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Cisco CEO: Software, Services Help Boost Sales In Midst Of 'Challenging' Macro Climate

Cisco's software subscriptions now account for 71 percent of its total software revenue. Cisco's software and services-focused pivot is helping the giant overcome a difficult macroeconomic environment, Cisco CEO Chuck Robbins said on Wednesday.


Cisco Systems said it faced macroeconomic pressure during its latest quarter but it’s confident that the impact will lighten as Cisco leans on its software-first business model. Even so, the San Jose, Calif.-based vendor expects sales in its fiscal second quarter to decline by 3 to 5 percent from the same period a year before.

Cisco's Q1 2020 software subscriptions now account for 71 percent of its total software revenue, a figure that is up 12 points year over year. Cisco over the past year has refreshed its entire switching, routing, and wireless portfolio, which now is entirely sold through a subscription model, an effort that is "going exactly as planned," CEO Chuck Robbins said during Cisco's quarterly earnings call on Wednesday afternoon.

"One of the big things they want to do is continue the transition toward the software model. They had 30 years of a net 30 CapEx model, so they are in the midst of that transition and are making progress on a timeline they expected -- that's the biggest strategic thing I think that they can do," Robbins said.

From a portfolio perspective, the tech giant wants to help its partners and customers capitalize on cloud, automation, 5G, security and collaboration, he added. "Clearly, they have a lot of customers that are still buying a lot of stuff, so while there is a slowdown, there's still meaningful value their customers are seeing with their technology."

[Related: Cisco CEO Chuck Robbins On The 'Incredibly Powerful' DevNet Platform, SMB, And As-A-Service Opportunities]

Cisco's Robbins said that the company delivered solid performance despite a “challenging” macro environment, citing the U.S.-China trade war as one issue. For the company's first quarter of 2020 that ended on Oct. 31, 2019, Cisco's revenue rose 2 percent to $13.16 billion from $13.07 billion in the year-ago quarter, with products accounting for $9.88 billion and services at $3.28 billion.

Cisco's Infrastructure segment, which includes the core switching and routing businesses as well as wireless and data center products, decreased by 1 percent during the quarter to $7.54 billion. Despite the slight decline, every business within the Infrastructure segment was up except routing, which was down due to weakness in the service provider business, said Kelly Kramer, Cisco's executive vice president and CFO.

Robbins during the company's last earnings call in August said that Cisco had started to see early indications of macro impact, which kicked in during the company's first quarter of 2020. Specifically, the service provider segment dropped 13 percent during the quarter. Cisco’s revenue in China was down 31 percent during the quarter, Kramer said.

"[The macro impact at the end of Q4 2019] they saw basically continued. The entire quarter was worse than they expected when they began,” Robbins said, citing softness across several technology areas and segments, including enterprise commercial and service provider and emerging markets. "We have effectively assumed that it will stay as is … they haven't modeled any further deterioration or improvement."

While service providers are currently focused on building out consumer based 5G services, Cisco believes the service provider segment will Improve when the carriers turn to Cisco for help building out their 5G enterprise networks that will require higher throughput for more traffic, which will likely happen by the end of 2021, Robbins said.

The firm’s security segment continued to be a bright spot, posting double-digit growth during the first quarter of 2020. The Security business, which Robbins said is resonating with customers right now, rose 22 percent in the quarter to $815 million.

"Security is at the heart of everything they do. It's deeply integrated into the fabric of their portfolio," he said. "As the leader in zero-trust, their customers are increasingly turning to us to extend simple, and trusted access to their users in hybrid and multi-cloud environments. This is leading to a strong uptick in Duo, their identity access management solution."

The company's Applications business segment, which includes AppDynamics and the company's video conferencing and collaboration portfolio, rose 6 percent to $1.50 billion in revenue in Q1. Robbins told CRN last week that Cisco is investing heavily in AppDynamics and that AIops and APM represents a big opportunity for partners.

Cisco last week at its 2019 Partner Summit said that its partner route to market is at more than 85 percent and it's never been this high in the company's history.

Cisco's net income rose 5 percent to $3.61 billion during Q1 2020, up from $3.45 billion year-over-year.

During the quarter, Cisco closed its acquisition of CloudCherry, a privately held Customer Experience Management (CEM) company that will give Cisco's contact center portfolio a boost, the company said.

Cisco stock declined by 5 percent in after-hours trading on Wednesday to $46.03.

Ozempic could help curb alcohol abuse, study reveals

The latest weight loss craze could also help people control their drinking.

Semaglutide treatments such as Ozempic and Wegovy have been shown to reduce the symptoms of alcohol use disorder (AUD), according to a study published in The Journal of Clinical Psychiatry on Nov. 27.

