Dive Brief:

• Cisco is riding high following a strong Q4 driven by increased product and services revenue. The company also reported year-end earnings, highlighting total FY18 revenue of $49.3 billion, up 3% year-over-year.

• Cisco has worked to shift its portfolio to focus on software and subscriptions, particularly as more customers have adopted multicloud environments. "Our strategy is working," said Chuck Robbins, chairman and CEO of Cisco, speaking Wednesday on the earnings call.

• Part of the company's transformation strategy has relied on acquisitions to diversify its portfolio. In FY18, Cisco closed its acquisition of Accompany and announced its intent to acquire Duo Security and July Systems, Inc., which offers a location platform delivered as a service. The deal with July Systems closed in the Q1 of FY19.

Dive Insight:

Cisco was quick to highlight "innovation" in its FY18 earnings, with executives mentioning it 10 times during the call. More than just a buzzword, Cisco has embraced overhauling its product portfolio, revamping offerings for a more security-conscious world that has turned away from traditional on-premise offerings.

The company has had to take a two-pronged approach: Revamp products internally, shifting to software and subscription-based products; and acquire companies.

Since the beginning of 2015, Cisco has acquired or announced the intent to acquire 31 companies, led by the pricey purchases of AppDynamics for $3.7 billion in 2017.

For tech giants, it is often easier to purchase another company and integrate offerings rather than standing up a product from scratch. Morphing WAN into software defined WAN is an obvious and attainable transition for Cisco's core offerings.

But, for example, building trusted multifactor authentication offerings is not as easy. With the Duo Security Cisco purchased advanced functionalities and accessed an mature customer base along the way.