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Networking firm Cisco Systems Inc. will add Microsoft Corp.'s Teams messaging app to its meeting devices, the two firms said on Wednesday, offering users an alternative to its own Webex video conferencing app.

Cisco's Jeetu Patel, head of Security & Collaboration, said the company aims to be the hardware platform for a wide range of conferencing software platforms.

"The way this market is evolving is very similar to the way that the movie entertainment market evolved," Patel said, with consumers having multiple subscriptions to streaming services like Netflix, Disney, HBO and Hulu.

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"There's going to be times that people want to jump on a Microsoft Teams call, they want to jump on a Zoom call, they want to jump on a Google call."

Asked whether the strategy could cannibalize market share for Cisco's Webex app, Patel said he believed the company will benefit if customers have a better experience using multiple platforms.

Webex, once a widely used conferencing platform, has lost out to several newcomers including Zoom Video Communications Inc (ZM.O), which was founded by an early Webex engineer and grabbed a large share of the market during the coronavirus pandemic.

Ilya Bukshteyn, vice president of Microsoft Teams Calling and Devices, told Reuters the Teams Room software already runs on several other hardware devices and will be available on Cisco devices from the first quarter of next year.

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Microsoft made the announcement at its annual Ignite conference.

Patel conceded "many people have a misconception of Webex as their granddad's software" but said in the last two years Cisco has launched many new functions, including real-time translation and transcription of meetings, that would eventually allow a multi-language conversation through Webex's video platform.

October 12, 2022, 11:17 AM EDT

Videoconferencing users will be able to choose between running Cisco Webex or Microsoft Teams natively on their Cisco Meeting devices and cameras starting in 2023, the two companies announced.

Cisco Systems and Microsoft are partnering up to give users another videoconferencing option natively on Cisco Meeting Devices.

Videoconferencing users will now be able to access and run Microsoft Teams – not just Cisco Webex -- from their Cisco Room and Desk Devices, which will be certified for Microsoft Teams, the two companies announced at Microsoft’s annual Ignite conference on Wednesday.

The newly forged partnership has Cisco becoming a partner in the Certified for Microsoft Teams program for the first time, the networking giant said.

[Related: Cisco Talent Bridge Expands Diversity, Tech Talent Pool; Connects Candidates To Cisco Partners]

Via the terms of the new partnership, Teams will run natively on Cisco Room and Desk devices starting the first half of 2023, giving users the option of staying within the Teams experience while taking advantage of Cisco’s video and camera technology, complete with noise removal and built-in intelligence, the companies said.

Six of Cisco's popular meeting devices and three peripherals will be certified for Teams, with more to come. The first certified devices are slated to include the Cisco Room Bar, the Cisco Board Pro 55-inch and 75-inch, and the Cisco Room Kit Pro for small, medium and large meeting room spaces. The Cisco Desk Pro and Cisco Room Navigator will follow, San Jose, Calif.-based Cisco said.

“Interoperability has always been at the forefront of our hybrid work strategy, understanding that customers want collaboration to happen on their terms — regardless of device or meeting platform,” Jeetu Patel, executive vice president and general manager of Cisco’s Security and Collaboration business units said in a statement on the new partnership. “Our partnership with Microsoft brings together two collaboration leaders to completely reimagine the hybrid work experience.”

The certified devices can be managed in both the Teams Admin Center and the new Teams Rooms Pro Management Portal, as well as through the Cisco Control Hub device management.

Copyright © 2022 IDG Communications, Inc.

Customers will now have the option to run Microsoft Teams by default on Cisco Room and Desk devices

REDMOND, Wash., and SAN JOSE, Calif. — Oct. 12, 2022 — Cisco and Microsoft Corp. Wednesday announced at Microsoft’s annual Ignite conference a new partnership that will provide customers with more choice. In the first half of 2023, Cisco and Microsoft will soon offer the ability to run Microsoft Teams natively on Cisco Room and Desk devices Certified for Microsoft Teams, with the option of Teams as the default experience. Cisco will become a partner in the Certified for Microsoft Teams program for the first time.

