Winning in the Marketplace Together

Kit Beall, Vice President, Cloud and Business Services 29 January 2016

–Marc Andreesen, Venture Capitalist

“In the future, software eats hardware. Cloud eats everything.”

78% Workloads processed

in Cloud DCs

by 2018

5TB+ of data per person

by 2020

180B Mobile apps

downloaded

in 2015

30M New devices

connected

every week

277X Data created

by IoE devices

vs. end-user

4.2B Web filtering

blocks per

day

Causing Global Explosion of Apps and Connectivity

Applications and Data Everywhere Result in a Growing Network of Small “Centers of Data”

Enterprise Applications

Dealer Access

Supplier Exchanges

On-board Computer

Machine Apps

Customer Mobile Apps

Mobile Workforce Applications

The Network Has Become the Platform for Digital Business

DATACENTER MOBILE CLOUD EDGE

Streaming Analytics

and

Data Aggregation

Computing

at the Edge

Process

Orchestration

Programmability

of Everything

Integration

of Everything

Polling Question

What does one Zettabyte equal?

a. One billion gigabytes

b. One million petabytes

c. One trillion gigabytes

d. One million exabytes

10+ Zettabytes

By 2019…

Cisco VNI and Global Cloud Index 2014-2019 Update

Visual Networking Index (VNI)

+ = 2.0 ZBs

Non-Data Center

Traffic

NOT included in GCI

Data Center-to-User

Traffic This is the overlap

between VNI

and GCI

Data Center-to-User

Traffic (18%) This is the overlap

between VNI and GCI

Data Center-to-Data

Center Traffic (9%)

+ = 10.4 ZBs +

Within Data

Center (73%)

Traffic that flows from

data center to data center

Traffic that remains

within the data center

Global Cloud Index (GCI)

A 0.1 ZBs

B 1.9 ZBs

C 0.9 ZBs

D 7.6 ZBs A B

A

B

B C D

B

C

D

Global Cloud Traffic by Region Asia Pacific to have Second Highest Traffic Volume by 2019 MEA to Experience Highest Traffic Growth

North America

2014: 888 Exabytes

2019: 3.6 Zettabytes

CAGR 33%

Latin America

2014: 103 Exabytes

2019: 399 Exabytes

CAGR 31%

Western Europe

2014: 390 Exabytes

2019: 1.5 Zettabytes

CAGR 31%

Middle East & Africa

2014: 50 Exabytes

2019: 280 Exabytes

CAGR 41%

Central & Eastern Europe

2014: 90 Exabytes

2019: 447 Exabytes

CAGR 38%

Asia Pacific

2014: 588 Exabytes

2019: 2.3 Zettabytes

CAGR 32%

Source: Cisco Global Cloud Index, 2014–2019

APAC IP Traffic & Service Adoption Drivers

More Devices &

Connections

More Internet

Users

Faster Broadband

Speeds

More Video

Viewing

Source: Cisco VNI Global IP Traffic Forecast, 2014–2019

By 2019:

2014 2019

6.3 Billion 10.5 Billion

2014 2019

23.2 Mbps 49 Mbps

2014 2019

1.4 Billion 2.1 Billion

2014 2019

65% of Traffic

79% of Traffic

IP Broadband Growth Drivers

Polling Question

In 2019, the gigabyte equivalent of all movies ever

made will cross India’s IP networks every…

a. Hour

b. Day

c. Week

d. Month

Digital

Transformation

Key Is Striking the Perfect Balance

Cisco’s Path the the Digital Future

Cisco Cloud Solutions Charter

1 Best next generation platform for hybrid delivery of Cisco SaaS offerings and IoT enablement

2 Best Network Function Virtualization (NFV) software stack for SP and customers

3 Best Hybrid Cloud Enablement and Multi-cloud Management Software

• Network virtualization and visibility

• Orchestration of cloud and

network

• SaaS

Hybrid, network differentiated and secure at the heart of our charter

• Secure

• Policy

• Visibility and Control

• Flexible enablement

How We Will Enable Success for Our Partners

Enable Transform Scale

Time to Revenue

Time to Market Service Velocity

Customer Insight

SP and End-User Monetization Outcomes:

Accelerate Market Share

and Growth

More than Hybrid Cloud…

Application

Policy

Control

Across All

Clouds

Hybrid

IT

Network

Centric

Partner

Ecosystem

Digitization

Enablement

Highly

Secure

Network

Policy

Extension

Cloud-delivered Services

iVPN

Internet

Branch Office

Service Provider

Network

Public Cloud

Private Cloud

Headquarters

PE

MPLS VPN

Internet

Branch Office

Service Provider 1

Public Cloud

Private Cloud

Headquarters

PE

MPLS VPN

Service Provider 2

Hybrid WAN

INET

Dedicated internet

Branch Office

Service Provider 1

Public Cloud

Private Cloud

Headquarters

Service Provider 2

OTT / IaaT

Dedicated internet

INET INET

Dedicated internet

Internet

Large Enterprise (1000+ Employees)

Small Business (< 500 Employees)

Cloud VPN / DMVPN

Mid Market Business (500 - 1000 Employees)

Shift from Hardware to Software and SaaS Based Model

9th largest SaaS

vendor globally

160 Cisco powered cloud

services providers

255 cloud services offerings

#1 in public cloud

infrastructure equipment

market

#1 in hybrid cloud

infrastructure equipment market

$49B Cloud

Infrastructure

Leader

Software & SaaS

differentiated

through provider

offers

Cisco’s Approach to Service Creation

• Mature Technology

• Investments are directly

linked to revenue

• Mergers and Acquisitions

Cloud

NFV SDN

Hypervisor

Technology

Cloud

bursting

Spend is not

directly linked to revenue

Service Agility Operational

Flexibility

Cost Optimization

Powering the Internet

of Everything

• Rapidly maturing

technology

• Infrastructure Cost

Savings are clear

Transforming Network Architectures and

Operations • Slowly maturing

technology

• Uncertain business

benefits

Abstracting for Better App and Network

Interaction

“Software-Controlled” Architectures Will Evolve in SP and Enterprise Networks

Discover

Optimize Trial

Transact

Use Experiment

Begin

Agile Service Creation

Cloud is about continuous customer engagement, not transactions

Service Provider Journey: Full Offer Lifecycle

Land Platform Insertion

Expand Next Market / Service

Accelerate Market Share & Growth

Time to Revenue Time to Market Service Velocity Customer Insight

SP & Enterprise Monetization Outcomes

Enable Transform Scale

Adopt User Monetization

Transform now to digital company

Cloud 2.0

Digital

Era

New Sales

Model

Cloud buyers are now mainstream; price

is no longer top care-about. They seek:

• Lower Risk

• Speed to market

• Improved Service

50% of US Customers have

switched Service Providers due to

poor customer experience

In B2B marketing 57% of typical

buying decisions happens before a

customer even speaks to a supplier

By 2018, more than 50% of IT

purchases will be controlled by

nontraditional buyers like (LoBs and

Marketing)

Sales model has shifted from push

(SP-driven) to pull (customer –

driven)

Only 32% of B2B buyers spend their

buying journey interacting with supplier

or salespeople; Decisions are made via

digital content that is not transactional

New Business and

Financing Models to Reduce Financial

and Execution Risk

Are you Moving in the Right Direction?

Seek Cloud Based

Management Models for Process Automation

Take the

SDN/NFV Leap Now

Smart Network Management

Cloud Delivery

Model of New Services

5 Key Considerations

Going Forward…

• Digital changes everything

• The cloud isn’t just technology – your business must evolve with it

• Increasing focus on brand and the user experience

• Partnerships are key to our collective future