Sep. 16, 2013, 7:35 PM
- Juniper (JNPR) has launched OpenContrail, a software-defined networking (SDN) controller the company will make freely available through an open-source license. Juniper is also rebranding and announcing the general availability of a version that comes with services/support (it goes for $1,700 per CPU socket).
- OpenContrail, like other SDN platforms, allows users to provision and program compatible network resources, theoretically with the click of a mouse. Among other things, it can be used to create virtual networks and interact with cloud management platforms. Juniper claims its controller has been in trials with 40+ customers.
- The products are the fruits of Juniper's 2012 acquisition of Contrail Systems, which was well-received by investors.
- Juniper's strategy is very different from those of VMware (VMW) and Cisco (CSCO), each of whom are selling proprietary SDN controllers to go with higher-level software. VMware, which doesn't sell hardware, is partnering with a slew of Cisco rivals (inc. Juniper). Cisco is counting on its huge installed base to make what's largely a go-it-alone approach successful.
- A Juniper exec says his firm is comfortable open-sourcing its controller because it doesn't think SDN will commoditize networking hardware (some disagree). "When you put these overlays on top of the network, it’s going to drive more traffic ... Performance is still going to matter."
- Analyst Zeus Kerravala thinks Juniper is simply being pragmatic on account of its relatively small data center share."Historically, Juniper’s tried too hard to be Cisco, like when they build these proprietary, vertically integrated solutions. That’s fine when you’re Cisco."
Sep. 12, 2013, 10:38 AM
- Cisco (CSCO +0.2%) asserts its nPower X1 network processor (NPU) delivers 400Gbps of throughput (matching ALU's oft-praised FP3), and was "purpose-built" for software-defined networking (an unmatched level of programmability is promised). (PR)
- EZchip (EZCH -22.4%) investors aren't taking the news well. Cisco is the NPU developer's top client, and strong sales of Cisco's ASR 9000 edge router (uses EZchip's NP-3/NP-4 processors) have done wonders for EZchip's top line. Cisco's announcement raises the possibility the X1 will be used in the ASR 9000's successor.
- EZchip disclosed on its Q2 CC Cisco accounted for 46% of its quarterly revenue. Sales to the networking giant rose 55% Q/Q and 33% Y/Y, and were forecast to "grow significantly" Y/Y in 2013.
- Benchmark is defending EZchip after talking with CEO Eli Fruchter. Fruchter: "To the best of our knowledge, Cisco will use the [240Gbps] NP-5 in all key platforms that use the NP-4 today."
- While many rivals increasingly rely on 3rd-party NPUs (from EZchip, Broadcom, Cavium, etc) Cisco continues to invest heavily in developing proprietary ASICs to differentiate certain switch/router lines.
Sep. 11, 2013, 5:27 PM
- Cisco (CSCO) is adding a Services Security Practice to its considerable services ops, with the dual goals of supporting its security hardware and offering value-added managed services.
- As rival Palo Alto Networks can vouch, demand for cloud-based security services that are tied to locally-installed hardware is growing rapidly. Meanwhile, John Chambers has set a 5-year services revenue CAGR target range of 9%-11%, well above a total revenue CAGR range of 5%-7%.
- Cisco is in the midst of giving its slumping security ops a shot in the arm by acquiring intrusion prevention system (IPS) leader Sourcefire for $2.7B. Sourcefire also offers some subscription-based services to complement its hardware.
- Whereas upstarts such as Sourcefire, Palo Alto, and Fortinet have been posting strong Y/Y rev. growth, Cisco's security sales were flat Y/Y in the July quarter. However, that was an improvement from the April quarter's 4% drop.
Sep. 10, 2013, 6:49 PM
- Cisco's (CSCO) $415M purchase of flash storage system vendor Whiptail marks the networking giant's official entry into the storage hardware market.
- Though Cisco has become a major player in the server market through its UCS line, and has had a large presence in storage networking for some time, it has been content to leave storage sales to partners such as EMC, IBM, and NetApp (NTAP), along with server/Ethernet switch rivals such as H-P and Dell.
- In a blog post explaining the deal, exec Paul Perez states Cisco concluded "UCS needed to be best-in-class at accelerating hot data layers" (i.e. mission-critical data), and that a flash storage offering was needed to achieve this goal.
