1. 16254_08_2002 © 2002, Cisco Systems, Inc. All rights reserved. Cisco’s Security Vision Mario Mazzola Chief Development Officer August 29, 2002

2. © 2002, Cisco Systems, Inc. All rights reserved. 26254_08_2002 Security Market Opportunity Worldwide Source: IDC, 12/01 $0 $10,000 $20,000 $30,000 $40,000 $50,000 200020012002200320042005 Services Hardware Software $M 2000-2005 27% CAGR $46B Security and VPN

3. © 2002, Cisco Systems, Inc. All rights reserved. 36254_08_2002 Security: Network Transformation Remote Site Leased Line PSTN Frame Relay X.25 Closed Network Circa 1995 PSTN

4. © 2002, Cisco Systems, Inc. All rights reserved. 46254_08_2002 Security: Network Transformation Open Network Circa 2001 Partner Site Remote Site Internet Internet-Based Extranet (VPN) Internet-Based Intranet (VPN) PSTN Service Provider

5. © 2002, Cisco Systems, Inc. All rights reserved. 56254_08_2002 0 20 40 60 80 100 120 140 160 199920002001 Not Reported to Law Enforcement Reported to Law Enforcement Security Breaches CAGR 39% CAGR 130% Thousands of Incidents Source: Computerworld 2002, CSI/FBI Computer Crime and Security Survey 2001 10 21 53 49 63 94

6. © 2002, Cisco Systems, Inc. All rights reserved. 66254_08_2002 Requires defense-in-depth Requires multiple components Integration into e-business infrastructure Requires comprehensive blueprint Security Critical Enabler for E-Business Supply Chain Management E-Commerce E-Learning Workforce Optimization Customer Care

7. © 2002, Cisco Systems, Inc. All rights reserved. 76254_08_2002 Network Security Components Identity Secure Connectivity Secure Connectivity Perimeter Security Perimeter Security Intrusion Protection Intrusion Protection Security Management Security Management Authentication Firewalls VPN Policy Intrusion Detection

8. © 2002, Cisco Systems, Inc. All rights reserved. 86254_08_2002 Key Directions in Network Security Integration—into network infrastructure Inter-linkage—across components Secure extensions—wireless and voice Integration—into network infrastructure Inter-linkage—across components Secure extensions—wireless and voice Identity Secure Connectivity Secure Connectivity Perimeter Security Perimeter Security Intrusion Protection Intrusion Protection Security Management Security Management Authentication Firewalls VPN Policy Intrusion Detection

9. © 2002, Cisco Systems, Inc. All rights reserved. 96254_08_2002 There’s No Longer a Question of Need The Question Is How To Secure # of Organizations Reporting Breaches % Suffering Breaches Average Days Lost / Year Average US$ Lost / Year Highest Reported US$ Lost / Year Virus Incident 39061%68$162,000$10,000,000 Email Intrusion (eg Spamming) 18329%12$16,000$200,000 Loss of s/w 1021619$104,000$3,000,000 Website Intrusion (eg Hacking) 791284$32,000$200,000 Critical System Failure 791280$155,000$4,000,000 Loss of Confidential Data 35518$197,000$1,500,000 Tampering on I/O 23414$14,000$100,000 Source: KPMG 2002 Information Security Survey

10. © 2002, Cisco Systems, Inc. All rights reserved. 106254_08_2002 Performance Evolutionary Infrastructure Intelligent Services Our Technology Strategy Three Components - No Compromises

11. © 2002, Cisco Systems, Inc. All rights reserved. 116254_08_2002 Cisco’s Security Vision Intelligent Services Security Intelligent Services Security Performance Line Rate Performance Line Rate Evolutionary Infrastructure Integrated Evolutionary Infrastructure Integrated Secure the network fabric with increased intelligence that preserves and protects network integrity and value for our customers

12. © 2002, Cisco Systems, Inc. All rights reserved. 126254_08_2002 Customer / Market Context – Short / Medium Term Customer familiarity with security appliances and anti-virus software (applied at access points to network) Employee awareness is critical to maintaining security Strong competitive pressure for market share leadership Piece-meal approach to security Only 30% have evaluated ROI for IT security expenditures (Source: Price Waterhouse Coopers, Information Security Breaches Survey 2002) Customer familiarity with security appliances and anti-virus software (applied at access points to network) Employee awareness is critical to maintaining security Strong competitive pressure for market share leadership Piece-meal approach to security Only 30% have evaluated ROI for IT security expenditures (Source: Price Waterhouse Coopers, Information Security Breaches Survey 2002)

