Thu, Mar. 26, 2:05 PM
- MKM's Michael Genovese is pleased with Infinera's (NASDAQ:INFN) recent unveiling of two new photonic integrated circuits (PICs) that will go into optical transport systems aimed at 100G metro networks. "PICs are the source of the company's competitive advantage in long haul, and we expect the new more flexible and granular PICs to form the basis of a compelling Metro 100G aggregation/Telecom product later this year."
- Infinera asserts its new PICs offer more flexibility by allowing capacity to be "divided at a granular optical level with each slice capable of being routed in a different direction as it exits the line card or the system housing it." One PIC (the ePIC-500) delivers 500Gbps of capacity at network hub locations, and the other (the oPIC-100) 100Gbps at network spoke locations.
- Infinera claims tests showed "an estimated average reduction of 28 percent in modules, 31 percent in power and 45 percent in bandwidth inefficiencies as compared to conventional, commercial off the shelf technologies that deliver single-wavelength or super-channel solutions for 100G, 200G or 400G."
- Genovese sees Infinera's addressable market expanding to ~$20B in 2018 from ~$5B in 2014 as it "competes in end-to-end Optical Transport including Metro and [data center infrastructure]," and as its systems handle traffic forwarding features traditionally handled by routers - the latter could pose challenges for Cisco (NASDAQ:CSCO) and Juniper (NYSE:JNPR).
- Infinera is once more within a dollar of a 52-week high of $19.48.
Tue, Mar. 24, 11:29 AM
- Like others, Stifel reports Ciena (NYSE:CIEN) and Cisco (NASDAQ:CSCO) are expected to share a huge Verizon 100G metro optical contract. However, while others have reported Cisco will get ~2/3 of the contract, Stifel's checks indicate the Cisco/Ciena split hasn't been determined; the firm believes "both vendors will start on an equal footing," and that Ciena might even get a majority of the deal.
- Ciena is expected to supply a platform that's similar to its 6500 series packet-optical (integrated Ethernet switching/optical networking) hardware, and which supports OTN switching. Stifel thinks Ciena, whose 6500 series is already used in Verizon's 100G long-haul network, could get over $100M in 2016 revenue from the metro deal. Cowen has estimated the total contract opportunity could be worth $200M-$300M over two years.
- Optical component vendor NeoPhotonics (NPTN +4%), which received 15% of its 2014 revenue from Ciena (trailing only Huawei's 38%) and has healthy 100G exposure, is also rallying. Its shares are now up 104% since a Q4 beat was posted on March 3.
- Update: Verizon has confirmed Ciena and Cisco have won the deal. No word on the split between the companies.
Wed, Mar. 18, 12:31 PM
- Polycom (PLCM +1.7%) plans to offer a line of videoconferencing products built specifically for Microsoft's (NASDAQ:MSFT) widely-used Skype for Business (until recently known as Lync) unified communications (UC) software platform.
- The first product created for the offering, the RoundTable 100, is aimed at SMBs; Polycom claims it takes "just minutes to set up and start using. In addition, Polycom's CX videoconferencing hardware line will join the RoundTable line, and its VVX business phones will support an upcoming Office 365 cloud VoIP service.
- Synergy Research just estimated Microsoft had a 13% Q4 UC collaboration market share, second only to (Polycom archrival) Cisco's (NASDAQ:CSCO) 16%. Polycom was assigned a 3% share (#5 overall). Overall, the market grew only 2% Y/Y, with declining enterprise voice and telepresence product sales offset by growing demand for hosted voice, hosted contact center, cloud UC, enterprise social networking, and enterprise presence/IM offerings.
Sat, Mar. 7, 3:26 PM
- With Intel's (NASDAQ:INTC) Grantley Xeon CPU launch and Web data center investments offsetting weak high-end server demand, IDC estimates global server revenue rose 1.9% Y/Y in Q4 to $14.5B, and Gartner estimates it rose 2.2% to $14B; those figures compares with Q3 growth estimates of 4.8% and 1.7%, respectively.
- Likewise, IDC estimates global enterprise storage revenue rose 7.2% Y/Y in Q4, aided by Web investments and healthy demand for mid-range systems featuring integrated flash. Q3 growth was pegged at 5.1%.
