Cisco Teases New Collaboration Tools, Talks Up ACI

Cisco earnings decline, but CEO John Chambers expresses confidence in ACI and hints at new collaboration tools set to debut.

By Sean Michael Kerner | Posted May 15, 2014
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Cisco reported its financial earnings on May 14, showing areas of opportunity and weakness.

For the quarter, Cisco reported revenue of $11.5 billion, which is a year-over-year decline of 5.5 percent. Net income was reported at $2.2 billion, a 12 percent year-over-year decline.

Looking forward, Cisco's guidance for the quarter isn't positive, either. For the fourth quarter of fiscal 2013, Cisco now expects total revenue to decline in the range of minus 3 percent to minus 1 percent on a year-over-year basis.

Among the bright spots for Cisco are its data center and security product portfolios. Cisco CEO John Chambers said during his company's earnings call that data center revenue grew 29 percent.

"UCS continues to cement its place as a leading platform for hybrid cloud environments, big data, and virtual desktop services, gaining market share for the 17th consecutive quarter since it was introduced," Chambers said. "Security revenue increased 10 percent and orders increased 20 percent, as a source for our integration continued to fuel growth and opportunities with customers."

Overall, however, Cisco's switching revenue declined by 6 percent year-over-year.

"We continue to manage through declines in our campus switching portfolio, specifically at the high end, with the exception of the Catalyst 3850, which is going very well," Chambers said. "We are pleased with our momentum in data center switching but it's still early in the high-end switching transition."

Chambers added that he expects that it will take several more quarters before there is growth in overall switching.

One area of potential growth is Cisco's Application Centric Infrastructure (ACI)-related switching portfolio.

"In just our second quarter shipping new Application Centric Infrastructure with ACI-enabled platforms, specifically the Nexus 9000, we grew from 20-plus customers last quarter to 175 customers this quarter, with a pipeline approaching 1,000 customers," Chambers said. "We saw major wins, including competitive wins and displacements at large financial institutions, large cloud providers, software-as-a-service and major service providers."

Cisco first announced its ACI plans and the Nexus 9000 in November of 2013.

Next week is the Cisco Live conference, and Chambers hinted at some of the big news to come, particularly in the area of collaboration.

"You'll see new product announcements throughout this year in the collaboration area," Chambers said. "There is a product announcement at Cisco Live next week where you almost want to think about it like an iMac combination with TelePresence on ease-to-use and tremendous price performance."

Chambers added, "So you can bring this to the desktop and it can be literally a phone replacement that also has a capability of a touchscreen to bring it alive."

Sean Michael Kerner is a senior editor at Enterprise Networking Planet and InternetNews.com. Follow him on Twitter @TechJournalist.

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