In a sign of the times, Cisco’s Infrastructure Platforms business revenue — this is Cisco’s biggest product segment and includes its data center switches and routers — declined 3% year over year to $6.39 billion during the second quarter of fiscal year 2021. As company executives quickly pointed out: infrastructure has been the hardest hit by COVID-19.

Meanwhile, Cisco’s Security business, which became increasingly important as companies sent all of their employees to work from home during the pandemic, grew 10% year over year to $822 million.

Surprisingly, its Applications segment, which includes WebEx, was flat at $1.35 billion.

Overall during Q2, Cisco’s total revenue remained flat at $11.96 billion with product revenue down 1% to $8.57 billion compared to a year ago and service revenue up 2% to $3.39 billion.

The vendor said its product orders grew 1% year over year during the second quarter, with enterprise orders falling 9%, public sector increasing 10%, commercial up 1%, and service provider orders growing 5%. The enterprise sector has been hit hardest by the pandemic, and Robbins said he expects those orders to pick up in Q3 and beyond.

Similarly, as standalone 5G networks ramps up, Robbins expects to see service provider — and specifically network operator — orders increase. “From an order perspective, we saw a positive growth in cable, which represents about 15% of segment. We saw triple-digit growth in webscale, which represents 25% of the segment. And then our telco business was down, and that’s roughly 60% of the business.”

Cisco has about 35 global 5G customers, he added, and those customers buy Cisco gear for mobile backhaul, orchestration, and packet core. “We’re early in that transition, and I think that particular sub-segment of SP will begin to show progress for us” as operators continue to build out their core 5G back bones, he explained.

Looking ahead to Q3, Cisco expects revenue to grow between 3.5% and 5.5% year over year.

“We are optimistic about the future and look forward to what lies ahead,” Cisco CEO Chuck Robbins said on the company’s earnings call. “We are seeing encouraging signs of strength across our business,” he continued, noting that during the pandemic Cisco “helped our customers connect, secure, and automate to accelerate their digital agility and a cloud-first world.”

Cisco, along with other traditional IT infrastructure vendors, has struggled during the pandemic as enterprise customers spent less on data center gear.

Meanwhile, as COVID-19 forced some industries to shut down and others to transition to remote work, demand for cloud services and security soared. The three largest public cloud providers, Amazon, Microsoft, and Google, all reported double-digit growth for their most recent quarters, and most of the major security vendors have seen similar success as COVID-19 expanded the threat landscape and increased demand for their tools and services.

As a result, many IT companies including Cisco have pledged to deliver their portfolio as cloud-based, managed services with more flexible consumption models. “If we can deliver it from the cloud, we will,” Robbins said on the Q2 earnings call, pointing to Cisco’s secure access service edge (SASE), which essentially combines its SD-WAN and cloud security services, as a proof point.

Cisco did make progress on its move to software and subscriptions during the quarter, with 76% of software revenue coming from subscription-based software, up 4% year over year.

“I am confident in our ability to capture the long-term opportunities ahead in areas such as cloud, 400G, 5G, security, hybrid work, and next-generation applications,” Robbins said. These priorities echo his six cloud priorities that he’s outlined on previous earnings calls and events. “Looking ahead, we are cautiously optimistic as recent surveys of IT spending indicate year-over-year IT budget growth for calendar 2021, and Cisco remains well positioned among CIOs' top four spending priorities, including network infrastructure, cybersecurity software, as well as cloud migration and cloud infrastructure.”