Enabling Digitization with Next Generation Cloud. Nick Earle Senior Vice President, Global Cloud and Managed Services November 18, 2015

Transcription

1 Enabling Digitization with Next Generation Cloud Nick Earle Senior Vice President, Global Cloud and Managed Services November 18, 2015

2 Forward-looking Statements This presentation contains projections and other forward-looking statements regarding future events or the future financial performance of Cisco, including future operating results. These projections and statements are only predictions. Actual events or results may differ materially from those in the projections or other forward-looking statements. Please see Cisco s filings with the SEC, including its most recent filings on Form 10-K and 10-Q, for a discussion of important risk factors that could cause actual events or results to differ materially from those in the projections or other forward-looking statements. GAAP Reconciliation During this presentation references to financial measures of Cisco will include references to non-gaap financial measures. Cisco provides a reconciliation between GAAP and non-gaap financial information on our website at under Financial Info in the Investor Relations section. Results/default.aspx 2015 Cisco and/or its affiliates. All rights reserved.

3 Agenda Recap of Cloud Impact to Q1 earnings What Is Cisco s Cloud Strategy? Public Cloud Private Cloud Hybrid Cloud Data and Analytics

4 Cisco Is Changing 47% of deferred revenue is software Software and subscription deferred revenue up 36% Security deferred revenue grew 31% Collaboration deferred revenue grew 18% Chuck Robbins, Cisco Q1FY16 Earnings Call; November 12, 2015

5 Significant Momentum in SaaS WebEx one of the largest enterprise SaaS applications in the world grew revenue over 23%... Meraki our cloud based networking business grew revenue over 60%... and we continue to move more of our portfolio to cloud-based delivery models. Chuck Robbins, Cisco Q1FY16 Earnings Call; November 12, 2015

6 Cisco Cloud and SaaS Acquisitions & Investments ACQUISITIONS Infrastructure SDN/NFV System Software Cloud Services SaaS Applications INVESTMENTS Orchestration/Automation Operations & Applications Security & Storage

7 What Is Cisco s Cloud Strategy?

8 277X Data created by IoE devices v. end-user 30M New devices connected every week 180B Mobile apps downloaded in % Workloads processed in Cloud DCs by TB+ of data per person by B Things connected by 2020 Hyper Explosion of Applications & Data

9 A New Approach Is Needed to Solve Hyper-Distribution of Applications and Data SaaS PaaS IaaS Data Center Cloud Edge/IoT Security Everywhere

10 Shadow Cloud Worse Than IT Thinks! 51 Customer estimates: average cloud services used by their organization X more cloud services purchased without IT involvement Average cloud services actually discovered Hidden costs 4-8X higher than billed costs Cisco Confidential 10

11 Digitization Requires Five Key Enablers Bi Modal IT Highly Secure Network Policy Extension Application Policy Control Across All Clouds Hybrid IT Digitization Enablement Network Centric Partner Ecosystem

12 Cisco s Multi-cloud Strategy: Intercloud Enterprise Private Clouds CHOICE Cloud the way you need it PARTNERS with TECHNOLOGY SERVICES Intercloud Providers INTERCLOUD Public Clouds Intercloud Services Intercloud Alliance COMPLIANCE Manage risk locally and globally and CONTROL Across services, in every location

13 Public Cloud

14 On the public cloud side, Cisco is a leading provider of infrastructure to the web scale and SP customers as they build out their public cloud infrastructure. Public Cloud Provider orders were up over 20% in Q1. Chuck Robbins, Cisco Q1FY16 Earnings Call; November 12, 2015

15 Private Cloud

16 Private Cloud Is a Strong Growth Driver for Cisco Within the enterprise, we are winning in private cloud and are focused on automating and driving public cloud economics across our customers entire infrastructure. We saw this opportunity drive 24% growth in UCS, and our next generation data center switching portfolio this performance is much stronger than that of our competitors who claim they are outpacing and outperforming us. Next gen switching = 3K, 9K, ACI $2Bn run rate, $500m Q1 Grew 140% in Q1 Chuck Robbins, Cisco Q1FY16 Earnings Call; November 12, 2015

17 DC / Private Cloud Portfolio Leadership FlexPod vblock Industry s #1 SDN & DC Switching Infrastructure North America s #1 Blade Server UCS #1 Integrated Infrastructures Industry s #1 Next Gen Firewall Cisco ONE Enterprise Cloud Suite Dell O ro Q4 CY 2014

