Cisco Focusing on Growing Recurring Revenue in Hybrid Work and Cloud World

The networking equipment behemoth Cisco continues to execute on its strategic focus of increasing recurring revenue via selling software and services to supplement its hardware products. Software and services were more than half of fiscal 2020 revenue, up from 43% in fiscal 2017. In our view, Cisco embracing software from hardware disaggregation, and even selling networking chips, can help keep demand for its solutions high although some customers rely on cloud-based resources or generic hardware. We assess Cisco's plan as the correct direction for sustainable growth and believe the firm's strategic shifts through organic developments and acquisitions, keep Cisco as mainstay in today's networks.