Running head: CISCO SYSTEMS INC.
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Cisco Systems Inc.
Saul Prado
Yingwen Lu (Raymond)
Gus Castellanos
Feifan Liu
California State University, Los Angeles
Dr. Juanita Trusty
MGMT3080
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CISCO SYSTEMS INC.
Cisco Systems Inc.
Background
Cisco Systems was founded in December 1984 in San Francisco, California, by a
husband and wife team from Stanford University, Leonard Bosack and Sandra Lerner. Two
Stanford University computer scientists pioneered the concept of a local area network (LAN)
being used to connect geographically disparate computers over a multiprotocol router system.
And the company name "Cisco" was derived from the city name San Francisco, which is why the
company's engineers insisted on using the lowercase "cisco" in its early years. Cisco Systems,
Inc. is a leading supplier of communications and computer networking products, systems, and
services. Cisco's primary product from the beginning was the internetworking router, a hardware
device incorporating software that automatically selects the most effective route for data to flow
between networks. The company grew at a tremendous rate as its market rapidly expanded. In
the early 1990s, companies of all sizes were installing local area networks (LANs) of personal
computers. As such, the potential market for linking these networks, either with each other or
with existing minicomputers and mainframe computers, also grew. And according to Gomes, Lee
writer from Wall Street Journal mentions Cisco's sales jumped from $183.2 million in 1991 to
$339.6 million in 1992, and net income grew from $43.2 million to $84.4 million during the
same period.
Cisco's key wireless acquisition also came in late 1999 with the announcement of the
$800 million purchase of Aironet Wireless Communications, Inc., maker of equipment that
creates LANs without wires in small and medium-sized businesses. The technology was also
expected to be transferred to the home environment, where Cisco aimed to capture what was
predicted to be an area of rapid early 21st century growth: the networked home (Fortune, 1999,
p119). And by 2005 the “bundle war” happen, that is all the
cable and telephone companies were
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CISCO SYSTEMS INC.
interested in providing a bundle of services to their customers, a package of converged networks
that included broadband Internet access, Internet-based telephone service, wireless calling, and
video services such as video-on-demand. And that time Cisco was well equipped to provide the
first three types of services, but it lacked the ability to provide anything substantial in the video
realm. The purchase of Scientific-Atlanta gave Chambers quadruple play capabilities, opening a
new, vast market for the company. "Once you add video," Chambers explained in a November
21, 2005 interview with
Business Week Online
, "not just in products, but in being able to
integrate them all together, that gives us leadership that is very, very unique."
Products and Services
As a major player in the technology industry, Cisco has created an efficient
business model to ensure that it navigates the market. Mainly, the business manufactures
hardware and software to suit the needs of its clients (Jenkins, n. p). The entity serves small
