Cisco 2007 Annual Report Download - page 10

All aspects of Cisco’s differentiated strategy have evolved based on customer requirements to
create sustainable differentiation in the industry and better serve the needs of all our customers.
In scal 2007, we saw continued momentum and achieved balanced growth across our product
families, our customer segments (enterprise, service provider, commercial, and consumer), and
our key geographic theaters.
From a customer segment perspective, the commercial market remained very solid and well
balanced globally. We are continuing to expand our product offerings, services, and distribution
capabilities to this strategic market. These customers, which are typically small and medium-sized
businesses, are increasingly embracing networking technology as they scale and realize efciencies
from their investments. With the addition of WebEx, we will begin to explore new ways to work with
small and medium-sized businesses as a trusted partner, and in turn help them grow and enhance
their businesses.
Our strategic value to our global service provider customers is increasing from both a technology
and a business architecture perspective. The proliferation of video and accelerating deployment
of HDTV and IPTV are influencing service providers to seek out innovative architectures that
provide network capacity to deliver rich, personalized user experiences. Cisco’s architectural
approach is designed to enable higher network capacity, intelligence, and resiliency to deliver
video and integrate video/IPTV in a range of consumer and business services to offer compelling
customer experiences. Our technologies transform service providers into “experience providers”
to enable the “Connected Life”—providing value throughout a consumer’s daily life at home, at
work, or on the move.
From a geographic perspective, we were pleased with the strong, balanced performance achieved
in our four largest theaters. These include the United States and Canada, European Markets, Emerging
Markets, and Asia Pacic. Perhaps our greatest geographic success of scal 2007 was the Emerging
Markets theater, where our revenue grew approximately 39 percent on a year-over-year basis. We
believe that our business process and collaborative approach to our Emerging Markets theater
contributed to this growth.
We believe that our unique go-to-market approach, in which Cisco serves as a key adviser to
governments around the world, is helping to drive country transformation by outlining process
change, building networks, and then providing the application services and expertise that support
key services for citizens, such as education, healthcare, public safety, economic development, and
national security. Relationships with government leaders worldwide, supported by our extensive
sales coverage, are key to our execution in these markets.
Execution: Measures of Success
For Cisco, successful execution is measured by product, customer segment, and geographic
market leadership on a global basis. As we position ourselves for the second phase of the Internet’s
innovation and productivity, people are turning to the network as the platform that enables all forms
of communications and IT. We are quickly adopting and helping our customers to adopt Web 2.0
technologies, such as unied communications and TelePresence.
In scal 2007, Cisco delivered strong results with accelerated revenue growth. Total revenue for scal
2007 was a record $34.9 billion, an increase of approximately 23 percent over scal 2006 revenue of
$28.5 billion. Of the total revenue in scal 2007, $29.5 billion was related to product revenue and $5.5
billion was related to service revenue.
We achieved strong revenue growth across our key geographic, customer, and product portfolios,
which demonstrates the power of our diversication. We believe our performance is evidence of the
underlying strength in our balanced product portfolio. Our reward is market leadership in almost all
product categories.
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