Cisco is betting that this cloud offering, along with its subscription-based revenue model, will pave the way forward from its legacy hardware business.
Cisco's latest release, the Catalyst 9000 series of switches, was announced in June with a subscription model in which customers buy the switch hardware, and separately subscribe to software offerings for a set period of time.
It's a model familiar to most consumer tech users, where the customer pays to access the latest version a software for a set period of time, and keeps paying to retain access.
Cisco's old model, and the one that most of its legacy products still use, is a licensing model, where customers buy editions of software.
That software is theirs to use until the end of time, but if they want the latest updates, they have to license a new edition.
Ian King (Bloomberg) -- Cisco Systems Inc. surged to a 17-year high in early trading Thursday after the maker of machinery that carries most of the world’s internet data gave a bullish forecast for sales and profit.
The technology of networks is increasingly shifting to software control and security of data flow and away from fixed-purpose hardware.
At the same time, some of the largest buyers of gear -- owners of data centers such as Amazon.com Inc.’s Amazon Web Services and Microsoft Corp.’s Azure -- are increasingly designing their own hardware forcing Cisco to come up with new, cheaper and more flexible products that might interest them.
Infrastructure platforms, which includes Cisco’s main switch and router businesses, had sales of $6.7 billion, up 2 percent from a year earlier.