“Interoperability has always been at the forefront of our hybrid work strategy, understanding that customers want collaboration to happen on their terms — regardless of device or meeting platform,” said Jeetu Patel, EVP and GM, Security & Collaboration, Cisco. “Our partnership with Microsoft brings together two collaboration leaders to completely reimagine the hybrid work experience.”

“Our vision to make Teams the best collaboration experience for physical spaces is brought to life by our incredible ecosystem of hardware partners,” said Jeff Teper, president, collaborative apps and platforms at Microsoft. “By welcoming Cisco as our newest partner building devices Certified for Microsoft Teams, we are excited to bring leading collaboration hardware and software to market together for our joint customers.”

Initially, six of Cisco’s most popular meeting devices and three peripherals will be certified for Teams, with more to come. The first wave of devices, expected to be certified by early 2023, will include the Cisco Room Bar, the Cisco Board Pro 55-inch and 75-inch, and the Cisco Room Kit Pro for small, medium and large meeting room spaces, respectively. The Cisco Desk Pro and Cisco Room Navigator will follow. Customers will have the option to make Microsoft Teams Rooms the default experiences, and the devices will continue to support joining Webex meetings with all the features and functionality customers enjoy today. The first peripheral — the Cisco Desk Camera 4K — is an intelligent USB webcam and will be available by the end of October 2022, followed by two headphones with a Teams button by early 2023.

Microsoft Teams customers will enjoy the digital workplace where they connect and collaborate with teammates, partners and customers, combined with Cisco’s high-quality, reliable video technology with powerful camera intelligence and noise removal technologies that enable inclusive and collaborative meeting experiences. All certified devices will be manageable in the Teams Admin Center and the new Teams Rooms Pro Management Portal, as well as through the Cisco Control Hub device management.

About Cisco

Cisco (NASDAQ: CSCO) is the worldwide leader in technology that powers the Internet. Cisco inspires new possibilities by reimagining your applications, securing your data, transforming your infrastructure, and empowering your teams for a global and inclusive future. Discover more on The Newsroom and follow us on Twitter at @Cisco.

Cisco and the Cisco logo are trademarks or registered trademarks of Cisco and/or its affiliates in the U.S. and other countries. A listing of Cisco’s trademarks can be found at www.cisco.com/go/trademarks. Third-party trademarks mentioned are the property of their respective owners. The use of the word partner does not imply a partnership relationship between Cisco and any other company.

About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.

For more information, press only:

Microsoft Media Relations, WE Communications for Microsoft, (425) 638-7777, [email protected]

Cisco Media Relations, Melissa Chanslor, (408) 527-0792, [email protected]

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com. Web links, telephone numbers and titles were correct at time of publication but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at https://news.microsoft.com/microsoft-public-relations-contacts.

It is hard to get excited after looking at Cisco Systems' (NASDAQ:CSCO) recent performance, when its stock has declined 7.4% over the past month. However, a closer look at its sound financials might cause you to think again. Given that fundamentals usually drive long-term market outcomes, the company is worth looking at. Particularly, we will be paying attention to Cisco Systems' ROE today.

Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. Put another way, it reveals the company's success at turning shareholder investments into profits.

View our latest analysis for Cisco Systems

How Is ROE Calculated?

The formula for return on equity is:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity

So, based on the above formula, the ROE for Cisco Systems is:

30% = US$12b ÷ US$40b (Based on the trailing twelve months to July 2022).

The 'return' is the profit over the last twelve months. So, this means that for every $1 of its shareholder's investments, the company generates a profit of $0.30.

What Is The Relationship Between ROE And Earnings Growth?

So far, we've learned that ROE is a measure of a company's profitability. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.

Cisco Systems' Earnings Growth And 30% ROE

Firstly, we acknowledge that Cisco Systems has a significantly high ROE. Additionally, the company's ROE is higher compared to the industry average of 11% which is quite remarkable. This probably laid the groundwork for Cisco Systems' moderate 18% net income growth seen over the past five years.

