Significant revenue rise in the last 3 years
Cisco Systems (CSCO) is considered a market leader in the worldwide security appliance market with a 16% share. The other top players are Palo Alto Networks (PANW), Check Point Software Technologies (CHKP), Fortinet (FTNT), and Symantec (SYMC) with shares of 14%, 12.6%, 10.6%, and 4.6%, respectively.
Cisco’s Security business generated revenue of $2.2 billion in fiscal 2017, a rise of 9% YoY (year-over-year) compared to $2 billion in fiscal 2016. Revenue rose 12% YoY in fiscal 2015 and 13% YoY in fiscal 2016. Revenue rose 8% in fiscal 1Q18 to $585 million. Deferred revenue for Cisco in its Security segment rose 42% YoY in fiscal 1Q18.
Fastest growing business
As we already saw in this series, most of Cisco’s revenue comes from its Infrastructure Platform business, which is generally a slow-growth vertical. However, demand from the worldwide security market has risen over the last few years, driven by the growing number of cyber threats. Cisco is looking to improve revenue growth in this segment with a diversified portfolio of solutions and a focus on multi-cloud infrastructure.
The Security segment helps offset the decline in its other business verticals, although it accounts for less than 5% of Cisco’s total revenue.