Rampant capitalism
Well ...
Just another example of rampant capitalism at it's best.
Cisco is reporting record financial numbers on the same day it says it will cut 5,500 employees from its payroll. Switchzilla says that the move is part of its ongoing campaign to shift its focus from slinging networking hardware to providing software and services for enterprises moving to software-defined networks (SDN). CEO …
Check out the margins. Would seem customers are not negotiating hard enough!
"Gross Margin -- On a GAAP basis, total gross margin and product gross margin were 63.1% and 62.2%, respectively. The increase in the product gross margin compared with 59.0% in the fourth quarter of fiscal 2015 was primarily due to continued productivity improvements, the divestiture of the SP Video CPE Business, and to a lesser extent product mix, partially offset by pricing.
Non-GAAP total gross margin and product gross margin were 64.6% and 63.9%, respectively. The increase in non-GAAP product gross margin compared with 63.2% in the fourth quarter of fiscal 2015 was primarily due to continued productivity improvement and to a lesser extent product mix, partially offset by pricing.
GAAP service margin was 66.0% and non-GAAP service gross margin was 67.0%.
Total gross margins by geographic segment were: 64.9% for the Americas, 65.2% for EMEA and 62.5% for APJC."
"Check out the margins. Would seem customers are not negotiating hard enough!"
Indeed, and then they're bound to destroy the good business they have by kicking out lots of employees only to move to an area of SDN with LOTS of competition and open source products hoping to profit even more.
It's surprising how the people at the top always think they need to turn the entire company upside down only to overplay their hand and destroying the company in the process.
The thing that makes Cisco unique is proper hardware with solid software on top, in contrast to other companies that seem to sell different crap every week. Once they lose focus on the hardware they're losing their differentiating factor.