Cisco Systems CEO John T. Chambers: A Dow Dazzler

1 00:00:06,419 --> 00:00:10,180 20 hideous tape for the false it's worth certain why king's ransom the market's 2 00:00:10,180 --> 00:00:11,690 most powerful leaders 3 00:00:11,690 --> 00:00:15,100 that a pullback courtesy the recent sell-off talk about companies like Cisco 4 00:00:15,100 --> 00:00:16,100 the networking 5 00:00:16,100 --> 00:00:19,599 kingpin which is the 5th best-performing stock in the Dow Jones Industrial 6 00:00:19,599 --> 00:00:20,240 Average Fisher 7 00:00:20,240 --> 00:00:24,869 I think you can you be a bad this reform in 2015 sisters watching some major pop 8 00:00:24,869 --> 00:00:27,198 cycles here and let me the company's shift its focus 9 00:00:27,199 --> 00:00:30,630 toward lowering more software focus cloud-based solutions 10 00:00:30,630 --> 00:00:34,260 carry higher margins the one issue here's the Cisco typically goes 11 00:00:34,260 --> 00:00:37,440 does well when the global economy is warning but outside the United States 12 00:00:37,440 --> 00:00:40,210 was very strong the rest the world not looking so hot 13 00:00:40,210 --> 00:00:43,960 still the stock is relatively cheap air space with 2.2 percent dividend yield 14 00:00:43,960 --> 00:00:47,360 coming out record-breaking quarter on many measures especially given the 15 00:00:47,360 --> 00:00:50,320 company's dominance a ball things internet so let's take a closer look 16 00:00:50,320 --> 00:00:52,610 with john chambers the Chairman CEO says go 17 00:00:52,610 --> 00:00:56,060 on the eve of the huge Consumer Electronics Show in Vegas for more about 18 00:00:56,060 --> 00:00:57,620 how was companies doing where it's headed 19 00:00:57,620 --> 00:01:02,770 John welcome back to make money Jim it's a pleasure to be with you again today 20 00:01:02,770 --> 00:01:06,200 thank you John can you give us a little preview of what you'll be saying at the 21 00:01:06,200 --> 00:01:08,740 giant consumer electronics show because I know that your company's 22 00:01:08,740 --> 00:01:13,820 a bit of the star at the event well Jim I think the 23 00:01:13,820 --> 00:01:17,190 most important issue they will be covered this year's around the unit 24 00:01:17,190 --> 00:01:17,920 thanks 25 00:01:17,920 --> 00:01:22,030 I we caught the unit have everything it's when you digitize everything from 26 00:01:22,030 --> 00:01:23,760 your car to your house 27 00:01:23,760 --> 00:01:26,860 to the clothes you wear to your health care I 28 00:01:26,860 --> 00:01:29,970 to the company's to the cities in countries around the world 29 00:01:29,970 --> 00:01:34,929 that's about a nineteen trillion-dollar are opportunity for profits are cost 30 00:01:34,930 --> 00:01:36,720 savings over the next decade 31 00:01:36,720 --> 00:01:41,380 I within that security becomes a mast you have talked about there is no such 32 00:01:41,380 --> 00:01:42,899 thing as a secure environment 33 00:01:42,900 --> 00:01:47,710 a year or two ago and that is turned out to be very true so the ability to bring 34 00:01:47,710 --> 00:01:49,150 security that picture 35 00:01:49,150 --> 00:01:52,690 then you combine all those what we call market transitions 36 00:01:52,690 --> 00:01:56,990 the elements have clout the elements such software the elements a mobility 37 00:01:56,990 --> 00:02:01,270 collaboration big day takes at church and they enable 38 00:02:01,270 --> 00:02:04,869 every company become a digital company said does it may be the areas we focus 39 00:02:04,869 --> 00:02:05,270 on 40 00:02:05,270 --> 00:02:10,500 key takeaway so GM it's about pace of change if companies or countries 41 00:02:10,500 --> 00:02:14,070 and ability to operate a much faster speed up innovation 42 00:02:14,070 --> 00:02:18,530 that we did before Matt panel be around I V gain fast innovation 43 00:02:18,530 --> 00:02:23,410 I'll be focused on disruptor be disrupted with the president of comcast 44 00:02:23,410 --> 00:02:25,829 and the CEO Bosch as an example Jim 45 00:02:25,830 --> 00:02:30,540 are judged you have often given forecast that seemed wildly outrageous about the 46 00:02:30,540 --> 00:02:32,230 amount of data that was going to be 47 00:02:32,230 --> 00:02:35,899 put on the Internet just as general be generated enable proven 48 00:02:35,900 --> 00:02:39,030 really right how about the next five years how much she said 49 00:02:39,030 --> 00:02:44,850 I think the market is still way too conservative GM on the loads on networks 50 00:02:44,850 --> 00:02:48,810 and the amount of information about 90 percent-plus said today's 51 00:02:48,810 --> 00:02:53,000 I loads are video I think you gonna see the explosion a video 52 00:02:53,000 --> 00:02:56,460 I we build high-end routers now they re capable 53 00:02:56,460 --> 00:03:00,220 I've hando in Liberty billions a video transactions that one time 54 00:03:00,220 --> 00:03:03,910 so I think GM this internet have everything we talked about 55 00:03:03,910 --> 00:03:08,070 I will load networks like never before but you have intelligence throughout 56 00:03:08,070 --> 00:03:08,489 that 57 00:03:08,490 --> 00:03:12,860 connect in the clouds to data centers to the wide area network to the edge 58 00:03:12,860 --> 00:03:16,239 with the capability to converge compute and storage 59 00:03:16,239 --> 00:03:20,820 in processing capability with the network with proper security in scale 60 00:03:20,820 --> 00:03:21,470 ability 61 00:03:21,470 --> 00:03:25,200 which plays right into Cisco sweet spots I think you gonna see explosive growth 62 00:03:25,200 --> 00:03:28,620 I think the impact will be five to 10 times 63 00:03:28,620 --> 00:03:31,989 be impacted the Internet to date in terms of technology 64 00:03:31,989 --> 00:03:35,380 and loads on network small we've known date you are 65 00:03:35,380 --> 00:03:38,720 Salman aggressive in these numbers but a proven to be conservative yourself down 66 00:03:38,720 --> 00:03:41,340 John you did have a great return to growth miss last quarter 67 00:03:41,340 --> 00:03:44,680 at the same time you did mention thanks irv service provider 68 00:03:44,680 --> 00:03:48,040 slowed and you mention two or three providers that you think 69 00:03:48,040 --> 00:03:51,040 have had to scale back any change in that 70 00:03:51,040 --> 00:03:55,100 any change that maybe spend he's coming back in that one area that is so 71 00:03:55,100 --> 00:03:55,610 important 72 00:03:55,610 --> 00:04:00,260 which emit I could let me can you take a step back in 73 00:04:00,260 --> 00:04:03,609 and just remember that everything I'm talking about is what I said about the 74 00:04:03,610 --> 00:04:04,519 prior quarter 75 00:04:04,519 --> 00:04:07,610 are looking out over this next year sedan searchers matters very 76 00:04:07,610 --> 00:04:08,700 specifically 77 00:04:08,700 --> 00:04:12,950 we made major organization changes and how we go to market how we align with 78 00:04:12,950 --> 00:04:13,940 service providers 79 00:04:13,940 --> 00:04:17,548 and where we see our opportunities over the last six to 12 months 80 00:04:17,548 --> 00:04:21,209 that starting to gain traction so did look over this next year 81 00:04:21,209 --> 00:04:25,400 I'd look for steady improvement still challenging introducers matter span so 82 00:04:25,400 --> 00:04:26,900 it's about share wanted span 83 00:04:26,900 --> 00:04:30,199 over the next four quarters and see if we make progress each quarter 84 00:04:30,199 --> 00:04:34,310 but what we also said last quarter gym that I think you hit on very effectively 85 00:04:34,310 --> 00:04:38,650 is we were a little bit more optimistic about the US economy that summer appears 86 00:04:38,650 --> 00:04:42,620 and why we clearly recognized at that point in time and the concerns in Europe 87 00:04:42,620 --> 00:04:46,240 we felt that Europe was in better shape than most people given credit Ford 88 00:04:46,240 --> 00:04:49,380 so we saw some headwinds as it relates to search batters 89 00:04:49,380 --> 00:04:52,960 what we control in that area we think we've organize ourselves very well 90 00:04:52,960 --> 00:04:57,289 to overtime I earn the leadership in that category and returned a reasonable 91 00:04:57,289 --> 00:04:58,020 growth knows 92 00:04:58,020 --> 00:05:01,880 areas quite a jump on your team's has been missin Cisco's more open than ever 93 00:05:01,880 --> 00:05:04,330 Cisco's want to work with a lot of cum is we didn't have 94 00:05:04,330 --> 00:05:07,490 Jayshree you all from arrest 001 recently 95 00:05:07,490 --> 00:05:11,599 who felt that she I'm %uh didn't think you play fair did she use the chart 96 00:05:11,599 --> 00:05:13,259 blind-sided disappointed 97 00:05:13,259 --> 00:05:16,690 when you filed a lawsuit on your total gentleman it did