Tech

Cisco takes a lesson from the coronavirus pandemic with new solutions for remote work and learning

Key Points
  • Cisco has helped some of its customers set up remote work and education technologies. Now it wants to bring those capabilities to more organizations.
  • While Cisco remains number one in the conferencing software as a service market, Zoom is becoming a bigger force.
The CEO of Cisco, Chuck Robbins, is seen during his presentation on ‘The Next Generation’ in the Mobile World Congress Barcelona 2019 on February 27, 2019 in Barcelona, Spain. (Photo by David Zorrakino/Europa Press via Getty Images)
David Zorrakino | Europa Press | Getty Images

Cisco on Tuesday announced a set of solutions that organizations can use to operate more effectively when people are spread across many locations.

The new offerings will incorporate a combination of software, hardware, and consulting services, and are based on specific solutions that Cisco built for customers during the coronavirus crisis. For instance, one solution combines video collaboration hardware and software to offer virtual visitations for inmates in correctional facilities. Another solution uses Wi-Fi and analytics software to monitor social distancing in workplaces. 

Like the Work.com software from Salesforce that can help companies bring employees back to offices, Cisco's initiative represents a mature enterprise technology looking to capitalize on the current moment. 

But even though the country is slowly emerging from shelter-in-place orders after several months of lockdowns, Cisco doesn't think it's late to the game. "I think it's very early," Cisco CEO Chuck Robbins said in an interview with CNBC on Monday.

Some organizations implemented whatever technology they could get their hands on, Robbins said. Now, Cisco believes there's an opening for more carefully constructed solutions. 

"They want to offer this well thought-out experience, versus what they've done in the last few months," he said.

The coronavirus pandemic has boosted demand for technology enabling remote work, learning and health services. But Cisco has not seen the lift that many other tech companies experienced.

Take the example of Zoom, the video-calling service that competes with Cisco's Webex. Zoom's revenue grew 169% year over year in the quarter that ended on April 30, as the number of customers with over 10 employees jumped 354%. But Cisco's Applications business, which includes Webex and other assets, declined 5% on an annualized basis in the most recent quarter and fell short of consensus.

Cisco held on to its number-one position in the conferencing software as a service market in the first quarter, but in that period Zoom became a bigger force, according to a report on Monday from Synergy Research Group. Specifically, Zoom had 28% of the market in Q1, up from 13% in the year-ago quarter, while Cisco had 37%, down from 43% a year ago

Cisco primarily gets its revenue from hardware like switches that get stored inside data centers. The company isn't forgetting about that business. It's offering experts who can help IT departments upgrade their on-premises infrastructure and provide network connections to workers who aren't on site.   

Even after the pandemic ends, Cisco may continue to embrace remote work for its own employees, given that this chapter has shown that people can be productive.

"As a business community, we probably haven't thought that it was as viable" as it has proven to be, Robbins said.

He also said that companies are moving far faster than they expected to enable remote work at scale.

"I talked to the CEO of a large manufacturer today for an hour," Robbins said. "He said they had about 5,000 people that worked from home. They were thinking about taking that to 10,000 to 12,000. Within a week or so, they were running a pilot of 120,000 instead."

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