Cisco sees a decline, and collaboration is flat

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Cisco posted lower-than-expected numbers for the fiscal first quarter yesterday, and gave guidance for the next quarter of revenue falling up to 10%. It appears to be tied to declining sales in emerging markets. Net income dropped to $2 billion, or 37 cents a share, from $2.09 billion, or 39 cents a share.

Digging into the enterprise software side of things, “collaboration” — which includes WebEx, Jabber, and the former Quad enterprise collaboration tool, now renamed WebEx Social — only grew 1% in the period, which is really flat, and is only 8% of the companies revenues.

Cisco 1st Quarter Revenue %
Cisco 1st Quarter Revenue %

I don’t think we can expect much innovation coming out of a “collaboration” product that is based firmly on the WebEx brand and now long-in-the-tooth notions of ‘enterprise collaboration’ based on video-conferencing rooms instead of lightweight, real-time chat that is cropping up everywhere (see Real time isn’t what it used to be: It’s really real time, now).

The Data Center line item grew 44% in the same period, which shows the direction the company’s revenue  is headed.

Remember that Cisco’s CEO, John Chambers, announced plans in August to cut up to 4,000 jobs — primarily middle managers — to remain lean and quick to move despite rising revenue at that  time. A clear warning sign that the company was sensing slowing in the pipeline.

Note: I am putting “collaboration” in scare quotes for two reasons. First, we’ve moved into an era where nearly all work in the business is conducted socially: people share, converse, communicate and cooperate with other people all the time. The term “collaborate” simply means to work together, which is now the norm not the exception. So it’s another adjective, like “social”, where most of the metaphorical power has been drained by overuse.

However, when referring to the category of software that is specifically designed to support working socially I use the term work management, and there are different subcategories based on what sort of activities and information is being supported, like task management, in which the principal information object is tasks, for example.

A second reason for the scare quotes is that make a distinction between cooperative work and collaborative work, as two very different ways of working together, or coworking (see Using “cowork” as an umbrella term for how we work together).