Dive Brief:

• Cisco CEO Chuck Robbins said the company intends to create and begin testing a new network software subscription model within the "next few quarters," according to a CRN report.

• Robbins is a huge proponent of the subscription-based business model. But the move would mark a new approach for Cisco, which is rooted in hardware and one-time purchase sales models.

• The move to a subscription-based model may allow the company to build in new efficiencies and allow for larger partnerships with solutions providers. 

Dive Insight:

Under Robbins, Cisco has become increasingly interested in subscription-based services, where it can maintain steady income as demand for its traditional hardware continues to cool.

"That's the way we'll evolve, and we've begun that journey," Robbins told CRN.

Robbins recently noted that the company’s customers are beginning to upgrade hardware less frequently. At the same time, new competitors are offering cheaper products to undercut the networking giant.  

As the market shifts, Cisco has struggled to maintain its revenue stream. Revenue for Cisco’s core businesses—switching and routing systems—fell 3% and 5% respectively last quarter.

But with the potential new model, it is unclear, however, what would happen to its existing customers if they chose to opt out of subscription based hardware.