- IBM had a rough time its both the server and storage markets: IDC believes its storage share fell to 9% (tied for #3) from 12.7% a year earlier, and Gartner estimates its server revenue fell 14% if one excludes Big Blue's x86 server unit, which was just sold to Lenovo. After accounting for the x86 sale, IDC estimates IBM's server share was at 13.7% (#3) vs. 26.8% a year ago.
- HP (NYSE:HPQ) fared a little better: IDC has its server share falling fractionally to 26.8% (still #1 overall), and its storage share falling to 13.8% (#2) from 14.1%. The company's x86 server unit has been gaining ground against IBM's former business, but its high-end server sales remain weak.
- Cisco's (NASDAQ:CSCO) UCS server line (recently refreshed) continues to gain ground: Its share rose to 5.3% (#5) from 4.5%, with full-year revenue pegged at $2.9B. With the help of aggressive pricing and x86 growth, Dell's server share rose to 16.7% (#2) from 15.2%, while its storage share slipped to 9% (tied for #3) from 9.2%. Lenovo (OTCPK:LNVGY) claimed a 7.6% server share (#4) thanks to the IBM deal, kicking Oracle (NYSE:ORCL) out of the top-5 along the way.
- EMC, whose high-end storage sales have been pressured (mid-range/flash demand has been better), saw its storage share drop to 22.2% (still #1) from 23.1%. NetApp (NASDAQ:NTAP), which posted an FQ3 miss and light guidance last month amid tough mid-range competition from EMC and others, saw its share drop to 7.2% (#5) from 8%.
- Not surprisingly, the white-label hardware beloved by Google, Facebook, Amazon, etc. continued to take share. IDC estimates such hardware, referred to as ODM Direct, claimed server and storage shares of 8.2% and 12.8% vs. 6.4% and 9.9% a year ago.
- Sales of x86 servers, the lion's share of which run on Intel CPUs, rose 7.1% to $11.5B. Sales of non-x86 servers fell 14% to $3B, thanks to declining demand for both mainframes and UNIX servers running proprietary RISC CPUs. "Early-stage revenue" was seen for ARM (NASDAQ:ARMH) servers, largely via HP's Moonshot line.
- Other companies with strong server and/or storage exposure: STX, WDC, SMCI, MLNX, AVGO, QLGC, RHT
Thu, Mar. 5, 11:31 AM
- Zix (ZIXI +7.2%) and Cisco (CSCO - unchanged) have struck an OEM deal regarding the integration of Zix's e-mail encryption tech with a new version of Cisco's IronPort Encryption Appliance (IEA), and the inclusion of Cisco's Post X Envelope e-mail delivery method with the ZixGateway e-mail encryption appliance.
- The IEA refresh will become available in May, and the revamped ZixGateway solution in Q4. The former will include new hardware and software patches to go with Zix's technology.
- Zix has surged to new 2015 highs following the announcement. The 52-week high is $4.69.
Mon, Mar. 2, 4:12 PM
- Cisco (NASDAQ:CSCO) rose 2.2% today, and in doing so rallied above $30 for the first time since 2007. Shares are up 12% since the networking giant beat FQ2 estimates and reported 5% Y/Y product order growth on Feb. 11.
- Like telecom equipment peers, Cisco has made a flurry of announcements at the Mobile World Congress. Drawing attention: The launch of the USC 8000 small cell 4G/Wi-Fi base station line for enterprises and public venues. Vodafone is deploying the solution, which includes both access points and controllers and aims to address growing carrier interest in deploying small cells in high-traffic locales.
- Cisco has also announced: 1) Mobility IQ, a SaaS/cloud-based analytics software solution for mobile carriers that contains network monitoring, advertising, and service management tools; IBM has also shown an interest in this space. 2) A deal with AT&T through which Ma Bell will rely on Cisco's products to deliver connected car services.
Wed, Feb. 25, 3:16 PM
- Bloomberg reports HP (HPQ -10.1%) is in talks to acquire enterprise Wi-Fi hardware/software provider Aruba Networks (ARUN +22.5%), and that a deal could be announced as soon as next week. Aruba has skyrocketed on the report, and has taken rival Ruckus (RKUS +4.7%) higher with it. Aruba's market cap is now around $2.5B.
- Aruba is the enterprise Wi-Fi market's #2 player - behind Cisco (NASDAQ:CSCO), which towers over the space - and HP is also in the top-5. IDC estimates Cisco, Aruba, Ruckus, and HP respectively had Q2 2014 enterprise Wi-Fi shares of 46.8%, 11.8%, 6.2%, and 4.5%.
