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The Time Has Finally Come For Cisco's SD WAN Solutions

Mar. 06, 2019 5:47 AM ETCisco Systems, Inc. (CSCO)12 Comments
James Brumley profile picture
James Brumley


  • The rise of unintended 'multi-clouds' has given rise to the need for integration.
  • Cisco's technology has already been embraced by network operators.
  • IDC's SD WAN hardware market outlook may underestimate what's in store.
  • This idea was discussed in more depth with members of my private investing community, The Well Rounded Investor. Get started today »

When Cisco (NASDAQ:CSCO) acquired Viptela back in 2017 for a relatively modest $610 million, most investors didn't likely notice, and even fewer cared. The networking giant consistently makes off-the-radar deals, quietly integrating others' technologies into its own ecosystem.

This has turned out to be one deal, however, that may have been far more brilliant than it seemed at the time. See, Viptela products - now rebranded using the Cisco moniker - were a chance to establish a presence in a budding market that didn't become evident until late last year. That market is a means of managing what's inadvertently become a multi-cloud environment that's become difficult for enterprises to manage. Just within the past few days, two different surveys have confirmed a new challenge has become a top-of-mind matter for IT managers.

It's time to put the term 'SD WAN' in your lexicon.

The Rise of the Multi-cloud

It's only in retrospect we can say we shouldn't be surprised. Five years ago, most companies realized they needed to be 'in the cloud' (even without knowing exactly why) sparking a rush into cloud infrastructures and architectures that may not be quite what these organizations need.

Many of them now lament they've become 'multi-cloud' companies… organizations with more than one cloud supplier-for-hire (AWS, Oracle, Google, Azure, etc.) as well as multiple applications (SaaS, internal data centers, etc.) but with no measurable benefit to such structures.

The data: Flexera's RightScale 2019 survey of enterprises with any cloud computing operation found that 84 percent of them are multi-cloud. Similar surveys done by Kentik and Densify also found that most organizations are multi-cloud players, and worse, though containers were supposed to bring lower-cost optimization of those clouds, they've actually, unexpectedly increased operating costs.

The world should have thought out their cloud strategies in detail before

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This article was written by

James Brumley profile picture
The Well-Rounded Investor newsletter is the culmination of a couple of decades' worth of not just experience within the financial services industry, but different kinds of experience within the industry. Brokerage, money management, journalism and more, with approaches ranging from short-term trading to buy-and-hold fund selection. Different schools of thought too, with practical applications of contrarianism, melding fundamental and technical analysis, and possibly above all else, learning when and how to ignore the news. Now that wealth of experience is being put to use in a way most investors have never seen before... in a practical way that makes sense, and acknowledges that investing in today's market requires adapting several (and ever-changing) ideas. The premise of yin-yang is only a glimpse of how the Well-Rounded Investor service considers all matter that impact your investments, and responds accordingly.

Analyst’s Disclosure: I am/we are long CSCO. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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