Cisco 2008 Annual Report Download - page 10

2008 Annual Report 1514 Cisco Systems, Inc.
Letter to Shareholders >Letter to Shareholders >
was approximately 12%, driven by balanced results across our geographic theaters, customer
segments, and product portfolios. We continued to develop the strategic nature of our customer
relationships, as evidenced by service revenue growth of 18% to surpass $6.4 billion for fiscal 2008.
We added over 4,500 employees throughout fiscal 2008, bringing the Cisco “family” to just over
66,000. We continue to emphasize innovation and collaboration as part of our internal culture
as we build a next-generation company. Our strategic investments contributed to net income
growth of 10% on a year-over-year basis to reach $8.1 billion in fiscal 2008. Earnings per share on
a fully diluted basis for fiscal 2008 were $1.31. Cash generated from operations was $12.1 billion.
We remain committed to our stock repurchase program, and we believe that this is an efficient
way to return cash to shareholders. We repurchased 372 million shares of our common stock
during fiscal 2008. Since the inception of the repurchase program in fiscal 2002 through the end
of fiscal 2008, Cisco has repurchased approximately 2.6 billion shares.
One of Cisco’s competitive advantages is our ability to quickly and effectively integrate acquisitions
that enhance our product offering, which allows us to move quickly into market adjacencies. In fiscal
2008, we completed several acquisitions, including Cognio, Inc., a leader in wireless spectrum
analysis and management for wireless networks; Latigent, LLC, a leading provider of web-based
business intelligence and analytics reporting solutions focused on contact centers; Nuova
Systems, Inc., a developer of next-generation products for the data center market; Securent, Inc.,
a leading provider of policy management software for enterprises; Navini Networks, Inc., a leader
in the mobile WiMAX broadband wireless industry; and DiviTech, A/S, a leader in the digital-service
management market.
The network, coupled with widespread broadband Internet access, has created a platform that
eliminates time and distance as obstacles to working together toward common goals, such as
an acquisition. This ability to collaborate across geographies and time zones has the power to
transform business models forever.
Corporate Citizenship and Social Responsibility
One thing that is clear to us as members of the “human network” is the importance of environmental
sustainability. Cisco’s EcoBoard is made up of key senior leaders. This group is chartered with devel-
oping Cisco’s green vision and strategy and with overseeing our environmental policies and practices.
We believe that we can affect the environment in a positive way through the use of technology. Our
view is that everything connected to the network can be green. Cisco endeavors to build products
that have optimized functionality, accessibility, and performance for the network, while reducing
the amount of power consumed and, ultimately, our carbon footprint. We use internally developed
metrics to measure our progress as we work closely with our suppliers to define and implement
“green” goals and initiatives.
Another area of passion for Cisco is the power of the network to improve education. The coming
together of the Internet and education has opened significant opportunities for current and future
generations of students, companies, and countries. Technology provides greater access to educa-
tional opportunities through the Internet, enabling students to learn more with less. Workers have
greater access to e-learning opportunities to enhance and increase their skills. And companies and
schools can decrease costs by using technology for greater productivity.
“Collaboration is the way
we combine processes, net-
worked IT, and our culture to
deliver results that are founded
on the principles of shared
goals, a common vision, and
an environment of trust.”
The Cisco Networking Academy program has provided more than two and a half million students
around the world with critical IT and networking skills, educating the architects of the networked
economy of today and of tomorrow. And because education is a global initiative for our company,
the Cisco Networking Academy forges alliances with socially responsible businesses, development
agencies, and nonprofit organizations to deliver the services needed to help build the global IT work-
force and promote socioeconomic development around the world.
Building a Next-Generation Company
Using Cisco virtualization technology, businesses and service providers can scale their
operations and extend the capabilities of their data centers to deliver innovative new experiences
more quickly, more efficiently, and with fewer resources. Our collaboration and video products turn
what was once a solitary user experience on a lone device into an experience that is shared, used,
expanded, enhanced, rich, fulfilling—the list goes on and on—and it is being increasingly delivered
on multiple devices.
Cisco will continue to innovate to capture market transitions and to better address the needs of
our customers. In order to realize the opportunity ahead, we will transform our own business and
change the way our company is structured. At Cisco, this is an organizational and cultural revolution,
moving from a hierarchical command-and-control model to a collaborative leadership approach,
governed by councils, boards, and working groups. We are pioneering this new and strategic
approach, enabled by collaboration technologies, to accomplish our goals and fulfill our dreams.
We believe that we are at one of the greatest market transitions in recent history. Time will tell if we
are right. As a company, our opportunity is to build a connected, global, human network enabling us
to work collectively to address the social, economic, and political issues of our time. As leaders, it is
our responsibility to lead by inclusion and collaboration, to encourage and reward these behaviors,
and to welcome the innovations that will enable a world that is more connected than ever before.
We are limited not by technology, but only by our own imaginations and willingness to embrace this
exciting new era.
In closing, let me say that I am personally more excited and humbled than I have ever been during
my tenure at Cisco. I am surrounded by a passionate team of over 66,000 employees who are
helping our customers and partners recognize the potential of collaborative business models
and network-enabled Web 2.0 technologies to enhance their businesses and their lives, all made
possible by leading technologies running on intelligent networks. I believe that Cisco is a company
that can be “best in the world and best for the world.” I look forward to sharing this journey with you.
John T. Chambers
Chairman & CEO
– John Chambers, Chairman & CEO
CLOSING
THOUGHTS