In the past, when Cisco Systems (CSCO) had a new report on its earnings or hosted its Cisco Live gathering, investors would clamor about it. It was one of the hottest tickets on the market, and investors couldn't wait to hear what the company was coming out with, or how it had done with its products in the past quarter. But that has all changed now as the Internet-infrastructure business is not one of the top companies on the stock market anymore.
In recent years, Cisco stock has dropped by 20% and it has continued to drop recently as compared to its competitors. This internet-system giant, which was once catering to the internet needs of the companies worldwide, has experienced a decline in demands over the years. Yet, recent developments should instill some faith in this one great stock, and I expect Cisco to stay strong in its industry for the near future.
Cisco used its Cisco Live platform recently to announce its own Open Network Environment (ONE) that will serve as the company's software defined network (SDN). This is a big step, as SDN's are currently a big craze in the industry. If Cisco's ONE can be successful, it'll carry Cisco into a new generation of networking, and keep its name hoisted high with the other innovators.
This all comes on the heels of some other items which may buoy Cisco stock into a higher range. To strengthen its demand in the workplace, Cisco Systems announced last March some improvements on its Jabber IM. For those who are not aware, Jabber is an instant messaging software very similar to Yahoo Messenger. This application can be downloaded online without any charge and can be used on PCs, laptops or smart phones.
And just recently, the Jabber will be upgraded to run on Apple's (AAPL) iPad. This will allow users to use the tablet to chat, make voice and video calls and to conference. Moreover, Microsoft (MSFT) has also collaborated with Cisco Systems for its Jabber product. The Windows version features the same capabilities of OS such as desktop sharing and web conferencing to name a few. This powerful application is predicted to drive more earnings to Cisco when it is released this year or the following year.
This aligns itself perfectly with Chamber's feeling that Cisco needs to focus on collaborations to drive success. His keynote address focused on this point, as well as expanding Cisco's presence in mobile and social technology.
But this is not the only product that has been creating buzz for Cisco as it tries hard to stay relevant and competitive in the tough market. The company has also made some upgrades to its TX9000. This futuristic product has put the "in-person" collaboration to the next level. With this, companies no longer need to travel to their branches abroad to conduct meeting or even trainings. This has three 65-inch screens that are positioned in such a way that foster the feeling of being in just one room despite seeing the other person or people on wide screens.
This telepresence system also does not consume high bandwidth despite being able to produce a video that has high quality. The product can be used by six people all at the same time. This new upgrade has improved screens, reducing glare and the screens can also be mounted on the wall or free standing. As for the price, this new version is quite affordable. In fact, this product has gained tons of positive reviews not only for its features but for its amazing prices too. More and more companies are starting to use this now to cut back on their travel and other expenses. Cisco may once again, become the first name on the lips of businesses for their technology needs.
Of course, the competition doesn't want to see that happen and was all too glad to see Cisco slip in the early part of this year and last year.
Competitor Alcatel-Lucent (ALU) has been up and down for the past few years, though 2011 was a successful year. Still, the French company has struggled to establish a stream for consistent growth and shareholders have demanded that CEO Ben Verwaayen change things in order to put the company securely in the black. At the last shareholders meeting, new pressure was put on the CEO for the stagnation that Alcatel-Lucent has experienced. The company has begun working out new deals to expand its presence in Asia and Europe, including securing an agreement with Telenor ASA to begin opening some Alcatel-Lucent stores to sell online products and digital services.
Another competitor, Juniper Networks (JNPR), is started to recover from its own slipping demand. In a show that signals some healthy growth, the company has announced that it intends to buy back some $1 billion of its own stock. The stocks were sold to help dilute any problems that the company would have with its employee stock program. Juniper makes routers and other products for wireless internet technology and hopes to establish itself in emerging markets to secure future growth. That plan will stand in Cisco's way, as it, also, hopes to do the same.
Cisco's on the up right now, make no mistake about it. Even if global demand doesn't pick up as well as the company would like, its new product line should instill some confidence in investors. As analysts have noted, the SDN progression may be the biggest thing Cisco has going for it, but it's a very big thing and Cisco's early work is enough to secure new "buy" ratings and excitement from those who may have written off the company earlier this year.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.