- HP, whose shares have plunged today due to an FQ1 revenue miss and soft guidance, saw its total networking revenue drop 11% Y/Y in FQ1 - "execution issues" in the U.S. and China were blamed. The IT giant has suggested it's open to making enterprise acquisitions ahead of its PC/printing spinoff.
Wed, Feb. 25, 12:43 PM
- As of 2012, Cisco (CSCO -0.9%) had 60 products on a Chinese government list of products approved for purchase by state entities. As of late 2014, it had none, according to Reuters' analysis of government data.
- PC/server virtualization software vendor Citrix (CTXS +0.5%) has also seen its products disappear from the list, as have Apple (NASDAQ:AAPL) and Intel's (NASDAQ:INTC) McAfee security software unit. While the total number of products on the list has risen by over 2K since 2012 (to nearly 5K), the number of approved foreign tech brands has fallen by a third.
- The data highlights the ripple effects of the 2013 NSA spying uproar, as well as China's broader interest in promoting local tech firms relative to foreign suppliers. Bloomberg reported in December the Chinese government is "aiming to purge most foreign technology from banks, the military, state-owned enterprises and key government agencies by 2020."
- Cisco's Chinese sales have already been under heavy pressure for several quarters. Thanks in part to the government's efforts, the networking giant's Chinese orders fell 19% Y/Y in the January quarter, compared with just a 1% drop for other Asia-Pac markets.
- Lenovo (OTCPK:LNVGY), ZTE (OTCPK:ZTCOY), and Huawei are among the local firms likely to benefit from the government's attempts to buy local.
Thu, Feb. 19, 1:26 PM
- Already the #2 vendor in the enterprise Ethernet switch market (behind Cisco), HP (HPQ +0.2%) is partnering with Taiwanese ODM Accton Technology and embedded Linux startup Cumulus Networks to launch a line of HP-branded white box switches (referred to as "brite-box switches") for Web-scale data centers running commodity hardware.
- Accton will manufacture the switches, and Cumulus will supply the OS they run on. Internet giants such as Google, Facebook, and Amazon have been major adopters of cheap white-box hardware, as well as of software-defined networking (SDN) architectures that allow commodity switches to be managed and provisioned by software-based controllers. Verizon is also embracing the trend, in part by deploying Cumulus' software.
- Cisco's (NASDAQ:CSCO) John Chambers has called white-box hardware his company's biggest long-term threat. Facebook, through its Open Compute Project, has helped lead the charge; last week, the social networking giant showed off a new 6-module switch design (can be used by any manufacturer that wants to).
- The partnership isn't HP's first stab at taking part in the white-box boom: Last year, the company partnered with Foxconn to provide commodity servers for Web-scale data centers.
Thu, Feb. 12, 2:00 PM
- At least six firms have upped their Cisco (CSCO +8.7%) targets in response to the company's FQ2 beat, in-line guidance, and healthy product orders. Shares are at their highest levels since 2007.
- "We came away from the call with greater confidence in Cisco's technology leadership, execution and recovery trajectory," writes Oppenheimer (Buy). "While the headwinds in emerging markets and service provider are likely to remain in place, we believe that by now they are well reflected in estimates."
- William Blair (Outperform): "While Cisco clearly benefited from easy comparisons across its business and several major product cycles, we nonetheless walked away with increased confidence in the company's business momentum, growth prospects and strategic positioning."
- Sterne Agee (Buy): "The biggest takeaway that should drive incremental support in the stock near term is the improving tone on emerging markets (India plus 11%, Mexico plus 21%) along with U.S. commercial strength up 12% against a relatively tough comp (total Americas up 7% along with EMEA up 7%)."
- Deutsche (Buy) believes Cisco businesses responsible for half of sales - data center switching, security, services, and Wi-Fi - can post growth "2x or higher" than GDP growth. Credit Suisse (Underperform) remains bearish on a belief SDN will begin having a bigger impact on Cisco's sales and margins over the next 12-18 months.
- John Chambers mentioned yesterday Cisco now has 300+ customers for its APIC SDN controller. The remarks come after VMware reported paid customer count for its rival NSX platform rose 60% Q/Q in Q4 to 400+. Facebook, meanwhile, has just revealed a new modular switch platform for its open-source Open Compute Project.
