Cisco software, subscription strategies pay off


Cisco’s strategy of diversifying into a more software-optimized business is paying off – literally.

The software differentiation was perhaps never more obvious than in its most recent set of year-end and fourth quarter results. (Cisco’s 2018 fiscal year ended July 28.)  Cisco said deferred revenue for the fiscal year was $19.7 billion, up 6 percent overall, “with deferred product revenue up 15 percent, driven largely by subscription-based and software offers, and deferred service revenue was up 1 percent.”

The portion of deferred product revenue that is related to recurring software and subscription offers increased 23 percent over 2017, Cisco stated. In addition, Cisco reported deferred revenue from software and subscriptions increasing 23 percent to $6.1 billion in the fourth quarter alone.

“We’re seeing the returns on the investments we’re making in innovation and driving the shift to more software and subscription,” Kelly Kramer, Cisco CFO said during the company’s financial results conference call. 

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