More on FBR's downgrades of Cisco (CSCO -3.5%) and Juniper (JNPR -3.3%): the firm sees the...

More on FBR's downgrades of Cisco (CSCO -3.5%) and Juniper (JNPR -3.3%): the firm sees the adoption of software-defined networking (SDN) leading to a 40% reduction in switch/router ports deployed by service providers/large enterprises over the next 18-36 months. Though SDN can improve network efficiency, that forecast is more aggressive than most. Also, like others, FBR sees SDN adoption driving sales of commodity, low-margin switches at the expense of Cisco/Juniper's proprietary gear. Cisco is trying to respond to the threat with an SDN platform that requires plenty of software licenses. (Juniper's strategy)

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Comments (8)
  • David White
    , contributor
    Comments (5141) | Send Message
    Enterprise customers are famously conservative. No software is as fast as good hardware. Plus it is always a good idea to have extra hardware rather than to be near a limit. I am sure SDN will have a place, but this should not immediately cut down dramatically on CSCO hardware sold. Those who try to cut their "real" ports to the bone will likely regret their decisions.
    21 Mar 2013, 11:00 AM Reply Like
  • Arnold Layne
    , contributor
    Comments (73) | Send Message
    I don't see SDN having a large effect on core router sales, which is JNPR's bread and butter.
    21 Mar 2013, 11:13 AM Reply Like
  • thatsthetruthofit
    , contributor
    Comments (98) | Send Message
    Cisco likes to keep that core network as thick as possible, layers on layers. More ports, more ports, more ports. Customers are tired of the expense and there are better options.
    21 Mar 2013, 11:17 AM Reply Like
  • mooseye
    , contributor
    Comments (78) | Send Message
    Even if it does, Cisco is positioned to take advantage of new trends and way ahead of the public thinking, and they are preparing for change with their diversified acquisitions.
    21 Mar 2013, 11:56 AM Reply Like
  • mooseye
    , contributor
    Comments (78) | Send Message
    One more point,
    If things are so bad for Cisco, as the annalists insists every time you turn around, then how do they continue to show a profit year after year, and pile up cash reserves that Lassie couldn't jump over and all the while acquire new technologies, and on top of that, pay a nice dividend?
    21 Mar 2013, 03:31 PM Reply Like
  • vallies
    , contributor
    Comments (346) | Send Message
    ORCL, Product transition. Week spot M9000 CLM. Doesn't expect Q4 to see turnaround till Q1. Operating cash flow 13.7 billion. Up from a year ago 13.5. Free cash flow record 13 billion . Share repurchases 350 million shares. Mark and Larry are sharks with big teeth. Who knows what short positions they have in this sector. Yet it does seem that IT must included Web based strategies like ADBE. ADBE is doing well because of on line add increases and they supply GOOG. SDN is the way, GOOG has Open Source, but new product cycles, like ORCL, always take time. Still EBAY,ADBE and QCOM have what it takes. Flash storage is going to be important regardless. I own CSCO and I am long. CSCO has the 1,11,111 punch in it.
    21 Mar 2013, 03:53 PM Reply Like
  • elsrmp56
    , contributor
    Comments (170) | Send Message
    Happy to add to my position today. Long term investor here, love to buy on dips of hold forever stocks (well, not forever but you know what I mean).
    21 Mar 2013, 05:22 PM Reply Like
  • mooseye
    , contributor
    Comments (78) | Send Message
    I hear you!
    Cisco could close the doors tomorrow and I would still die before they sorted out all the cash.
    21 Mar 2013, 10:29 PM Reply Like
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