- Prior Cisco earnings coverage
Thu, Feb. 12, 11:03 AM
- Cisco (NASDAQ:CSCO) beat FQ2 estimates on the back of 8% Y/Y product growth (aided by favorable comps), offered in-line guidance (better than feared, given forex pressures), and reported a 5% increase in product orders. Enterprise, SMB, and public sector orders respectively rose 10%, 8%, and 7%, and service provider orders dropping 1% (compares with a 10% FQ1 service provider drop).
- Cisco still isn't modeling a rebound in service provider or emerging markets demand for several quarters, and forecasts global service provider capex will be down by a mid-single digit % in 2015. But it's more optimistic about enterprise, public sector, U.S., and EMEA demand.
- Telecom and networking equipment vendors, many of whom have been hit hard by capex pressures, are rallying following Cisco's numbers, as are a couple of component/chip suppliers. The Nasdaq is up 0.7%.
- Notable gainers include Alcatel-Lucent (ALU +4.7%), Aruba (ARUN +3.4%), Ruckus (RKUS +5.1%), Sonus (SONS +3.4%), Extreme Networks (EXTR +3.4%), Brocade (BRCD +1.9%), Adtran (ADTN +3%), Infoblox (BLOX +2.7%), Finisar (FNSR +2.1%), Cavium (CAVM +2%), Ixia (XXIA +1.9%), and Mavenir (MVNR +3.4%).
- Cisco's 18% Y/Y wireless product sales growth appears to be going over well with Aruba and Ruckus investors, and its 11% switching growth with Extreme and Brocade investors.
Thu, Feb. 12, 9:15 AM| 5 Comments
Wed, Feb. 11, 5:00 PM
- Cisco (NASDAQ:CSCO) guides on its FQ2 CC (webcast) for 3%-5% FQ3 revenue growth and EPS of $0.51-$0.53, in-line with a consensus of 4% growth and $0.52.
- John Chambers notes Cisco isn't modeling a rebound in emerging markets and service provider sales for several more quarters. As is the case for other enterprise tech giants, forex is acting as a headwind.
- Product orders rose 5% Y/Y in FQ2, an improvement from FQ1's 1%; book-to-bill was above 1. Americas orders +8% (U.S. +7%) and EMEA +7%, but Asia-Pac -6%, with a 19% Chinese decline more than offsetting 11% Indian growth.
- Enterprise orders +10%, with Cisco's 28 largest enterprise accounts growing over 30%. Commercial (SMBs) +8% and public sector +7%. Service provider orders fell 1%, but that's a big improvement from FQ1's 10% drop.
- Product segment performance: Switching revenue +11% to $3.62B (lifted by Nexus 3K/9K data center switch growth); routing +2% to $1.76B; collaboration +10% to $990M (improved from recent quarters); data center (UCS servers) +40% to $846M; service provider video -19% to $776M (set-top share loss); wireless +18% to $611M (Meraki sales doubled); security +6% to $416M.
- FQ2 results, dividend hike/details
Wed, Feb. 11, 4:20 PM
- Cisco (NASDAQ:CSCO) uses its FQ2 report to state it's upping its quarterly dividend by $0.02 to $0.21/share; that's good for a 3.1% yield at current levels. The next dividend will be paid on April 22 to shareholders on record as of the April 2 close.
- With the help of favorable comps - sales declined sharply a year ago - product revenue rose 8% Y/Y in FQ2 to $9.08B, a marked improvement from FQ1's flat growth and driving the revenue beat. Services revenue rose 5% to $2.86B.
- Gross margin was 61.7%, down from 63.3% in FQ1 but up from 61.3% a year ago, and in-line with guidance of 61%-62%. GAAP operating expenses rose 4% to $4.47B; R&D totaled $1.53B, sales/marketing $2.31B, and G&A $490M.
- $1.2B was spent on buybacks, up from FQ1's $1B. CC at 4:30PM ET, guidance should be provided.
- CSCO +1.5% AH to $27.31.
- FQ2 results, PR.
Wed, Feb. 11, 4:07 PM
Tue, Feb. 10, 5:35 PM
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Cisco Systems Inc is engaged in designing, manufacturing and selling of Internet Protocol (IP) based networking products and services related to the communications and information technology (IT) industry.
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