- Perez declares Whiptail to offer "the highest scalability in performance and capacity of any scale-out flash vendor on the market today," (rivals such as Violin Memory might beg to differ), and imagines solutions leveraging Whiptail, UCS, and Nexus switches enabling customers to load "vast amounts of data in seconds and minutes, not hours or days," among other things.
- Whiptail relies on a proprietary OS built from the ground up to handle flash storage, something it argues yields superior performance.
- The startup's products compete directly against systems from EMC's XtremIO unit, and indirectly against other flash-based EMC products. They also compete against IBM's Texas Memory unit and NetApp's flash offerings.
- The Cisco-EMC partnership has already been pressured by the software-defined networking efforts of VMware's Nicira unit, which stand to make it easier for companies to replace Cisco gear with rival/commodity hardware (if adopted). There have been reports EMC has considered further encroaching on Cisco's turf by acquiring a networking hardware firm.
Sep. 10, 2013, 8:31 AM
- Cisco (CSCO) intends to acquire privately held Whiptail, a provider of solid-state memory systems, for $415M.
- Whiptail's technology enables organizations "to simplify data center and virtualized environments, and process more data in less time," Cisco said. "Whiptal will strengthen Cisco's Unified Computing System strategy and enhance application performance."
- Cisco's acquisition follows Western Digital's announcement yesterday that it's buying Virident Systems for $685M in a deal that extends Western Digital's presence in the market for server-based flash storage. The deal sent shares of Fusion-io (FIO) soaring 26% yesterday on hopes that it may be bought and they're now +4.7%. (PR)
Sep. 5, 2013, 7:02 PM
- Network World reports Cisco (CSCO) is getting set to launch the NCS 6000, a core router/optical transport platform meant to smoothly handle diverse IP traffic loads (important as video and mobile accounts for a growing share of that traffic).
- The 6000, likely to feature a new ASIC Cisco has spent $250M developing, would go head-to-head against Juniper's (JNPR) successful PTX Series and Alcatel-Lucent's (ALU) 7950 XRS. Juniper says the PTX Series routers, which began shipping early last year, is now used by "dozens of the top 130 service providers in the world."
- In theory at least, the 6000 complement Cisco's more powerful but less complex CRS core router line. But one source asserts its launch will make CRS "a legacy platform." Cisco is less than 3 months removed from announcing the CRS-X, which delivers a 150% increase in capacity/slot over its predecessor.
- Regardless, Cisco's core router ops could definitely use a boost following a difficult July quarter that sparked concerns about share loss. The company's edge router sales are faring better.
- Meanwhile, SDN Central reports rumors are floating hyped software-defined networking (SDN) startup Big Switch could be acquired by Cisco for less than $100M, presumably for its talent. The company, which once poached Cisco exec Parashant Gandhi, has recently been hit by executive defections of its own (one of them to Cisco).
- Whereas Big Switch initially proposed to completely remake customer data centers through an SDN platform based on the OpenFlow standard, companies are now more partial to the gradual (overlay-based) approaches pushed by Cisco, VMware, and others.
Sep. 4, 2013, 11:41 AM
- At a Citi conference (webcast), departing CEO Kevin Johnson stated Juniper's (JNPR +5.5%) Q3 bookings are tracking above expectations, and that router demand is healthy.
- Routing rivals Cisco (CSCO +1.5%) and Alcatel-Lucent (ALU +4.7%) appear to be getting a lift from the remarks, and from Ciena's FQ3 beat and FQ4 guidance. In Alcatel's case, M&A hopes fueled by Microsoft/Nokia might also be a trigger.
- Thanks in part to strong MX Series edge router sales, Juniper's routing revenue rose 14% Y/Y in Q2, offsetting declining security revenue (share loss) and accounting for half of total revenue. Cisco reported strong edge router sales for the July quarter, but total routing revenue was flat thanks to core router weakness (possible due to share loss to Juniper/Alcatel).
- Alcatel's IP division (switches/routers) has been a strong point, growing 21% Y/Y in Q2. The company entered the core router market last year via its 7950 XRS line; a PR mudslinging battle with Cisco began shortly afterwards.
Sep. 3, 2013, 4:41 PM
- Cisco Systems, Inc. (CSCO) declares $0.17/share quarterly dividend, in line with previous.
