Cisco Systems Inc. Chief Executive Officer John Chambers affirmed the company’s long-term revenue growth target of 5 percent to 7 percent as he expands software and services to lessen reliance on routers and switches.

Cisco (Nasdaq: CSCO) at the same time wants to become the “No. 1” supplier of information technology to big businesses by broadening its offerings of services and software.

But when Cisco says “No. 1 IT company,” it doesn’t mean that it’s going to be the biggest-selling company. That goal is out of reach, as IBM Corp. outsells Cisco 2-to-1.

Rather, Chambers says he wants the company to loom largest in the minds of its customers and to be the one setting the pace in the industry. Being No. 1, he says, means having the best customer satisfaction and the best profit margins for products.

Cisco, the world’s largest maker of computer networking equipment, is looking for new markets amid intensifying competition from rivals such as Juniper Networks Inc., Hewlett- Packard Co. and Arista Networks Inc. A central part of that effort has been the acquisition of software and services companies with strong recurring sales and profit margins.

Services will become a bigger part of Cisco’s revenue, reaching 25 percent of sales, Chambers said today at a financial analysts’ conference in New York. Services accounted for 21 percent of Cisco’s $46.1 billion in revenue in the last fiscal year. Cisco still intends to double its software revenue as well, Chambers said, reaffirming an earlier target.

“We’ve gone too long without any major M&A,” Chambers said. “We got too slow. You’re going to see us be quicker.”

Cisco announced on Nov. 18 it agreed to pay $1.2 billion for Meraki Inc., which makes tools to manage Wi-Fi networks and security. In July, Cisco acquired NDS Group Ltd., which makes software for cable set-top boxes, for about $5 billion.

Both companies give Cisco technologies for making networks more intelligent, whether they’re detecting fraud and protecting video content, or giving corporate technology managers an easier way to configure their systems.

“Tomorrow Starts Here” Ad Campaign

The strategy statement, articulated Friday at a presentation for Wall Street analysts, follows some lean years that have seen Cisco retrench from even broader goals, which included trying to establish itself as a consumer brand and buying a maker of camcorders. The new direction will be supported by a global advertising campaign with the slogan “Tomorrow starts here.” The ad campaign starts Monday.

“The play sounds a lot like the IBM story,” Raymond James analyst Simon Leopold said. After the maker of mainframe computers struggled in the 1980s with the rise of cheap microprocessors and rapid changes in the industry, IBM successfully transformed itself into a company that combined consulting services, software and hardware.

The new playbook comes as Chambers, who is 63 and one of the longest-serving CEOs in Silicon Valley, is nearing retirement and looking for a successor.

Chambers told analysts that Cisco pulls in about $6 billion from software per year and plans to double that in the next three to five years. That’s not a figure the company usually breaks out, as most of its software is deeply integrated into hardware such as routers and switches, which shunt data through networks.

Analysts at the meeting were unsure how to incorporate the figure into their models, and the company didn’t give a lot of specifics on how it hoped to achieve that.

Analysts also questioned how Cisco hopes to be the top player when it doesn’t sell the massive storage arrays that big companies need for their data. Chambers said Cisco will keep partnering with companies that do sell storage products, including IBM and EMC Corp.

Apart from IBM, Cisco’s chief competitors for the “No. 1 IT” throne are Microsoft Corp., Oracle Corp., SAG AG and Hewlett-Packard Co. Cisco partners closely with them, except for HP.

Strategy Overhaul

Cisco’s expansion comes as the company is recovering from an earlier expansion into consumer technologies that backfired. Market-share erosion and falling profit margins led to cuts. Chambers is pushing for faster decision-making, and has eliminated 7,800 jobs over the past year and a half, while closing businesses such as the Flip video-camera unit.

Analysts predict sales growth of about 6 percent in 2013, 2014 and 2015, according to estimates compiled by Bloomberg. Cisco cut its own long-term sales-growth target last year to 5 to 7 percent, from an earlier projection of 12 to 17 percent. The company said today it would stick with the revised target.

Shares of the San Jose, California-based company rose 1 percent to $19.28 at 12:37 p.m. in New York. The shares are up 6.7 percent so far this year.

Cisco operates its largest campus outside its California headquarters in RTP.

[CISCO ARCHIVE: Check out 10 years of Cisco stories as reported in WRAL Tech Wire.]

(The AP and Bloomberg contributed to this report.)