As a next step, we compared Cisco Systems' net income growth with the industry and found that the company has a similar growth figure when compared with the industry average growth rate of 17% in the same period.

Story continues

Earnings growth is an important metric to consider when valuing a stock. It’s important for an investor to know whether the market has priced in the company's expected earnings growth (or decline). Doing so will help them establish if the stock's future looks promising or ominous. If you're wondering about Cisco Systems''s valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry.

Is Cisco Systems Efficiently Re-investing Its Profits?

The high three-year median payout ratio of 54% (or a retention ratio of 46%) for Cisco Systems suggests that the company's growth wasn't really hampered despite it returning most of its income to its shareholders.

Additionally, Cisco Systems has paid dividends over a period of at least ten years which means that the company is pretty serious about sharing its profits with shareholders. Upon studying the latest analysts' consensus data, we found that the company's future payout ratio is expected to drop to 41% over the next three years. Regardless, the ROE is not expected to change much for the company despite the lower expected payout ratio.

Conclusion

Overall, we are quite pleased with Cisco Systems' performance. Especially the high ROE, Which has contributed to the impressive growth seen in earnings. Despite the company reinvesting only a small portion of its profits, it still has managed to grow its earnings so that is appreciable. With that said, the latest industry analyst forecasts reveal that the company's earnings growth is expected to slow down. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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US tech giant Cisco Systems has vowed to focus on user-centric applications, digital infrastructure transformation, enterprise cybersecurity and hybrid work support as strategies to drive growth of business customers and support Thailand's digital transformation.

"Thailand is on the right trajectory to become a digital economy heavyweight in the region. As it continues to chart its next phase of growth, businesses need to transform themselves to stay relevant in the burgeoning digital economy," said Taveewat Chantaraseno, managing director for Cisco Thailand and Myanmar.

Mr Taveewat said he was aware of economic headwinds that might hamper enterprises' investment in technology. The company has a financing arm -- Cisco Capital -- that can assist customers in such an investment, he noted.

"In the past two years, the number of customers participating in the firm's financing programme has surged 30-50%," Mr Taveewat said.

He said hybrid work, Industry 4.0 and hybrid cloud are the prevailing digital trends that could shape businesses.

According to Mr Taveewat, digital transformation can help enhance Thailand's competitiveness, unlocking 2.5 trillion baht in economic value a year by 2030.

Cisco set out four strategic targets for the Thai market in fiscal 2023.

The first lies in efforts to make applications that cater for good customer experiences, Mr Taveewat said.

Cisco's full-stack observability innovation serves as a tool that can show the whole functioning process of the apps, deliver in-depth information and recommend actions to optimise all end-user experiences.

The second involves digital infrastructure transformation. He said there are 20 billion connected devices worldwide now and the number is expected to surge to 29 billion by 2023.

"Organisations need to transform their infrastructure with the network at its core to create and deploy their policies in an automated way to deliver a seamless experience," said Mr Taveewat.

Cisco's Secure Access Service Edge (SASE) architecture combines networking and security functions in the cloud to connect users to apps and data in any environment and from anywhere and control access by enforcing a consistent set of security enterprise policies.

The third involves efforts to ensure enterprise security, including through applications and hardware.

Last year, 65% of small and medium-sized enterprises suffered cyber-incidents, Mr Taveewat said.

The fourth is to support hybrid work by providing a platform that can help enterprises enhance visibility, secure collaboration and secure access to support all types of interactions in the hybrid world, he said.

The firm's study shows hybrid work makes 85% of Thai employees happier.

"Cisco is a platform company where it has an end-to-end support from hardware and software to services. Globally, from 2015 to 2021, its subscription software revenue grew 23%," Mr Taveewat said.

"We see refreshment of technology back in hospitality, education and manufacturing in the post-pandemic period," he said.

Cisco is committed to moving ahead with its Country Digital Acceleration (CDA) programme, in which the company works with governments globally to unlock digital power.

In Thailand, the CDA scheme began in November last year with projects including supporting smart factories through 5G power and creating healthcare connection between 10 hospitals.