- Forward yield 2.90%
- Payable Oct. 23; for shareholders of record Oct. 3; ex-div Oct. 1.
Aug. 29, 2013, 10:33 AM
- Aruba (ARUN +1.7%) is supplying the Wi-Fi access points through which Google will provide high-speed Web access at 7K U.S. Starbucks stores.
- Aruba is effectively displacing Cisco (CSCO +1%), which provides the access points used by current Starbucks Wi-Fi partner AT&T.
- Meanwhile, IDC has estimated Cisco's enterprise Wi-Fi sales rose 16.7% Y/Y in Q2, outpacing market growth of 14.8% and leading the company's share to rise to 58.4% (up from 48.8% in Q1). Cisco reported 32% Y/Y July quarter growth for its Wi-Fi division (strong carrier Wi-Fi sales provided a boost).
- Aruba, battered earlier this year by bad earnings news and concerns Cisco's bundling efforts are taking a toll, is estimated to have seen 13.6% enterprise growth and held an 11% share. The company provided more encouraging numbers earlier this week.
- Ruckus (RKUS +0.1%), which gets a larger portion of its Wi-Fi sales from carriers, is believed to have seen its enterprise share rise to 5.5% in Q2 on the back of 37.3% growth.
Aug. 28, 2013, 5:54 PM
- MobileNext, previously touted by analysts as a growth opportunity, works in tandem with Juniper's (JNPR) MX series edge routers to create a gateway/management system standing between 3G/4G mobile networks and wireline networks.
- The platform, launched in 2011 as part of Juniper's Project Falcon mobile initiative, struggled to compete against Cisco's (CSCO) ASR 5000 gateway (a product of the Starent acquisition). Juniper says it will still target the mobile market via the MX series, SRX series security appliances, and the JunosV App Engine.
- In spite of MobileNext's struggles, Juniper's MX series sales rose 19% Q/Q and 43% Y/Y in Q2. Likewise, Cisco reported strong July quarter sales for its ASR 9000 edge router line.
Aug. 28, 2013, 2:52 PM
- The decline is a little better than Q1's 5% drop, but still points to a bleak demand environment, as enterprise attempts to improve server efficiency (via consolidation and virtualization) and a mix shift towards cheaper, white-label servers preferred by Internet/cloud companies hurt sales. (PR)
- IDC is even more pessimistic, estimating revenue fell 6.2% and units 1.2% (lower ASPs). (PR)
- x86 servers (largely INTC-based) continue gaining share: Gartner thinks sales rose 2.1% Y/Y and units 4.5%. The opposite holds for Unix servers: sales -25.3% and units 27.4%. "Other" server sales (inc. IBM mainframes) rose 6.9%.
- IBM and H-P (HPQ), whose enterprise hardware units have fallen on hard times, remain the industry's top vendors, but continue to bleed share. IBM's share fell 160 bps Y/Y to 25.6%, and H-P's 420 bps to 25%.
- DELL and Cisco (CSCO), as demonstrated by recent earnings numbers (I, II), remain share gainers. Dell +210 bps to 17.7%, Cisco +150 bps to 4.4%. Oracle (ORCL), which is seeing rising (Intel-based) engineered system sales and plunging Unix/SPARC CPU server sales, is assigned a 5.8% share (-20 bps).
- "Other" vendors, including white-label firms, had a 21.5% share (+230 bps). IDC estimates sales of density-optimized servers (beloved by Internet companies) rose 26.6% to $735M, and now make up 6.2% of server revenue.
Aug. 26, 2013, 1:49 PM
- VMware's (VMW -0.6%) VMworld product announcements have commenced. The most noteworthy is the introduction of VMware NSX, a management/virtualization platform that combines Nicira's software-defined networking (SDN) platform with the networking/security tools found in VMware's vCloud Suite (they allow virtual networking appliances to be set up). NSX is integrated with VMware's vSphere virtualization platform.
- NSX allows VMware to offer a common platform for managing/configuring physical switches, virtual appliances, and the services delivered over them. It amounts to a fresh shot across VMware partner Cisco's (CSCO +0.4%) bow, since it shifts network intelligence away from Cisco's switches and related management tools, and could make it easier to replace Cisco hardware with commodity gear.
