[unabridged]

I would be surprised if Cisco went bankrupt overnight, but to me their future looks quite bleak. Every day less companies need to buy their hardware as more move to the cloud. The biggest tech companies can build their own hardware. And the hardware isn't extremely technically advanced enough to prevent commodity competitors.

So one day if the revenue begins shrinking and they double down by going into debt to expand, then yes they could be facing bankruptcy just like Nortel.

[YZF]

This might be counter-intuitive but this market is still growing. Random reference from a quick Googling: "NEEDHAM, Mass., June 9, 2021 – The worldwide Ethernet switch market recorded $6.7 billion in revenue in the first quarter of 2021 (1Q21), an increase of 7.6% year over year. Meanwhile, the worldwide total enterprise and service provider (SP) router market revenues grew 14.4% year over year in 1Q21 to $3.4 billion. These growth rates are according to results published in the International Data Corporation" ...

"Cisco finished 1Q21 with a year-over-year increase of 3.4% in overall Ethernet switch revenues and market share of 49.3%. In the higher-speed segment of the Ethernet switch market (25Gb/50Gb,100Gb & 200Gb/400Gb), Cisco is the market leader with 40.9% of revenues. Cisco's combined service provider and enterprise router revenue grew 18.5% year over year, with enterprise router revenue decreasing 1.3% and SP revenues increasing 33.2% year over year. Cisco's combined SP and enterprise router market share stands at 37.6%."

A lot of cloud growth is reflected outside the cloud. Corporations still need networks even if they do some things in the cloud. There's generally just a lot more traffic all over the place.

This isn't really commodity. I work in this industry. a 400Gb switch isn't something you just build yourself or buy at your local electronics store. There is definitely competition but it's not exactly what I'd call commodification. What is true is that some of the building blocks are available...

There's definitely a range of future outcomes for this company but it's not gonna be the cloud that does it. Could be another bubble burst or major economic downturn combined with other factors (which I guess was sort of the Nortel story, though I doubt Nortel was sitting on as much cash as some of their contemporaries).

[adventured]

Cisco isn't the company you seem to think it is. They've spent the last ~15 years gradually diversifying away from that single point of business failure in their old line hardware business. They recognized the threat of cheaper competitive hardware products a long time ago, China gave them a serious wake up call (the issues with Huawei go all the way back 18 or so years now).

The majority of their sales come from software and services now. The business you are likely thinking of when you picture Cisco, has been shrinking. Growth in their other segments (whether organic or acquired) is keeping them flat more or less across the past five years (both sales and operating profit have been close to flat going back to fiscal 2017).

[dboreham]

You know a company has become truly successful when nobody knows exactly what they do. E.g. SAP

[hadlock]

I was surprised when Cisco bought Tidal enterprise orchestration management tool (which I had worked with for years). Great way to get your foot in the door at a lot of Very Large financial companies offering professional software services. They've been buying up tons of B and C tier enterprise software for years, and a lot of blue chip clients in the process.

[mrweasel]

>Every day less companies need to buy their hardware as more move to the cloud.

That's not even Cisco biggest problem. Businesses still need to buy networking equipment, and there a more small datacenters than ever, but they aren't buying Cisco anymore. 10 years ago, Cisco was pretty much your number one choice, now they can't really compete. I'd be surprised if we have much Cisco equipment left in five years. It's almost like their R&D just stopped. Our next green field networking project will be completely without Cisco equipment, and we've been a Cisco partner for 15 years.

[jcun4128]

Listened to a podcast about them recently interesting start of a company (in a bad way). Talking about the founders that were kicked out.