Beyond hardware, Cisco is expanding its software and services footprint. The Webex AI agent, quantum networking

Cisco's Strategic Expansion Beyond Hardware: 1. **Shift to Software and Services**: Cisco is transforming into a more software-centric company, driven by the growth of its software business and the expansion of its services. This shift is evident in the significant increase in software subscriptions, which now account for 89% of software revenue. This transformation is a key component of Cisco's strategy to capitalize on high-margin opportunities in software and AI-centric solutions. 2. **Emphasis on AI-Driven Growth**: Cisco's focus on AI is a critical aspect of its strategic repositioning. The company has seen a 9% year-over-year revenue increase in Q2 FY2025, with AI infrastructure orders surpassing $700 million in the first half of the fiscal year. The integration of Splunk and the acquisition of Deeper Insights AI Ltd. further solidify Cisco's position in the AI security and analytics space. 3. **Strategic Partnerships and Capital Allocation**: Cisco's partnerships with AI startups are instrumental in future-proofing its offerings against disruptive competitors. The company's capital allocation strategy, including aggressive stock repurchases and dividend increases, reflects its confidence in the growth prospects of its AI-driven business model. In conclusion, Cisco's strategic expansion beyond hardware is well underway, with a strong focus on software, AI, and services. The company's financial performance and analyst sentiment indicate a positive outlook, supported by its successful integration of acquisitions and its strategic investments in emerging technologies.