13. © 2002, Cisco Systems, Inc. All rights reserved. 136254_08_2002 Customer / Market Context – Long Term Increasing sophistication of - and changing - threats from both external and internal sources Increasing appliance competition Holistic security approach needed Increasing business impact and cost of network outages as connectivity and mobility increases Increasing sophistication of - and changing - threats from both external and internal sources Increasing appliance competition Holistic security approach needed Increasing business impact and cost of network outages as connectivity and mobility increases 60% of organizations expect to experience greater vulnerability as connectivity increases Source: Ernst & Young, Information and Security Survey 2002 60% of organizations expect to experience greater vulnerability as connectivity increases Source: Ernst & Young, Information and Security Survey 2002

14. © 2002, Cisco Systems, Inc. All rights reserved. 146254_08_2002 Cisco’s Security Strategy – Short / Medium Term Components: Reinforce SAFE (a system-based approach to security and VPN design) Develop competitive appliances and security systems that increase our market share and combat the competition Continue to drive ROI for prevention of security breaches Build holistic security approach, i.e. pervasive network security Components: Reinforce SAFE (a system-based approach to security and VPN design) Develop competitive appliances and security systems that increase our market share and combat the competition Continue to drive ROI for prevention of security breaches Build holistic security approach, i.e. pervasive network security

15. © 2002, Cisco Systems, Inc. All rights reserved. 156254_08_2002 Cisco Security Strategy – Long Term Components: Framework for all Cisco products, not limited to any particular product line Devices included: switches, routers, phones, gateways, wireless devices Hop-2-hop protection that maintains value proposition of network Components: Framework for all Cisco products, not limited to any particular product line Devices included: switches, routers, phones, gateways, wireless devices Hop-2-hop protection that maintains value proposition of network

16. © 2002, Cisco Systems, Inc. All rights reserved. 166254_08_2002 Benefits of Long Term Strategy Protects existing network services, including QoS, NBAR, CBAC Incremental deployment is supported The solution may be enabled on a port by port basis Legacy devices can be accommodated through access policies Protects existing network services, including QoS, NBAR, CBAC Incremental deployment is supported The solution may be enabled on a port by port basis Legacy devices can be accommodated through access policies

17. © 2002, Cisco Systems, Inc. All rights reserved. 176254_08_2002 SAFE Establishes Framework Blueprint for Integrated Network Security Application and Services Integration Network Infrastructure Network Infrastructure SAFE Provides a Defense-in-Depth Approach to Security Services SAFE Enables Integration of Security Services into the Network Infrastructure SAFE Integrates Security with Intelligent “Network” Services SAFE is Delivered though Appliances and Integrated Security within Routers & Switches SAFE Expanded to Include Catalyst 6500 Series SAFE Provides a Defense-in-Depth Approach to Security Services SAFE Enables Integration of Security Services into the Network Infrastructure SAFE Integrates Security with Intelligent “Network” Services SAFE is Delivered though Appliances and Integrated Security within Routers & Switches SAFE Expanded to Include Catalyst 6500 Series Security Management & Monitoring Intrusion Detection & Protection Secure Connectivity Secure Connectivity Extended Perimeter Security Extended Perimeter Security Identity Services

18. © 2002, Cisco Systems, Inc. All rights reserved. 186254_08_2002 Next Critical Steps Short / Medium Term Increase momentum and market share leadership in networking security space Quickly deliver additional competitive offering Clearly articulate the SAFE Blueprint story and vision for pervasive security Increase momentum and market share leadership in networking security space Quickly deliver additional competitive offering Clearly articulate the SAFE Blueprint story and vision for pervasive security

19. © 2002, Cisco Systems, Inc. All rights reserved. 196254_08_2002 In Summary We must continue to set the industry standard for network security and translate our technology leadership and innovation into customer value We must continue to set the industry standard for network security and translate our technology leadership and innovation into customer value