(Reuters) – Cisco Systems Inc (NASDAQ) fell short of Wall Street’s expectations for its first quarter revenue. This was due to a decrease in demand for network hardware on campus as more businesses shift operations to the cloud. The stock dropped nearly 6% during extended trading.

California-based firm, headquartered in San Jose has been shifting their focus to softwares such as WebEx videoconferencing and cybersecurity services. This will help clients adjust to working online.

According to industry experts, Cisco will benefit from the boom in cloud computing as well as 5G adoption. But, the industry has been hindered by supply problems such as chip shortages or shipping bottlenecks that have prevented Cisco and other companies from taking advantage of strong demand. These issues are likely to persist in the short-term.

Company forecasts second-quarter revenue growth of between 4.5% to 6.5%

The quarter’s net income rose to $3Billion, or 70c per share from $2.2Billion, or 51c per share a year ago.

For the period ended October 30, revenue was $12.90 Billion. Refinitiv data shows that analysts expected an average of $12.98 billion in revenue.