Cisco Forecasts Growth From Software Shift, but Chip Prices Pressure Profits

Cisco Forecasts Growth From Software Shift, but Chip Prices Pressure Profits
The Cisco Systems logo is displayed at the Mobile World Congress (MWC) in Barcelona, Spain on Feb. 25, 2019. Gabriel Bouys/AFP via Getty Images
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Cisco Systems Inc. on Wednesday forecast that within four years, about half its revenue will come from software and other recurring sales, but its chief financial officer told Reuters high chip prices in its hardware business will keep pressuring overall profits.

Cisco is the biggest maker of networking gear for data centers and corporate campuses, but it is shifting toward selling recurring subscriptions for software such as its WebEx collaboration service and cybersecurity services.