Cisco reported that sales for the last quarter increased by 12%, to $6.1 bn, slightly short of Wall Street estimates in February 8, 2005. Many analysts believe that this might be the first step in a marked slowdown in both revenue and profit growth of the company. In spite of these concerns, Chambers remained optimistic. Chambers told analysts in December 2004 that Cisco would soon unveil four more initiatives that it thought could eventually become $1 bn businesses. Among the focus areas were network management software to help companies make more efficient use of their computers and storage gear, and applications for Internet telephony, such as videoconferencing.

Cisco Systems (Cisco), a leading supplier of routers and switches and other equipment that are used to link networks, has been dominating the market since early 2005. Cisco sells its products primarily to large enterprises and telecommunications service providers, and also offers products designed for small businesses and consumers.

Cisco seems to have successfully overcome the crisis it faced in early 2001 when it had to make major write-offs. Despite this recovery, many analysts wondered whether the company was pursuing unrealistic goals. Cisco wants to grow at 12-15% while maintaining gross margins of 65%. As competition intensifies and the markets become increasingly saturated, are Cisco's targets really achievable?

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