1. © 2003, Cisco Systems, Inc. All rights reserved. 1117659_03_2003_c4 © 2003, Cisco Systems, Inc. All rights reserved. 1117659_03_2003_c4

2. 2 © 2003, Cisco Systems, Inc. All rights reserved. Ammar Hanafi Vice President New Business Ventures Cisco Systems Cisco Systems: Innovating for The Enterprise

3. © 2003, Cisco Systems, Inc. All rights reserved. 3337659_03_2003_c4 A 360 Degree View of Business Innovation Processes (How) Customers (Who) Customer Experience Solutions Channels (Where) Products (What) R&D Platforms Networking Revenue Model Value Chain Logistics/ Supply Chain Source: Managing Business Innovation, Sawhney and Wolcott, Kellogg School of Management, Oct. 2002

4. © 2003, Cisco Systems, Inc. All rights reserved. 4447659_03_2003_c4 The Context For Innovation: Our Customers Growing Our Revenues in New Growth Markets Increasing Our Market Share in Core Markets Customer Success = Cisco Success Customer Success = Cisco Success

5. © 2003, Cisco Systems, Inc. All rights reserved. 5557659_03_2003_c4 The Technology Strategy No Compromises Performance Routers and switches Silicon Hardware Lower cost Routers and switches Silicon Hardware Lower cost Convergence - Data, Voice, Video, Storage Security Manageability Convergence - Data, Voice, Video, Storage Security Manageability Lasting architecture Generational approach Lasting architecture Generational approach Investment Protection Intelligent Services © 2003, Cisco Systems, Inc. All rights reserved. 7659_03_2003_c4

6. © 2003, Cisco Systems, Inc. All rights reserved. 6667659_03_2003_c4 Innovation Performance Investment Protection Intelligent Services IBSG Channels Partnerships and Alliances Service and support IBSG Channels Partnerships and Alliances Service and support Secure Robust Adaptable Fair Scalable Global Next Set of requirements Focused investments Understanding of business models Next Set of requirements Focused investments Understanding of business models The Innovation Cycle Intelligent Information Network Intelligent Information Network © 2003, Cisco Systems, Inc. All rights reserved. 7659_03_2003_c4

7. © 2003, Cisco Systems, Inc. All rights reserved. 7777659_03_2003_c4 Source: Yahoo Finance 7/17/03 Intel Microsoft IBM Dell Cisco Q2 ‘02 Q3 ‘02 Q4 ‘02 Q1 ‘03 0% 5% 10% 15% 20% R & D as % of Revenue © 2003, Cisco Systems, Inc. All rights reserved. 8551_08_2003 Investment in Technology Innovation

8. © 2003, Cisco Systems, Inc. All rights reserved. 8887659_03_2003_c4 Extending Our Core Business with New Growth Markets Customer contacts / partnerships Contiguity of businesses Mastery of technology End-to-end system extension Customer contacts / partnerships Contiguity of businesses Mastery of technology End-to-end system extension © 2003, Cisco Systems, Inc. All rights reserved. 7659_03_2003_c4

9. © 2003, Cisco Systems, Inc. All rights reserved. 9997659_03_2003_c4 Where We’re Spending: Core and New Growth Markets Routing, Switching, and Software Security Telephony Wireless / Mobility Storage Networking Security Telephony Wireless / Mobility Storage Networking Security Telephony Wireless / Mobility Security Telephony Wireless / Mobility Enterprise Commercial Service Provider Metro Converged packet networks VPN Cable Voice Metro Converged packet networks VPN Cable Voice CORECORE CORECORE © 2003, Cisco Systems, Inc. All rights reserved. 7659_03_2003_c4

10. © 2003, Cisco Systems, Inc. All rights reserved. 10 7659_03_2003_c4 Systems Approach: A Foundation for Growth Routing Switching Optical Wireless LAN Storage Networking IP Communications HA QoS Multicast Virtualization Security Future: Application Orientation Future: Application Orientation Network Management/Provisioning © 2003, Cisco Systems, Inc. All rights reserved. 8551_08_2003

11. © 2003, Cisco Systems, Inc. All rights reserved. 11 7659_03_2003_c4 New Enterprise Reality Security Points WLAN Storage Area Networks LAN WAN Past: SeparatePresent: HybridFuture: Convergence Voice Network Video Confer- encing IPTel / Voice Security WLAN LAN and WAN Video SAN Secure Converged Network Data Voice Video Storage Wireless Wired

12. © 2003, Cisco Systems, Inc. All rights reserved. 12 7659_03_2003_c4 Network-Embedded Applications Secure Converged Network PBX and Key Systems Firewall and VPNs Storage Virtualization Software Storage Virtualization Software Mobility Management Mobility Management

13. © 2003, Cisco Systems, Inc. All rights reserved. 13 7659_03_2003_c4 The Secure Converged Network as a Service Delivery Platform Packet Layer Services Network- Embedded Services Voice Security Mobility Storage Single point of control Ubiquity of implementation Services are end-to-end Cost advantage

14. © 2003, Cisco Systems, Inc. All rights reserved. 14 7659_03_2003_c4 Example: Full Service Branch of the Future 14 Presentation ID © 2002, Cisco Systems, Inc. All rights reserved. Embedded Security & Security Appliances Access Routers Catalyst Switches Wireless LAN CallManager Express™ and SRST

15. © 2003, Cisco Systems, Inc. All rights reserved. 15 7659_03_2003_c4 Cisco Access Router Evolution Achieving Full “Branch in a Box” Multi-Protocol Routing, Access Control, QoS Hybrid Keysystem voice- VoFR, VoIP Voice Applications Content Delivery Advanced Security Advanced Security Low Density Switching Low Density Switching IP Telephony 3700 Flagship FSB Router IOS Firewall/ Encryption Intelligent Information Network

16. © 2003, Cisco Systems, Inc. All rights reserved. 16 7659_03_2003_c4 Summary: Key Technology Trends Virtualization of resources Virtualization of location Mobility of access Scalability of applications Embedded security Video Wireless Virtualization of resources Virtualization of location Mobility of access Scalability of applications Embedded security Video Wireless

17. © 2003, Cisco Systems, Inc. All rights reserved. 17 7659_03_2003_c4 The Network of Networks

18. © 2003, Cisco Systems, Inc. All rights reserved. 18 7659_03_2003_c4 Enterprise User Productivity Driven By Access Any Place, Any Time, Via Any Device The Network of Networks Applications

19. © 2003, Cisco Systems, Inc. All rights reserved. 7659_03_2003_c4