The collaborative study from The University of Oklahoma (OU) and Oklahoma State University (OSU) found a “significant and noteworthy decrease” in the Alcohol Use Disorders Identification Test (AUDIT) scores of six patients who were receiving semaglutide treatment for weight loss.

Lead study author Dr. Jesse Richards, director of obesity medicine and assistant professor of medicine at the OU-TU School of Community Medicine, said the study was inspired by his conversation with Dr. Kyle Simmons, professor of pharmacology and physiology at the OSU Center for Health Sciences.

“I had been hearing from a significant number of patients that their alcohol intake was spontaneously decreasing while [they were] on the medication,” Richards told Fox News Digital.

As a bariatric surgery clinic employee, Richards noted that it’s standard to screen patients for alcohol use.

Studies found that there was a decrease in Alcohol Use Disorders Identification Test (AUDIT) scores for six patients receiving weight-loss treatments. AP

At the clinic, a number of patients tested positive for alcohol consumption, sometimes in concerning amounts.

Later, while on semaglutide medication, they reported reduced alcohol intake.

One of Richards’ patients — who previously drank large amounts of alcohol — shared a new inability to drink more than two cans of beer now because it “just doesn’t sound good.”

After semaglutide medication, a patient who formerly drank beer regularly began to think that alcohol just didn’t “sound good.” Getty Images

This response piqued Richards’ interest in learning more about patients’ aversion to alcohol, which directly correlated to his research.

Research has shown that this effect is “mediated through adjustments in the reward pathway in the brain,” he said.

“The GLP-1s are actually modifying dopamine, decreasing the craving and decreasing the motivation to acquire things in that compulsive intake category.”

The most surprising takeaway from the study, Richards said, was that the same significant treatment response was seen even at very low doses.

“We found that even patients on the lowest dose of semaglutide — a quarter milligram — had a quite significant and relatively … quick onset reduction in alcohol intake,” he said.

Of the six patients studied, all but one were on low doses — from a quarter to a half milligram.

“And that’s very encouraging because they know that the lower doses of these medications are tolerated much better,” said Richards.

While the results seem promising, the doctor said he does not recommend that patients use semaglutide treatments for alcohol use disorder at this time, due to supply and safety issues.

“If patients have [obesity and diabetes] indications for the medication and they also struggle with alcohol intake … having them on this treatment may potentially be beneficial,” Richards said.

Due to medication shortages and a lack of long-term data, it may not be advisable to take Ozempic to target alcoholism specifically. NurPhoto via Getty Images

“But because there has been a global medication shortage, and because they don’t have prospective trials and don’t know what the specific safety is versus the well-established safety data in obesity and diabetes, [I] would not recommend it just for patients who have AUD.”

There are three FDA-approved drugs available for alcoholic use disorder that are currently underused, the doctor noted.

Given that five million people in the U.S. are currently taking semaglutide medications, if it is proven that those drugs have a significant effect on alcohol use disorder, “by default, they are going to become the most widely used drug to Improve these symptoms — just by virtue of the fact that so many people are on them for diabetes or obesity,” Richards noted.

Trials are underway to gather more information on the weight-loss medication and its effect on alcohol intake. UCG/Universal Images Group via G

He confirmed that additional research is underway with two ongoing trials.

“Since they were able to show clinically meaningful reductions in alcohol intake and AUD symptomatology in a real-world setting, that bodes very well for these types of medications,” he said.

Looking ahead, Richard said there is a need for higher-quality evidence of the medication’s impact on AUD compared to placebo drugs or environmental factors.

People struggling with alcohol use should speak with their healthcare provider. Getty Images

Even though it’s unclear whether GLP-1 producers will market the medication to AUD patients in the future, Richards said this could become an “established medical practice once the safety and efficacy has been determined.”

For patients who struggle with AUD, Richards recommended they talk to their health care providers about available treatment.

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He also alerted patients that if they experience a reduced appetite and usually consume “a bunch of calories” in alcohol, it may be necessary to look into a more balanced diet.

Avantika Waring, 9amHealth’s chief medical officer and a trained physician and endocrinologist in San Francisco, applauded the OU and OSU study findings for further supporting what clinicians “are already seeing in practice,” she told Fox News Digital.

“GLP-1 medications have a lot of effects that they are still learning about, and the ability to decrease cravings and the reward signals related to alcohol use are just some of the benefits,” she said.

“It’s an important starting point for further clinical trials,” she added.

Waring also warned that GLP-1 medications should not be used to treat AUD specifically, as they can cause side effects such as nausea and changes in appetite.