18 Infrastructure Applications Cisco Enterprise Software Portfolio Collaboration (Suites) Analytics & Automation Security Conferencing Customer Collaboration Collaboration Endpoints Unified Communications Data & Analytics Data Virtualization Analytics Solutions for Network Deployments, Contact Center, Collaboration, Retail, Events, Mobility IT Streaming Analytics Energy & Asset Analytics Workload Automation Process Platforms Process Automation Application & Infrastructure Integration Experience Platforms Mobile Fixed Displays Converged Radio Access Policy Mgmt. (Firewall) Intrusion Prevention Malware Protection Web Security Network, Compute, & Storage (Cisco ONE Software) Security Threat Defense for Data Center Threat Defense for WAN Identity Services for Access Mobility Security Data Center Fabric Enterprise Cloud Suite WAN Collaboration Campus Fabric Advanced Mobility Services Identity Services Foundation for Networking Foundation for Compute Foundation for WAN Foundation for Switching Foundation for Wireless Threat Management

19 Cisco ONE Momentum customers Double-digit bookings increase with customer orders 45% of Fortune 100 use Cisco ONE Customers achieve twice the software value on average when moving to Cisco ONE model Customer distribution across domains * Typical range across customer deals. Economics will vary by deal.

20 TAM for Private Cloud Infrastructure and Software (Cisco ONE Enterprise Cloud Suite) Private Cloud Infrastructure Private Cloud Infrastructure Market is growing 16.8% and will reach $11.7Bn in 2015 Hosted Private Cloud Services Market will grow 34.5% CAGR through 2019 reaching $40.6Bn Source: IDC Million $10,000 $8,000 $6,000 $4,000 $2,000 $0 Software $1,830 $2,198 $294 $582 $973 $1, Total Cloud Systems Management CAGR: 29% Private/hybrid cloud Enablement (TAM) CAGR: 24% Served Addressable Market (SAM) CAGR: 49% Source: IDC & Cisco GMV Estimates Methodology: Cisco SAM grows from 20% to 50% of TAM by expanding functional coverage

21 It s About More than Public Cloud Agility to the Edge Traditional Applications SaaS Cloud Native Applications ERP, Financial, Client/Server, CRM, PaaS IaaS IoT, Big Data, Analytics, Gaming Data Center Cloud Edge/IoT Security Everywhere Cisco Confidential

22 New Converged Stack for Cloud Native Workloads NEW Metapod 45% Enterprises with 2 nd Agile IT Mode FlexPod vblock VersaStack CCA MCP Traditional Applications (IT Operated) Cloud Native Applications (Cisco Operated)

23 Cisco Metapod Business Outcomes *Moved from AWS as it was significantly more expensive than an onpremises private cloud Data and analytics powering billions of daily requests Grew capacity by 5-10x for the same cost Moved from VMware Enabled DevOps and rapid app development Increased efficiency of hardware utilization by over 60% Moved from VMware and AWS Hadoop/analytics and streaming media Much more cost effective than AWS and saved 6 months versus DIY OpenStack * Source: Gartner: When IT Leaders Should Select Private Over Public Cloud Services, September 17, 2015

24 Service Provider product bookings growth is up 6% Y/Y Chuck Robbins, Cisco Q1FY16 Earnings Call; November 12, 2015

25 vms Is the Killer App for SPs SP BENEFITS: 1. Unified Customer and Product Experience (Cloud, Network, VAS, Managed Networks and Security) 2. Improve Speed to Market (rapid product development) 3. Increase Service Velocity 4. Drive Operational Efficiency and Simplification 5. Platform for Innovation Managed Services Provide NFV based VAS in any location and any flavour for newly connected branch, central service or in any cloud of choice Service Offering Example: Dynamically provisioned IPVPN and Managed Services Service Offering Example: Offer cloud security FW/GW with SIEM on demand on the edge of any cloud the customer chooses NFV, vcpe, Edge, Core & Cloud & Managed Service SDN Data Centre Interconnect Elastic & Dynamic Networks Elastic on demand connectivity & bandwidth Network as a Service Provided as an API as well as a consumption platform SDN Cloud Connected Networks With Security Cloud Enable customers to consume cloud from the SP including elastic network and security in one unified experience Service Offering Example: Offer on-demand connection to Azure with bandwidth for 2hr and security

26 Hybrid Cloud

27 Cisco s Hybrid Cloud Architecture Vision Same Interface VMware vblock Unified Experience IQ CMX Big Data IBM VersaStack Common platform Consistent Licensing Billing and Ordering IaaS Containers Bare Metal Cisco Metapod NetApp FlexPod Seamless Connectivity ACI Cisco Cloud Architecture for Microsoft Cloud Platform Enterprise Cloud Stacks Intercloud Nodes

28 Data and Analytics

29 Digitizing Retail Retail Omni-channel Personalization Collect Employee Productivity Digital Fabric Analyze Minimize Out-of-stock Visualize Shopper Analytics Warehouse Inventory Cameras Supplier Equipment POS Sensors Customer Devices Edge Shopper Paths Edge Edge lost customers increase in of customers 17% shoppers more store traffic showrooming 21% 20% due to revenue/sq. stock-outs ft. 33% 15% need assistance 41% higher productivity

30 Through 2017, 90% of the information assets from big data analytic efforts will be siloed and unleverageable across multiple business processes.

