On Investing in CSCO

Maybe it's a medium-term investment, but they're a massive ship that's tried to turn the wrong direction too many times.

heads up: this is a pretty old post, it may be outdated.

It might be a medium term play, but long-term, they've not proven they can adapt to new tech. Facebook is challenging their whole model with openstack, Snowden showed that Cisco is vulnerable to US government interference which scared international customers, and they're effectively locked out the China because of Huawei.

The new management might matter, but I doubt it. I worked for them for a few months, and I was completely unimpressed. They're a top-heavy sales organization without much in the way of new engineering.

Pay attention to their marketing and you can see how often their execs keep shooting and missing. To go through the recent timeline:

  • They were moving into the consumer space with Flipcam and Linksys.
  • Then video was the big play with TelePresence. They've essentially lost to lighter-weight communications platforms like Slack.
  • Now security is the focus. Their stack is close-source, ancient, requires years of training just to use, and has execs that don't understand what's involved. Security though obscurity isn't a strategy. As always, their primary strategy appears to be to acquiring other hardware companies and letting them die on the vine.

As an example how the execs are out-of-touch:

…when Clarke pressed about the risks of BGP, asked him to write the name on a piece of paper.

“I don’t think I have ever heard of that,” Clarke recounted the executive saying in his book, “but if you say there is a vulnerability with it that affects our routers, I will check up on it.”

…Clarke said that meeting had been with John Chambers, the longtime chief executive of Cisco


In the medium-term, they're not going anywhere. There's a common phrase in IT, "you never get fired for buying Cisco". I'm not sure that's going to be true much longer.