UPDATED 11:40 EDT / MAY 19 2011

Amidst Decline, Cisco Does Damage Control

Cisco’s stock has been sliding quite a bit in the past four quarters, and CEO John Chambers decided to take action recently. It’s interesting to look at a timeline of how Cisco’s troubles started, and how they – as well as more positive strides – developed. Focus.com outlined the journey in this infographic (see below).

Cisco was founded in 1984 by Lan Bosack and Sandy Lerne. Three years later the soon to be networking giant secured $2 million in funding. At the same time the company goes however form $224, both the founders leave the company.

In the 10 years after 1990, Cisco was busy gaining strength, and boosting its offerings portfolio. At the height of the tech bubble, Cisco reached a market capitalization of $500 million, but it already suffered its first major lawsuit by 2001.

Throughout the next few years, an antitrust suit by Multiven and an investigation into an alleged tax fraud carried out by the company in Brazil were also added to the list. Nevertheless, Cisco acquired Protego in 2001, what ultimately become the MARS offering. The secure networking has gained momentum until 2008, when certain vulnerabilities make it harder for Cisco to be able to compete with other offerings.

Cisco’s actual fall began in 2007, when orders were 17 percent lower than expected in the month of January. During the recession the networking giant has seen an `18 percent drop in sales, and its stock gradually skid. Chief executive John Chambers has been attempting to reboot his company, and it seems one of the most significant ways he means to approach this is by cutting on Cisco’s consumer businesses.

The first one to go was the company’s Flip division, and now The Register reports Cisco’s consumer router Linksys business. According to Kelly Fiveash, Cisco “refuses to deny” it plans on selling the division, which may in fact mean there is some truth to the rumors that have been running around in the past few weeks.

Cisco’s on the path to recovery, and has been making a number of pushes to get closer to that goal. It recently unveiled a couple of new infrastructure solutions developed jointly with Microsoft, and Michael Rau, VP & CTO for Cisco’s Borderless Network Architecture business even contributed his three “Myth” guest posts to our blog.


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