- Cisco, which sold off when VMware's purchase of Nicira was announced, is attempting to counter VMware and other SDN players through its proprietary ONE SDN controller and related onePK API, both of which are set to be supported by the company's entire switch/router lineup.
- Brocade (BRCD -0.8%) Vyatta virtual router unit has also been targeting the virtual appliance market.
- Juniper (JNPR -0.2%), which is taking a more collaborative approach to SDN than Cisco (likely due to its smaller market position), plans to have its switches support NSX. Dell, H-P, and startup Arista are also on board.
- Many of the initial hardware supporters are relying on Broadcom's (BRCM -0.6%) Trident II network processor. The chipmaker has long viewed SDN (thanks to its enabling of commodity switch use) as a growth opportunity.
- Early users of NSX include Citi, eBay, and GE.
Aug. 16, 2013, 5:23 PM
- William Blair's Jason Ader, who is reiterating an Outperform, says meetings with Ruckus' management left his firm with "increased confidence" in Ruckus' (RKUS +2.7%) medium/long-term ability to benefit from growing carrier Wi-Fi deployments.
- Ader thinks carrier Wi-Fi is turning into a two-horse race involving Ruckus and Cisco (Aruba, Alcatel-Lucent, and Ericsson also compete), and that Ruckus is gaining enterprise Wi-Fi share. He also sees adoption of the Hotspot 2.0 standard (enables automatic discovery/login for carrier and public Wi-Fi networks) acting as a 2014 catalyst.
- Ruckus and rival Aruba (ARUN +0.7%) outperformed yesterday after Cisco (CSCO -0.9%) reported its Y/Y Wi-Fi hardware growth accelerated in the July quarter. Cisco also mentioned on its CC its recently-acquired Meraki enterprise Wi-Fi unit (a major Aruba rival) saw 100%+ Q/Q order growth, and is now on a $250M+/year order run rate.
Aug. 15, 2013, 6:16 PM
- H-P (HPQ -4.5%) fell sharply today thanks to Cisco's (CSCO -7.1%) light guidance and order data, and perhaps also some of the specific factors that went into the numbers.
- But shares are up 0.5% AH in response to Dell's revenue beat. The fellow IT giant reported a 5% Y/Y drop in PC division sales, and 8% growth in enterprise hardware sales.
- Cisco, which fiercely competes with H-P in the server and Ethernet switch markets, mentioned on its CC enterprise orders fell 2% Y/Y in FQ4, thanks to a 10% EMEA drop. SMB (+5%), public sector (+6%), and carrier (+6%) orders were healthier.
- Also, though Cisco's U.S. (+5%) and EMEA (+6%) orders were solid, Asia-Pac orders fell 3% Y/Y. H-P's Asia-Pac sales fell 12% Y/Y in the April quarter.
- Cisco's data center revenue rose 43% Y/Y thanks to continued share gains for its UCS servers, but that represented a slowdown from FQ3's +77%. Switching revenue +5% Y/Y, thanks to 20% growth for the Nexus data center switch line. Routing was flat in spite of 69% growth for the ASR 9000 edge router line (good for EZCH).
- Cisco Wi-Fi hardware rivals Aruba (ARUN -0.2%) and Ruckus (RKUS -0.4%) outperformed the Nasdaq. Cisco reported 32% Y/Y Wi-Fi hardware growth, a pickup from FQ3's +27%.
- More on Cisco
Aug. 15, 2013, 10:00 AM
- Cisco (CSCO -6.6%) has been upgraded to Neutral by Sterne Agee and ISI, even as shares sell off in response to the company's FQ4 results and FQ1 guidance.
- Intel (INTC -1.4%) and Micron (MU -3%) have been cut to Neutral by Baird.
- Renren (RENN -9.3%) has been cut to Underperform by Jefferies following its Q2 revenue miss and soft Q3 guidance.
- NetApp (NTAP -2%) has been cut to Hold by Lake Street Capital following its mixed FQ4 results and ho-hum FQ1 guidance.
- Bazaarvoice (BV +3.8%) has been started at Buy by B. Riley
Aug. 15, 2013, 9:11 AM
Cisco Systems, Inc. designs, manufactures, and sells Internet Protocol based networking products and services related to the communications and information technology industry. It provides a broad line of products for transporting data, voice, and video within buildings and across campuses. The... More
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