Cisco lands $1 billion defense IT contract

A Cisco sign at the company's HQ with trees in the background
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Tech giant Cisco Systems beat out two other bidders and landed a whopping $1.18 billion IT contract with the US Department of Defense.

Cisco has seen a recent decline in its traditional switch and router markets, forcing it to switch to higher-growth areas like security software and cloud computing. That switch has paid off, as the Defense Information Systems Agency (DISA) has announced users across the Department of Defense will use Cisco Smart Net Total Care and Software Support Services, which offers 24-hour hardware, digital, and automated management support.

The Department of Defense will also have access to Cisco’s technical assistance center for help managing incidents, security alerts, service coverage, and installed Cisco bases.

The contract is for up to three years — a one-year base period followed by two one-year option periods.

The US Defense Department, the nation’s largest employer with a $700 billion budget, is a prime target for hackers and has seen its share of data breaches.

Just last year, DISA disclosed a mid-2019 breach that potentially compromised its staff’s data, including their Social Security numbers. According to estimates, the breach impacted up to 200,000 service personnel.

The US military sustained other serious data protection incidents in the past few years, including the October 2019 discovery that nearly 180GB of highly sensitive US government, Department of Homeland Security, and military personnel data was exposed through an unencrypted AWS database. The exposed information included past and future travel arrangements and log in data.

Cisco Systems’ ability to transition into a software-focused company came into doubt when its revenue tumbled 4% in the fourth quarter of 2017, forcing it to miss earnings estimates.

Things have since turned around, as Cisco posted $11.2 billion in net income on $49.3 billion in revenue in its last fiscal year. This billion-dollar contract should give the company an added boost.