011, a single-year increase that will exceed the amount by which traffic has increased in the eight years since 2000.
Mobile data traffic will roughly double each year from 2008 through 2012.

"The broad and increasing adoption of visual networking is having a significant impact on IP traffic growth for both consumer and business services markets worldwide," said Suraj Shetty, vice president of service provider marketing for Cisco. "Until just a few years ago, 'exabyte' was an unheard-of term. However, because of the massive growth we're seeing, by 2012 we will have to reorient our vocabulary once again, as the metric that we need then will be the zettabyte."

The Cisco Visual Networking Index Forecast and Methodology, 2007-2012 and the associated updated Cisco "Approaching the Zettabyte Era" White Paper are part of the Cisco Visual Networking Index, an ongoing Cisco initiative designed to provide quantitative and qualitative information regarding trends in IP network demand and usage.

_{⁽¹⁾ A zettabyte is equal to: 1 trillion gigabytes; 1,000 exabytes; 250 billion DVDs.}

_{⁽²⁾ An exabyte is equal to: 1 billion gigabytes; 1,000 petabytes; 250 million DVDs.}

About Cisco Systems

Cisco Announces Definitive Agreement to Acquire DiviTech

Jim O'Neill — Fri, 13 Jun 2008 07:54:07 -0400

SAN JOSE, Calif. - June 10, 2008 - Cisco today announced its intent to purchase Denmark-based DiviTech A/S, a leader in the digital-service management (DSM) market. DiviTech's DSM solution offers media broadcasters, cable and Internet Protocol Television (IPTV) service providers an intuitive interface for creating, modifying and managing video networks.

The acquisition of DiviTech will further enhance Cisco's video-delivery strategy. DiviTech's DSM technology includes a software application that will allow service provider customers to centrally provision and easily deliver localized content, such as local and regional news and on-demand video and services, within a specific geography. Cisco plans to integrate DiviTech's DSM product with the industry-leading Cisco® ROSA network- and element-management solution to create an end-to-end platform that offers all layers of digital video management (element, network and service) in a single modular product.

"DiviTech provides Cisco with a core team of some of the most talented engineers in the DSM market," said Dean Rockwell, vice president and general manager of the Digital Media business unit in Cisco's Service Provider Video Technology Group. "DiviTech's DSM platform will serve as the foundation for Cisco's continued leadership in next-generation management tools and applications for complex video networks."

DiviTech's DSM solution complements Cisco's internally developed video innovations as well as expertise attained from other recent acquisitions in the video market, including Scientific Atlanta, Arroyo and Tivella. DiviTech marks Cisco's 128th acquisition.

The acquisition of DiviTech is subject to various standard closing conditions and is expected to close in Cisco's fourth quarter of fiscal year 2008. Financial terms of the transaction are undisclosed. Upon the close of the acquisition, Cisco plans to integrate DiviTech into Cisco's Digital Media business unit as part of the Service Provider Video Technology Group. DiviTech employees will move into Cisco's Copenhagen facility.

About Cisco Systems

Cisco Sets New Era of Business Mobility in Motion

Jim O'Neill — Wed, 28 May 2008 22:41:06 -0400

SAN
JOSE, Calif., May 28, 2008 - Cisco® today announced an evolved
architecture that helps empower businesses to meet and exceed mobility
demands and move beyond basic wireless networking into the next
generation of business mobility - transforming the way business is done
by fostering broader collaboration and new levels of productivity. This
announcement is part of Cisco Motion - Cisco's innovative vision for
business mobility that delivers practical solutions to integrate mobile
devices, applications, security and disparate networks into a unified
platform.

The cornerstone of the Cisco Motion vision is the Cisco 3300 Series
Mobility Services Engine (MSE). This appliance-based platform offers an
open application programming interface (API) for consolidating and
supporting an array of mobility services across wireless and wired
networks. Cisco is releasing four initial software offerings for the
MSE: Cisco Context-Aware Software, Cisco Adaptive Wireless Intrusion
Prevention System (wIPS), Cisco Secure Client Manager and Cisco Mobile
Intelligent Roaming. The Cisco MSE and its software integrate with the
Cisco Unified Wireless Network portfolio, Cisco Unified Communications
Manager and Cisco-compatible devices to expand the reach and value of
an enterprise's mobility system.

Numerous application and solution partners have integrated or plan
to integrate with the MSE. This partner ecosystem includes Nokia and
Oracle, technology partners like AeroScout, Agito Networks and
Airetrak, as well as industry-specific application partners like
IntelliDOT and Johnson Controls (healthcare) and OATSystems
(manufacturing).

"Today's business mobility challenges cannot be solved using only
traditional wireless LAN solutions when multiple network elements are
converging and need to collaborate. Cisco's Motion approach is a true
services-oriented network architecture that creates a mobility network
as a platform for integrating key business strategies, processes and
goals," said Brett Galloway, senior vice president of Cisco's Wireless
and Security Technology Group. "To meet and exceed business mobility
expectations, IT must secure and manage a range of devices, integrate
multiple networks, enable applications, access information with a high
level of security, and help ensure a consistent experience regardless
of network connection or location."