surprise me 98 00:05:16,690 --> 00:05:20,650 that she took the action following a lawsuit because it you are kinda 99 00:05:20,650 --> 00:05:24,840 pick up the phone guy in trying to solve for x mom 100 00:05:24,840 --> 00:05:29,340 would you know if you watch I we are a company that is not like he just in our 101 00:05:29,340 --> 00:05:29,930 nature 102 00:05:29,930 --> 00:05:34,659 I using the example you did wear kurti already winning in the market as United 103 00:05:34,659 --> 00:05:35,780 skates last quarter 104 00:05:35,780 --> 00:05:40,000 in terms of our growth rate is high and switching point away from start-ups 105 00:05:40,000 --> 00:05:43,400 in that market with dramatically higher growth rates and they reach even even 106 00:05:43,400 --> 00:05:45,930 they were much larger company with better gross margins 107 00:05:45,930 --> 00:05:49,870 about once every decade we can have to send a message the market 108 00:05:49,870 --> 00:05:54,770 that we spend six billion dollars a year on our intellectual property in our R&D 109 00:05:54,770 --> 00:05:59,159 and that we will protect that and that you have to say that periodically when 110 00:05:59,159 --> 00:06:02,240 somebody does cross the boundaries on that and you have to send a message both 111 00:06:02,240 --> 00:06:06,229 to dam and others in the market dad it is all about innovation but innovation 112 00:06:06,229 --> 00:06:07,229 is not copy in 113 00:06:07,229 --> 00:06:10,800 I don't take anything personal on this I just about every decade we have to 114 00:06:10,800 --> 00:06:11,820 remind our peers 115 00:06:11,820 --> 00:06:16,349 that we do invest and hi a very much our future innovation and we hope people 116 00:06:16,349 --> 00:06:20,590 accountable not copy that fair chernobyl one thing that has changed is that you 117 00:06:20,590 --> 00:06:21,110 had 118 00:06:21,110 --> 00:06:24,759 perhaps one a great see a possible time prank call running now he is 119 00:06:24,759 --> 00:06:28,590 retired as of last week are you gotta Kramer and they're telling 120 00:06:28,590 --> 00:06:31,330 member what will be different because circuses calls are the most 121 00:06:31,330 --> 00:06:32,669 well-orchestrated 122 00:06:32,670 --> 00:06:36,940 voice had a great 2010 Frank what are we gonna be seen differently on the next 123 00:06:36,940 --> 00:06:38,070 conference call with Cisco 124 00:06:38,070 --> 00:06:41,099 where the exciting thing GM 125 00:06:41,100 --> 00:06:45,530 is that Kelly would be the six EF though that I work with and as you said we've 126 00:06:45,530 --> 00:06:46,810 had six side 127 00:06:46,810 --> 00:06:51,160 generations I have CF those who play with very high integrity in very 128 00:06:51,160 --> 00:06:51,910 effectiveness 129 00:06:51,910 --> 00:06:55,270 I've never had 1 I've never mention gym before by you 130 00:06:55,270 --> 00:06:58,630 in terms that top five CF those that you view 131 00:06:58,630 --> 00:07:01,790 I'd like to see Kelly mentioned within two to three years 132 00:07:01,790 --> 00:07:05,590 earning that confidence from you what you see Kelly would do 133 00:07:05,590 --> 00:07:09,740 will be taking our company to the next generation our ability to become more 134 00:07:09,740 --> 00:07:11,740 horse on a rampant Asian 135 00:07:11,740 --> 00:07:16,430 tying together our 18 different product areas our server so go to market 136 00:07:16,430 --> 00:07:20,930 in a way that produces results for our shareholders so I think just like Evelyn 137 00:07:20,930 --> 00:07:23,110 evolution we done with our senior management 138 00:07:23,110 --> 00:07:26,600 Kelly would take it up one generation I think should do a great job in 139 00:07:26,600 --> 00:07:30,830 engine mad at the world to have a side wager for AAA pass a beer 140 00:07:30,830 --> 00:07:34,050 that within three or four years she's what are your top five CF house 141 00:07:34,050 --> 00:07:38,110 fair bet thank you so much john chambers the chairman/ceo Cisco Systems good to 142 00:07:38,110 --> 00:07:39,220 see you as always john 143 00:07:39,220 --> 00:07:42,350 Jim it's a pleasure thank you I 144 00:07:42,350 --> 00:07:46,460 this is the kinda stop with good dividend with great growth coming 145 00:07:46,460 --> 00:07:50,220 picture 12 all way through this kinda self-made months back

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