Cisco’s corporate restructuring got off to a solid start with the vendor’s increased focus on artificial intelligence (AI), security, and cloud paving a smooth transition into the networking giant’s fiscal 2025.

Cisco posted what analyst firm William Blair described as “solid” results for the vendor’s first fiscal quarter of 2025, highlighted by revenues coming in just ahead of expectations and that momentum predicted to carry throughout the year. A big part of that initial surge came from AI.

Cisco CEO Chuck Robbins said during the earnings call that the vendor received more than $300 million in AI-related orders during the quarter from its “webscale” customers, which bolstered his confidence “that we will exceed our target of $1 billion of AI orders this fiscal year from webscale customers.”

Analyst firm William Blair did note that Cisco’s math could be undervaluing the AI data center opportunity, though it did add that “Cisco faces tough competition from vendors like Nvidia and Arista who are also targeting sizable deployments across these same webscale customers.”

Robbins later explained that the AI-related webscale sales during the quarter were less than half of Cisco’s total sales from that segment.

“There was a smattering on the non-AI side that would be attributed to sort of classic enterprise technologies, but it was very small in the context of what they procured from us,” Robbins added. “Most of it was Iiternet infrastructure systems, optical routing, switching, etc.”

Robbins said that enterprises might be unsure of just how they want to use AI, but, “they do know that they need modern infrastructure to be prepared to do so, and we're seeing them forward invest to get ready for it.”

Cisco surges on Splunk security splash Another big part of Cisco’s success was based on its Splunk operations, which helped to double revenues from the vendor’s security segment compared to the same period last year. Taking out Splunk’s contribution, Cisco’s security operations posted just a modest 2% year-over-year increase.

Of course, Cisco didn’t spend $28 billion on Splunk to not count its contribution, with CEO Chuck Robbins highlighting the ongoing integration of those assets.

“We now have a dozen updated data integrations between Cisco and Splunk across our security and networking portfolio, including secure firewall, Catalyst Center, SD-WAN, and ICE,” Robbins said during his prepared remarks. “We continue our joint selling motions between Cisco and Splunk, including a Cisco Secure Network Analytics and XDR [extended detection and response] alongside Splunk's SIEM [security information and event management], offering enhanced capabilities to the security operations center. We also continue to build our market-leading observability solutions to accelerate full-stack observability for the enterprise.”

Robbins also noted that Cisco’s Hypershield cybersecurity platform has gained traction and is, “a very high-impact solution that actually is very effective in some of the most, I'd say, advanced data centers in the world.”

The Hypershield platform was unveiled earlier this year, with Cisco executive Jeetu Patel at that time telling SDxCentral that the platform is “probably the most consequential security innovation we have done in the 40 years that Cisco has been around.”

Is networking turning around? Cisco’s most recent quarter also continued a rebound for the vendor’s networking business. Robbins explained that networking sales garnered double-digit order growth during the quarter “driven by switching, wireless, and internet infrastructure.”

“Looking at data center switching in particular, we have seen three consecutive quarters of double-digit order growth and an acceleration from Q4 into Q1,” Robbins explained. “This shows our competitive strength in this key market and the power of our Nexus brand in the build out of private cloud infrastructure by our customers. We expect this momentum to continue as customers are showing significant interest in our 400-gig and 800-gig switches based on Silicon One.”

Cisco had previously de-prioritized its networking operations in favor of greater growth opportunities in the AI, security, and cloud space. However, an expected surge in AI traffic is putting an increased focus on cloud and data center networking capacity.

Cisco is also set to steal some networking market share due to ecosystem concerns.

Cisco CFO Scott Herran had previously noted that Hewlett Packard Enterprise’s pending $14 billion purchase of Juniper Networks was causing “uncertainty” in the enterprise WLAN market that could be benefiting Cisco.

“I think for sure that’s created just a degree of uncertainty and a question of, hey, should I consider if I was previously a vendor or a customer of either of those, now is the time to kind of open up and look at other opportunities,” Herren said during an investor conference. “And we’ve seen our wireless business, our orders greater than $1 million grew more than 20% in the fourth quarter.”

That networking surge could also get a boost from the product line thinning it pushed through as part of the recent reorganization.

“It looks like Cisco's realizing that all the complexity of customer choice and all these variations and offering a zillion features is probably not the way to go. I think Chuck realized it,” Andre Kindness, principal analyst at Forrester Research, told SDxCentral in an interview. “If you look at the ACI [Application Centric Infrastructure] and Cloud Dashboard for Nexus starting to consolidate, and then the Catalyst line and the Aironet line and the Meraki line are consolidating, it's just the right move. The market has told them that for the last 10 years, it just took them a while to recognize it.”