Cisco Motion: Accelerating the Evolution of Business Mobility

Information Technology (IT) departments must increasingly manage
disparate networks (Wi-Fi, cellular, passive RFID, personal wireless,
sensors, Ethernet), to handle a rising number of devices and more
applications. The Cisco Motion approach includes the industry's first
mobility architecture that addresses these challenges in the following
ways:

Unifying networks: Extending applications to devices regardless of the connection
Managing the client device wave: Securing devices, centralizing client provisioning
Facilitating collaboration: Selecting the right media at the right time and right place
Opening up development: Open API supports integrated applications and services

"Cisco's mobility vision mirrors Oracle's approach to application
development, which focuses on efficiently connecting users to the
information they need to make better business decisions," said Jon
Chorley, vice president of product strategy at Oracle. "Integrating
Oracle's enterprise applications with Cisco's open mobility platform
creates tremendous value for our customers."

The Cisco MSE's initial service offerings include the following software components:

Cisco Context-Aware Software captures contextual information from a full range of sensors, mobile
devices and RFID tags over the Cisco Unified Wireless Network, allowing
businesses to move beyond basic location tracking and gather detailed
information about assets like location, temperature, availability, and
the application used. Information is channeled into applications,
increasing asset-management intelligence. Context-Aware Software
supports enhanced received signal strength indication (RSSI) and time
difference of arrival (TDOA), improving location accuracy and
performance indoors, outdoors and in challenging RF environments.

Flextronics, a valued Cisco partner and global leading Electronics
Manufacturing Services (EMS) provider for Cisco and OEMs, is looking to
the Cisco Context-Aware Mobility solution to track Cisco's capital
assets as a service at its global manufacturing sites. In Austin,
Texas, the company tracks high-value assets like thermal chambers and
testing equipment used to manufacture products, enabling it to account
for Cisco capital equipment and easily locate it in real-time.

"We need to locate customers' assets immediately throughout our
large facility in real time and conduct regular inventory checks,
regardless of location in the manufacturing process. Flextronics'
adoption of Cisco's location solution is the foundation for supporting
capital-equipment logistics management that also enhances our
capabilities to reduce inefficiencies and provide true cost-avoidance
opportunities," said Mel Day, director of engineering services of
Flextronics. "Looking forward, we see more assets coming into our
facilities and devices that need to connect to the network, and Cisco's
new Mobility Services Engine can help alleviate the challenge of
managing multiple siloed networks and devices that need to
interoperate."

Cisco Mobile Intelligent Roaming facilitates seamless handoff of dual-mode mobile devices between Wi-Fi
and cellular networks based on availability, real-time network
information and user location. It integrates with numerous offerings
from service providers, third-party vendors and mobile device
manufacturers. By utilizing network intelligence and client software
integration from its open ecosystem of partners, Cisco Mobile
Intelligent Roaming software gives IT additional control of mobile
devices while helping to create a seamless mobile experience.

"As users access more applications and services on their mobile
devices, businesses need a unified approach to managing the mobile
networks and securing their data. A unified mobility system approach
like Cisco Motion helps enhance the mobile experiences and ease the
automatic handoff between wireless networks in offices and cellular
networks in public environments," said Tom Furlong, senior vice
president, Services & Software, Nokia. "Nokia is targeting to
deliver automatic handoff to Cisco's internal Nokia Intellisync Call
Connect users and other customers in its next software release."

Cisco Adaptive Wireless IPS is a
new intrusion-prevention system that delivers the feature depth of an
overlay solution with the full benefits of an integrated solution. It
integrates wireless threat detection, mitigation, vulnerability
scanning and performance monitoring into the wireless network. It
assists in protecting against rogue access points and clients, wireless
hacking and day-zero threats. RF spectrum analysis provides
self-healing protection. Proactive prevention includes automated
vulnerability analysis, management frame protection and infrastructure
authentication. Purpose-built collaboration between wired and wireless
intrusion prevention helps provide full protection (Layers 1 to 7) by
detecting inappropriate network activity or malware spawned by wireless
clients. The Cisco MSE centrally processes, analyzes and correlates
events from the Adaptive Wireless IPS monitors, providing broad
mobility threat protection.

The final announced MSE software product, Cisco Secure Client Manager,
centralizes the security and management of provisioning various mobile
devices via the Cisco Secure Services Client 802.1X solution over
wired, Wi-Fi, cellular and other wireless networks. It addresses one
challenge faced by IT: managing the connectivity and security of Wi-Fi
and other mobile devices. The MSE's open API enables integration with
third-party device management software and solutions.

Availability

The Cisco 3350 Mobility Services Engine is scheduled to begin
shipping in June 2008 with prices beginning at $19,995 USD. The Cisco
Context-Aware Software is scheduled to begin shipping in June 2008. The
Cisco Unified Wireless Network Software Release 5.1 ships in May 2008,
and includes critical new mobility features, as well as support for the
Motion architectural approach. Both the Cisco Adaptive Wireless IPS
Software and Cisco Mobile Intelligent Roaming Software are scheduled to
ship in the second half of 2008, and the Cisco Secure Client Manager
Software is scheduled to ship in the first half of 2009.

Find More Information Online: Cisco Mobility | Cisco Wireless

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About Cisco

Cisco, (NASDAQ: CSCO), is the worldwide leader in networking that
transforms how people connect, communicate and collaborate. Information
about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.