Cisco posts revenue gains, vows to beat VMware's network software

Sales of Cisco's key products for software-defined networking are growing fast, the company says

Cisco Systems posted quarterly revenue and profit gains that included growth for its software-defined networking products, and Chairman and CEO, John Chambers, used the occasion to lay down the gauntlet to SDN rival VMware.

The company's revenue hit $11.9 billion in the fiscal quarter ended January 24, up 7 per cent from a year earlier. SDN, a new market that might imperil Cisco's traditional network hardware business, was a strong point: Sales of the company's recently introduced Nexus 3000 and 9000 datacentre switches, key to its SDN architecture, grew 350 per cent.

Cisco claimed 1700 total customers for its SDN architecture, called ACI (Application Centric Infrastructure), up from 970 the previous quarter.

On a conference call to discuss the results, Chambers challenged VMware, which sells its NSX software as an alternative to traditional networks.

"We view them as a competitor. We are going to beat them as a competitor. And we will beat them and have fun doing it. I wish I was a better person, but I'm not," Chambers said.

He distinguished VMware from EMC, Cisco's other partner in the VCE all-in-one systems alliance, saying Cisco's relationship with EMC is still strong. Cisco sold most of its share of VCE last year but still contributes server and network components for the venture's popular Vblock platforms.

Chambers also said Cisco is beating so-called "white box" networking vendors, who make inexpensive, generic switches that can be used in some kinds of SDN deployments. Cisco pushes the opposite approach of end-to-end architectures including hardware, software, security and other components, which it says enterprises are using to transform their operations and cut costs.

"Customers will pay probably three to five times as much for a business outcome than they will for a standalone switch or a standalone router," Chambers said.

Cisco's profit also grew during the quarter, rising to $US2.4 billion or $US0.46 per share, from $US1.4 billion or $US0.27 per share a year earlier.

The company's Meraki division, which sells cloud-managed wired and wireless networks and device management, was a standout in the quarter, with revenue doubling year over year.

In the current quarter, Cisco expects revenue to grow by 3.5 per cent from a year earlier. But it doesn't expect much relief in emerging markets or in sales to service providers, two areas where results have been lagging. Service providers' capital spending will stay slow throughout the year and sales in emerging markets are unlikely to rebound in the next few quarters, Chambers said.

Cisco's sales in China, a particularly weak spot where the company has faced allegations around cyberespionage, fell 19 percent.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags business issuesCisco SystemsNetworkingfinancial results

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stephen Lawson

IDG News Service
Show Comments

Essentials

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?