Light Reading

Cisco: Cautious but Confident

Ray Le Maistre
Repost This

Cisco came out fighting at its financial analyst conference Thursday, talking up its strengths and prospects as it tempered its sales growth prospects by a few percentage points.

The vendor shocked the industry recently when it reported slightly disappointing fiscal first quarter numbers and issued a profits warning for its fiscal second quarter, which ends in January 2014. (See Cisco Set for Sales Slump.)

Cisco Systems Inc. CFO Frank Calderoni told the conference that the numbers were "clearly not acceptable," and were the result of business pressures in emerging markets, the impact of product transitions as new platforms were brought to market, and "some challenges in the service provider market."

Those cumulative challenges and macro economic conditions have forced Cisco to revamp its sales growth predictions for the next few years from 5% to 7% compound annual growth rate (CAGR) to 3% to 6% CAGR over the next three to five years.

Does that mean other vendors will also feel general pressures in the same way? Cisco tends to think so but that view is not shared by everyone. CEO John Chambers "says that the company sees macro trends, both positive and negative, one to two quarters before its competitors. We do not necessarily agree," stated MKM Partners analyst Mike Genovese in a research note, noting that other vendors such as Alcatel-Lucent, Ciena Corp. (NYSE: CIEN), and Juniper Networks Inc. appear to be faring better in emerging markets.

Cisco, though, is still expecting growth, and Chambers is confident that service providers have faith in Cisco to deliver what they need to counter their major challenges, many of which are around operating expenses. "The takeaway here is, this market is set up for us -- it will be an architectural play," noted Chambers.

That "architectural play" hinges around Cisco's take on software-defined networking (SDN) and its new routing platforms. (See Cisco Asks the Killer SDN Question, Cisco's ACI Gets Physical With SDN, and Cisco Unveils Application-Centric Infrastructure.)

And it's clear that Chambers, at least publicly, believes a hard push on the capabilities of its new products means Cisco will not lose out to its rivals. He told the conference that Cisco wasn't trying to be a systems integrator or trying to "separate the data plane from the control plane," but instead focusing on how to help network operators deliver applications and services. "Are you going to bet your future on a Juniper or Alcatel or Huawei? That's a battle we should win almost every time," stated the CEO.

— Ray Le Maistre, Editor-in-Chief, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
User Rank: Blogger
12/14/2013 | 10:14:48 AM
It's not just us, really.. what Cisco is saying. Analyst don't agree We'll know the next couple months--as others report Q4 2013 earnings--how right or wrong they are.
sam masud
sam masud,
User Rank: Light Sabre
12/13/2013 | 3:51:28 PM
Sounds like sales/marketing hype from Mr. Chambers, who understandably has to defend Cisco's switch-router business or lose some serious revenue. At the same time, while it's too early to say how how SDN will play out, there is a clear logic to disaggregating the forwarding and control planes. Add to that bare metal swiches and a Linux OS, and you have a strong capex proposition and a more competitive environment. The times seem to be changing...
Flash Poll
LRTV Custom TV
Optimizing SDN & NFV Architectures Through Application Awareness

4|23|14   |   6:24   |   (0) comments

Jerome Tollet, CTO at Qosmos, explains how network equipment vendors and operators deploying SDN and NFV can take advantage of network intelligence delivered by DPI to strengthen products and services.
LRTV Custom TV
Wind River Demonstrates Carrier-Grade Software for NFV

4|22|14   |   5:00   |   (0) comments

Wind River VP of Product Management, Glenn Seiler, takes a look the industry's first and only complete NFV software platform designed specifically for the unique carrier-grade and high-performance needs of telecom networks.
LRTV Documentaries
Cable Eyes Big Technology Shifts

4|16|14   |   03:02   |   (4) comments

US cable engineers are facing a lot of heavy lifting in the coming years, notes Light Reading Cable/Video Practice Leader Alan Breznick.
LRTV Custom TV
Maximizing Customer Experience & Assuring Service Delivery in an IP World

4|15|14   |   4:57   |   (0) comments

Steven Shalita, VP of Marketing, NetScout Systems, Inc., discusses the challenges cable/MSO operators face in assuring the delivery of new IP-based services. Key points include the value of proactively managing performance, and using rich analytics and operational intelligence to better understand service and usage trends, make smarter business decisions and ...
LRTV Documentaries
Bye-Bye DVD: Consumers Embrace Digital Video

4|10|14   |   04:17   |   (7) comments

Veteran video analyst Colin Dixon, founder and principal analyst of nScreenMedia, says research shows 56% are using digital video already.
LRTV Documentaries
Video: TW Cable Puts Multicast Gateways to the Test

4|8|14   |   04:13   |   (1) comment

Tom Gonder, a chief architect at Time Warner Cable, explains how its trial of multicast gateways is impacting IP-based video plans.
LRTV Custom TV
Managing & Monetizing Big Data in Operator Environments

4|7|14   |     |   (1) comment

At Mobile World Congress, Gigamon's Director of Service Provider Solutions, Andy Huckridge, and Heavy Reading Analyst Sarah Wallace discuss the 'big data' issues facing carriers and operators today.
LRTV Huawei Video Resource Center
Data Center Energy – Build Your Data Center in a Modular Way

4|7|14   |   2:13   |   (0) comments

Dr. Fang Liangzhou, VP Network Energy Product Line, shared his thoughts about the challenges for data centers during CeBIT 2014.
LRTV Huawei Video Resource Center
Agile Network Solution – An Overview of Huawei's Agile Network Solution

4|7|14   |   2:31   |   (0) comments

Ajay Gupta, Director of Product Marketing, Networking Product Line, gives an overview of the Agile Network Solutions during CeBIT 2014.
LRTV Huawei Video Resource Center
Huawei’s eLTE Voice Trunking, Video and Data Applied for Railways

4|7|14   |   1:38   |   (0) comments

Gottfried Winter is the Sales Director at Funkwerk, a German specialist in GSM-r terminals and a long-time partner of Huawei. At CeBIT 2014, Winter talks to Light Reading about this partnership and the integration of enhanced voice trunking, video and data functions.
LRTV Huawei Video Resource Center
LeaseWeb Speaks Highly of Huawei's Datacenter Products

4|7|14   |   1:37   |   (0) comments

Rene Olde Olthof, Operations Director LeaseWeb, talks about the next data center transformation during CeBIT 2014.
LRTV Documentaries
Comcast: Reshaping the Cable Network Architecture

4|3|14   |   07:11   |   (8) comments

Shamim Akhtar, Comcast's architect and senior director of network strategy, explains why the cable company is moving to a more distributed network architecture.
Hot Topics
WhatsApp Threatens Carrier VoLTE
Sarah Reedy, Senior Editor, 4/18/2014
The Hungry, Hungry Cloud
Dan Jones, Mobile Editor, 4/22/2014
Who's Ready to Play Broadband?
Carol Wilson, Editor-at-large, 4/21/2014
FCC's 'Middle Ground' Already Under Attack
Carol Wilson, Editor-at-large, 4/24/2014
AT&T Gets 81% of Subs Off Unlimited Data
Sarah Reedy, Senior Editor, 4/22/2014
Like Us on Facebook
Twitter Feed