31 A New Approach Is Needed to Reach and Analyze Data Structured Data Unstructured Data Data Streaming at the Edge Traditional Data Warehouse Big Data Store Analytics 1.0 Analytics 2.0 Analytics 3.0 Days/Hours Hours/Minutes/Seconds Seconds/Milliseconds Cisco Confidential

32 $Bn Edge Data and Analytics Opportunity $Bn Analy cs By Loca on Analy cs By Deployment Method $180 $180 50% Edge deployment of analytics will outpace data center growth by ~15% to represent ~17% of total analytics $155 by $160 $160 45% Cloud is forecasted to grow 22% faster than traditional deployments over the same period. $135 40% $140 $140 Analytics by Location Analytics by Deployment Method $118 35% $120 $120 $102 30% $100 $100 26% $89 $80 23% 25% $80 20% $80 18% 20% $60 15% $60 12% 15% $40 $40 $40 $31 $24 10% $20 $18 $20 $10 $13 5% $ $0 0% Data Center Edge Total Analy cs Market Cloud Deployment Cloud as % of Total Cisco Analy cs TAdM/TAM Analysis (# ) For the internal use of Cisco 2015 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates. 12

33 Industry s Best Data Center, Cloud, and Analytics Portfolio Efficiency + + Speed Digital Disruption Policy-Driven Infrastructure Private and Hybrid Cloud Software Cloud Offers Big Data Analytics Cisco ONE Cisco ONE Enterprise Cloud Suite Cisco Metapod SaaS Cisco Connected Analytics Big Data and Analytics Ecosystem Cisco Nexus / ACI Network Compute Storage Cisco UCS PaaS IaaS Analytics Cisco Cloud Architecture for the Microsoft Cloud Platform vms, NFVi Collaboration SP Video Data Center Cloud Edge/IoT Security Everywhere

34 Forward-Looking Statements These presentation slides and related webcast may be deemed to contain forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of These forward-looking statements include, among other things, statements regarding future events (such as statements regarding our growth and strategy) and the future financial performance of Cisco that involve risks and uncertainties. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including: business and economic conditions and growth trends in the networking industry, our customer markets and various geographic regions; global economic conditions and uncertainties in the geopolitical environment; overall information technology spending; the growth and evolution of the Internet and levels of capital spending on Internet-based systems; variations in customer demand for products and services, including sales to the service provider market and other customer markets; the return on our investments in certain priorities, including our foundational priorities, and in certain geographical locations; the timing of orders and manufacturing and customer lead times; changes in customer order patterns or customer mix; insufficient, excess or obsolete inventory; variability of component costs; variations in sales channels, product costs or mix of products sold; our ability to successfully acquire businesses and technologies and to successfully integrate and operate these acquired businesses and technologies; our ability to achieve expected benefits of our partnerships; increased competition in our product and service markets, including the data center; dependence on the introduction and market acceptance of new product offerings and standards; rapid technological and market change; manufacturing and sourcing risks; product defects and returns; litigation involving patents, intellectual property, antitrust, shareholder and other matters, and governmental investigations; natural catastrophic events; a pandemic or epidemic; our ability to achieve the benefits anticipated from our investments in sales, engineering, service, marketing and manufacturing activities; our ability to recruit and retain key personnel; our ability to manage financial risk, and to manage expenses during economic downturns; risks related to the global nature of our operations, including our operations in emerging markets; currency fluctuations and other international factors; changes in provision for income taxes, including changes in tax laws and regulations or adverse outcomes resulting from examinations of our income tax returns; potential volatility in operating results; and other factors listed in Cisco s most recent reports on Form 10-K and Form 10-Q. The financial information contained in these presentation slides and related webcast should be read in conjunction with the consolidated financial statements and notes thereto included in Cisco s most recent reports on Form 10-K and Form 10-Q, as each may be amended from time to time. Cisco s results of operations for prior periods are not necessarily indicative of Cisco s operating results for any future periods. Any projections in these presentation slides and related webcast are based on limited information currently available to Cisco, which is subject to change. Although any such projections and the factors influencing them will likely change, Cisco will not necessarily update the information, since Cisco will only provide guidance at certain points during the year. Such information speaks only as of the date of these presentation slides and related webcast.

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