Cisco 2011 Annual Report Download - page 18

Download and view the complete annual report

Please find page 18 of the 2011 Cisco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 152

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152

discussed in “Item 1A. Risk Factors,” including the risk factor entitled “If we do not successfully manage our
strategic alliances, we may not realize the expected benefits from such alliances and we may experience
increased competition or delays in product development.”
Competition
We compete in the networking and communications equipment markets, providing products and services for
transporting data, voice, and video traffic across intranets, extranets, and the Internet. These markets are
characterized by rapid change, converging technologies, and a migration to networking and communications
solutions that offer relative advantages. These market factors represent both an opportunity and a competitive
threat to us. We compete with numerous vendors in each product category. The overall number of our
competitors providing niche product solutions may increase. Also, the identity and composition of competitors
may change as we increase our activity in our New Products markets. As we continue to expand globally, we
may see new competition in different geographic regions. In particular, we have experienced price-focused
competition from competitors in Asia, especially from China, and we anticipate this will continue.
Our competitors include Alcatel-Lucent; Arista Networks, Inc.; ARRIS Group, Inc.; Aruba Networks, Inc.;
Avaya Inc.; Brocade Communications Systems, Inc.; Check Point Software Technologies Ltd.; Citrix Systems,
Inc.; Dell Inc.; D-Link Corporation; LM Ericsson Telephone Company; Extreme Networks, Inc.; F5 Networks,
Inc.; Fortinet, Inc.; Hewlett-Packard Company; Huawei Technologies Co., Ltd.; International Business Machines
Corporation; Juniper Networks, Inc.; LogMeIn, Inc.; Meru Networks, Inc.; Microsoft Corporation; Motorola
Mobility Holdings, Inc.; Motorola Solutions, Inc.; NETGEAR, Inc.; Polycom, Inc.; Riverbed Technology, Inc.;
and Symantec Corporation; among others.
Some of these companies compete across many of our product lines, while others are primarily focused in a
specific product area. Barriers to entry are relatively low, and new ventures to create products that do or could
compete with our products are regularly formed. In addition, some of our competitors may have greater
resources, including technical and engineering resources, than we do. As we expand into new markets, we will
face competition not only from our existing competitors but also from other competitors, including existing
companies with strong technological, marketing, and sales positions in those markets. We also sometimes face
competition from resellers and distributors of our products. Companies with whom we have strategic alliances in
some areas may be competitors in other areas. For example, the enterprise data center is undergoing a
fundamental transformation arising from the convergence of technologies, including computing, networking,
storage, and software, that previously were siloed. Due to several factors, including the availability of highly
scalable and general purpose microprocessors, application-specific integrated circuits offering advanced services,
standards based protocols, cloud computing and virtualization, the convergence of technologies within the
enterprise data center is spanning multiple, previously independent, technology segments. Also, some of our
current and potential competitors for enterprise data center business have made acquisitions, or announced new
strategic alliances, designed to position them to provide end-to-end technology solutions for the enterprise data
center. As a result of all of these developments, we face greater competition in the development and sale of
enterprise data center technologies, including competition from entities that are among our long-term strategic
alliance partners. Companies that are strategic alliance partners in some areas of our business may acquire or
form alliances with our competitors, thereby reducing their business with us.
The principal competitive factors in the markets in which we presently compete and may compete in the future
include:
• The ability to provide a broad range of networking and communications products and services
• Product performance
• Price
• The ability to introduce new products, including products with price-performance advantages
10