Cisco 2012 Annual Report Download - page 20

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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 product 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. (acquired by Google, Inc. in May 2012); Motorola Solutions, Inc.; NETGEAR, Inc.; Palo
Alto Networks, 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 which we have strategic alliances in
some areas may be competitors in other areas, and in our view this trend may increase. 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
• The ability to reduce production costs
• The ability to provide value-added features such as security, reliability, and investment protection
• Conformance to standards
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