Cisco Systems Inc at CLSA Investors' Forum Transcript

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

Question: Ed Maguire - CLSA Limited - Analyst : Great. Irving, I had a question about software defined networking. A couple of years ago there was a raging debate that software-defined networking was going to be -- was going to affect the traditional networking business in the way that virtualization has had an impact on servers. But that's not really proven out to be the case. I think there was a lot of initial concern. But I would be interested in your view on how the whole idea of software-defined networking, how in a sense the decoupling of the close linkage between some of the networking software and the underlying hardware, is allowing you to pursue a richer software strategy. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 14, 2015 / 6:00AM, CSCO.OQ - Cisco Systems Inc at CLSA Investors' Forum

Question: Ed Maguire - CLSA Limited - Analyst : The Internet of Everything was one of your central themes last year. I think you highlighted that now you are starting to see some real proof points. I think for the people in the room -- I actually was lucky enough to attend Cisco's Internet of Things World Summit; there were about 2,000 people in Chicago. Some really incredible stories. But I would be interested to hear from you particularly on your side here in Asia, what are some of the industries or some of the more, I guess, more successful proof points that you're seeing in terms of this idea of the connected world?

Question: Ed Maguire - CLSA Limited - Analyst : Great. Want to see; do we have any questions? Unidentified Audience Member Similar to software-defined networking, like, a few years ago I guess another hot button for you guys was, I guess, what they called geopolitical issues. I know you said you don't cover Japan -- or sorry, you're not in charge of China. But maybe you can just talk about the issue. How big and how material is that issue not only in China but throughout Asia?

Question: Ed Maguire - CLSA Limited - Analyst : Other questions? Unidentified Audience Member Thanks for the presentation. I thought that was excellent. Your gross margins are equally excellent. How do you go about allocating capital? And has that changed?

Question: Ed Maguire - CLSA Limited - Analyst : Any other questions? I actually had a question, which is that one of the new terms that Cisco has introduced is fog computing. I think there's a lot of initial ideas about Internet of Everything is that there's going to be enormous amounts of traffic that go over wireless networks, but I think it worthwhile to highlight some of the work that Cisco has been doing in advancing this idea and -- because there are a number of assets that you have, including a database, which not many people know that you have. What is fog computing? And how is that different from traditional networking? Is it that it's not just a marketing term; there's some real substance behind that?

Question: Ed Maguire - CLSA Limited - Analyst : Great. Any further, because I do have one more. All right. I wanted to ask about the software business and the transition to more recurring revenues. How are you viewing the customer's willing -- historically you guys sold products, right? They buy networking equipment; it's a capital expense. And you have a number of assets, notably WebEx is a great example that are sold as a subscription. How are you looking at areas -- what areas of the portfolio are most conducive to subscriptions and recurring revenues? And are there any areas of your business that you can actually see making a transition from being products to being recurring revenue-based services?

Question: Ed Maguire - CLSA Limited - Analyst : Fantastic. Does anybody have anything before we wrap up? Great. Well, Irving, I really want to thank you for your time, for coming here; and Marty as well, for traveling a long way. We're eager to see the Internet of Everything continue to unfold and very much appreciative of your time. Thanks, everybody for joining the session.