Cisco Systems Inc and Royal Bank of Canada to Host Tech Talk on Cisco's Enterprise Switching Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Okay. Yes. Thank you for the presentation. I guess I'll start now with a few prepared questions before I turn it over to potential audience questions. So the first one, to be very basic, from a very high level, right, I think it would be useful to compare the older switches, the legacy switches to the new one, explaining both the first part of why the hardware erodes over time; and then, secondly, what the speed in comparison differences at the new switches; and then, finally, on the security side, with the software functionality difference. Kind of those 3 main items for the comparison.

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Got it. And given that this is essentially going to be a single pane of glass, it allows for smoother, I guess, operation of the network, right? So one of the key items here is you guys are selling a 3-, 5-, 7-year package with this. Are you guys seeing a change in kind of the subscription level from the new series? Meaning, that are people signing up for the longer contracts? Or how has that changed over the last couple of quarters here?

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Got it. And just, I wanted to circle back to your security question. Is there any way to kind of calculate or give some sort of update in terms of how many encrypted attacks you guys are able to prevent at this point? And then others, there's millions of attacks in the system, but what specifically type of encrypted attacks, and how many are you guys essentially preventing per month, or per week, or per day, or whatever metric you use?

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Okay. I'm going to say one more in terms of kind of just putting this all together to see how the security [know] the platform together. One of the main verticals that would make sense in that environment would be a cloud customer, right? So have you guys seen a change in terms of the reception you guys are getting from general cloud customers relative to your older product lines, with the new series out?

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Right. And then, one other one that's interesting. Have you guys seen an ability to upsell kind of your new product lines, like your application-based items like Jasper or AppDynamics, given that you guys are now selling into kind of a one single pane of ecosystem? Are you seeing better cross-selling across your different product lines? Or is it kind of stable?

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : And then, kind of talking about the cost savings here, you mentioned up front at the very beginning that for every $1 of hardware, roughly, you're seeing $3 on the incremental cost after that. So what's the math now with the new Catalyst switches with all the services and software associated with it? What is the expected math, I guess...

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Okay. So -- and then, one more in terms of refresh cycles. I think it's a pretty big core center story now at this point, since you're going into the next several quarters and switching portfolio. So do you guys have a rough number what the average age of the legacy product is within all of your enterprise customers? Or another way to phrase it, I guess, [take away] the backlog as well, either one would work.

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Well I guess, saying backlog in terms of the people you guys expected to upgrade, like $1 spend or something around there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2018 / 5:00PM, CSCO.OQ - Cisco Systems Inc and Royal Bank of Canada to Host Tech Talk on Cisco's Enterprise Switching

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Yes. So the legacy products are likely to be upgraded, right? So is there any way to get our heads around what type of number you're looking at to get to that continuous, like, fast ramping product portfolio?

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Okay. Got it. And then, I'll ask one more financial before turning over to potential questions here. So now that there is a large kind of subscription

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Okay. Got it. I'll turn over to the operator to see if there are any questions online really quick.

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Okay. I'll ask a couple of other ones. So another interesting one has been kind of the transition to 1-gigabit. So according to a lot of reports, essentially, with 1-gigabit, you need to upgrade the PCs before you get the benefits, right, at home? So how do you guys fit into a multi-gigabit environment? And then, secondly, do you guys agree with kind of the third-party growth rates that are out there, whether it's (inaudible) or Gartner and the likes of them as well? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 05, 2018 / 5:00PM, CSCO.OQ - Cisco Systems Inc and Royal Bank of Canada to Host Tech Talk on Cisco's Enterprise Switching

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Right. So I guess 2 ones on that. So what do you think a rough time frame would be to kind of move from the 1 to 2.5, 5 and 10 over the next couple of years here?

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Got it. Given what you said -- I realize that you're switching sides but you have a pretty good vantage point, with regard to the overall Cisco system. So I have an interesting one, which is on 5G. So how do you guys think you'll fit into that? And where will that kind of take off or impact your business in the next couple of years here?

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Okay. I guess, I'll set up with one last one for (inaudible). So just given where you sit, what is the #1 customer item that comes up when they purchase the Catalyst? Essentially, what's the #1 item they're impressed by, by the product portfolio?

Question: Mitchell Toshiro Steves - RBC Capital Markets, LLC, Research Division - Analyst : Perfect. And Marty, for closing remarks?