“People struggling with alcohol use disorder should consult with their physicians before starting GLP-1 medications to make sure that they can stay hydrated and safe on therapy,” she said.

Waring noted that if ongoing clinical trials find semaglutide treatments to be effective for AUD, the medical community will “have another tool to help people living with alcohol addiction and we’ll see expanded use of these already popular drugs.”

Fox News Digital reached out to Novo Nordisk for comment on the potential link between semaglutide medications and alcohol use disorder.

How Crying Can Help You, Here Is What A Study Says


They say that there's no sense in crying over spilled milk. But what do they know? Crying can get you another glass of milk if you do it loud enough. Plus, crying may serve a real physiologic purpose, according to a study published recently in Emotion, meaning the journal and not in an Emo-kind of way.

For the study, three researchers from the University of Queensland (Leah S. Sharman, Genevieve A. Dingle, and Eric J. Vanman) and one from Tilberg University (Ad J. J. M. Vingerhoets) recruited 197 female undergraduate students. They said that they choose all women rather than including men because pilot testing of sad videos had revealed that more women than men cried or at least more women revealed that they were crying. This did not account for the men who cried inside or used some bro-language or high fives to hide the crying.

The research team then showed each of the study participants either a video that are supposed to make them feel sad (sad videos) or a video that was not supposed to elicit any emotion (neutral videos) like something from a documentary or a ted talk. Each video lasted for close to 18 minutes. After the video, the researchers noted whether or not each participant had cried while watching the video. Ultimately, 65 participants watched the neutral video, 71 watched the sad video and cried during it, and 61 watched the sad video and did not cry. Presumably, no one cried during the neutral video. But then again, actor Bryce Dallas Howard was able to cry when Conan O'Brien talked about Home Depot in this Conan clip:

Then, each participant underwent a Cold Pressor Stress Test (CPT), which involved placing the participant's left hand, up to the wrist, in cold 0° to 5°C water. Unless you are the Iceman or Killer Frost, this is supposed to be painful. The research team measured how long each participant could stay in this position until pulling her hand out of the water. During the study, the research team continuously measured each participant's heart rate and respiratory rate and periodically measured cortisol levels from saliva samples. Cortisol is a stress-hormone that's produced by the body.

Also, at four points during the study, participants answered questions from the Positive and Negative Affect Scale short form (PANAS). These questions asked the degree to which the participant was experiencing ten different emotions and to rank each on a five-point scale that ranged from a one (very slightly or not at all) to a five (extremely).

When it came to cortisol levels and how long the participants could keep their hands submerged in the cold water, the study ended up finding not much difference between the neutral video watchers, the sad video non-criers, and the sad video criers. So if you are about to dunk yourself in cold water or take a cold shower, it may not help to cry first.

But here's a difference that the study found. Are you ready? Take a deep breath. The difference was breathing rates. While watching the videos, the non-criers tended to have elevations in their breathing rates, whereas, by contrast, the criers tended to maintain their initial breathing rates. In other words, tearing up could have helped participants better control their breathing rates. This provides further evidence that crying may help you better regulate arousal, serving as an emotional release.

Another interesting finding was that right before crying, participants tended to experience decreases in their heart rates, seemingly in anticipation of the crying. Once the crying began, their heart rates then tended to creep back up but not above where their heart rates had been before everything began. This may be further evidence that crying has a beneficial regulatory effect on your physiology.

So perhaps next time you start crying you can tell people that you are regulating your physiology. You've probably heard of people saying that they had a good cry and feel better after they've let the tears flow. It can be important to find reasonable ways to periodically release your emotions. Otherwise, you may end up bottling everything up like a hot air balloon that can explode when you least expect it.

Moreover, crying can be a way of communicating. It's really the only way that babies can express their needs before they learn how to say things like "why you throwing shade on me," or "I'm not Gucci." Crying can help communicate to others that you need more sympathy, comfort, or help. Of course, this can be misused. You don't want to cry every time your order at a restaurant doesn't come out right. And of course, there is the whole concept of crocodile tears: people crying to get something when they don't really mean it.

Crying can also be a way of communicating with yourself. Even when you cry alone, you may be telling yourself about your own state because, like many people, you could be terrible at reading your own emotions and situation. Tears could be your body's way of saying, "hey, take a break," or "something's not right," or "take care of yourself." Tearing up can then be a way of your body literally crying out to you.

Your body is a complex system. Crying can be complex. Your tears can flow when you are very sad, very angry, or even very happy. Better understanding what causes us to cry and what happens as a result could help us better handle their emotions and stress.


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