Cisco 2011 Annual Report Download - page 4
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2 Cisco Systems, Inc.
Annual Report 2011
Letter to Shareholders
We believe we are well positioned
to capitalize on these initiatives,
in part because of the significant
changes we made over the past year.
These changes were implemented
as a result of our own internal
assessments, led by our new Chief
Operating Officer, Cisco 10-year
veteran Gary Moore, and also as a
result of customer feedback.
First, we aligned our cost structure
and expect to reduce our fiscal 2012
operating expenses by $1 billion
on an annualized basis. As part
of this effort, we are reducing our
global headcount and other costs to
optimize our operating model.
Second, we took decisive action to
optimize our portfolio. We made the
decision to either exit or materially
lower our investments in several
areas of our product and solutions
portfolio. These efforts allowed for
the redeployment of more than
$200 million in investment in all
areas that support the company’s
five foundational priorities, discussed
above.
Third, we reorganized our sales,
engineering, services, and operations
organization, providing clear line-
of-sight accountability toward the
goals of accelerating the speed
of decisions, driving toward major
improvements in productivity, and
driving innovation at a faster pace.
Fourth, we took steps to deliver more
value to our shareholders by initiating
a quarterly cash dividend, and we
continued to be aggressive in our
stock repurchase program. In fiscal
2011, we returned over $7 billion
to our shareholders through these
actions.
While the foundation has been laid
for a simpler Cisco with much of the
heavy lifting behind us, we believe
now is the time to accelerate our
transition. The Next Cisco recognizes
that we need to stay disciplined and
responsive. In the past our goal has
been to help our customers increase
their competitive advantage and
profitability through their networks.
Today, as a lean, agile, and more
aggressive Cisco, we are upping the
ante in furtherance of this goal.
Our goal is to create intelligent
networks that become our
customers’ most strategic
communications, IT, and business
asset, helping solve their most
important technology and business
issues. This is what we are striving
for, and we believe that if we deliver
intelligent networks and technology
architectures built on integrated
differentiated products, services,
and software platforms, we will
achieve this goal and win the next
technological transition.
FINANCIAL HIGHLIGHTS
If you look at our momentum, we’re
clearly responding well to market
challenges—picking up new business
and winning versus our competition.
In our view, our architectural
approach, scale advantages, and