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Growth for Cisco Systems’ Services Business

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Services business accounts for 25% of total revenue

Cisco Systems’ (CSCO) Services business generated almost $12.0 billion in revenue during fiscal 2016 and accounted for 25.0% of the company’s total revenue. More than 84.0% of its Services customer base are Fortune 500 companies. This business provides services in 180 countries and currently has 60,000 partners around the globe.

The Services business aims to drive operational rigor to improve profit margins and grow revenue by driving market transitions. Cisco’s primary strategy is to enhance customer experience by modernizing and simplifying its portfolio.

In the above diagram, we can see that revenue from Cisco’s Solutions Support vertical has grown 51.0% in the last two years, followed by Software Support at 11.0% and Hardware Support at 1.0%.

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Evolution of advanced services

Cisco’s Technology Advisory Services revenue has grown 4.0% in the last two years. Its key focus areas are the cloud, security, digital automation, and digital network architecture. Cisco has invested in what it considers high growth areas such as machine learning, self-learning networks, and advanced analytics.

Cisco is optimistic about long-term revenue growth in the Services segment, driven by a robust portfolio that will also lead to profitable growth. In the first nine months of fiscal 2017, Cisco’s Services revenue has grown 7.0% year-over-year to $9.2 billion and accounts for 26.0% of its total revenue.

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