This sorry earnings report was the latest manifestation of an ongoing saga of woe for Cisco. Previously, the Q3 earnings announcement contained poor forward guidance and prompted a drop in share price of 10.2%.
There have been years of layoffs, cost cutting, loss of market share, massive security breaches of its products, and restructuring as the company was hit by waves of market evolution away from its high priced, exclusive brand strategy and toward software-defined networking and generic switching equipment.
As a result of this change in demand, Cisco was obliged to abandon its exclusive brand business model to compete on price, dropping its insistence that customers use only its costly hardware. The ramifications of these enforced changes are now playing out in Cisco's quarterly earnings reports.