How Software Subscriptions Help Cisco Earn More Than Half Its Revenue

At its inception in 1984, Cisco was a hardware company. Today, digital transformation isn’t just about changing employee practices and company culture for how they do business. Digital transformation is the basis for an entirely new business model and revenue stream. Executive Vice President and Chief Customer Experience Officer Maria Martinez speaks at length with Bret Taylor, Salesforce’s president and chief operating officer. Together they cover the human elements of the digital worker, the rush for Webex under COVID-19, and their software subscription services.

Halfway through this episode we introduce Revenue Cloud, a new Sales Cloud tool that connects your customer with revenue lifecycles. And don’t click away, as Eddie Vedder is the musical guest.

Here are a few quotes and highlights from Cisco’s Maria Martinez:

How are people a part of your digital transformation experience?

Clearly digital is at the center of everything we’re trying to do. There are less opportunities to be face to face with customers, so we have to leverage all the digital media we have. When COVID-19 happened, everyone transitioned to work from home, remote connectivity, Webex (Cisco’s video conferencing software) and all those things. It put to the test from day one the importance of digital. When we think about the transformation, there’s a digital component, but there’s also a big human component. We call it Collaborative Intelligence – humans and machines coming together to drive this new experience.

When the entire world suddenly needed video conferencing software, what did that look like for your Webex team?

In the first three weeks of the pandemic, we had to deliver 10X the volume on Webex. We had thousands of company volunteers on hand just to answer the phones and to deal with engineering customers who were developing code. We had to move servers from everywhere we found them in the company – under desks! everywhere! – just to quickly build infrastructure for Webex. It was a crisis. Now we’re more in a steady state of the new normal.

People think of Cisco as a hardware company. Tell us about your transition to a software subscription model.

When we talk about the customer experience transformation, it’s mainly about business subscriptions. In our old model, which was mainly hardware, we would build gray boxes, we’d ship them, and then we’d go away. People do still think of Cisco as a hardware company. But right now, 51% of our revenue is services and software. A lot of people don’t know that. Even for the switches and the routers we provide, we’ve taken the software, which is agile and a big part of the value, and we’ve been able to move that to subscription.

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Watch the Revenue Cloud demo

At minute 24, see an early software demonstration of Revenue Cloud, our just-released business-to-business (B2B) software solution offering self-service for business clients, and a complete picture of product sales through multiple channels.

Hear the music

Eddie Vedder! Yes, Eddie Vedder speaks, sings, and plays guitar at the 32-minute mark.

Watch the whole conversation

This was the latest edition of Leading Through Change, our live video conversation series exploring how leaders use software to drive impactful change in industry. For more interviews: Salesforce.com/Live.