About a year ago, Cisco CEO John Chambers predicted his company’s competitive landscape would shift from networking firms to software and Web 2.0 companies. Apparently, Chambers was right: Recent financial results from numerous networking companies suggest many of Cisco’s old rivals are falling off a cliff. Here’s a look behind the numbers.
In April 2007, Chambers predicted Microsoft and Google would emerge as Cisco’s true rivals. Fast forward to the present, and recent financial results from Alcatel-Lucent, Netgear and other companies suggest that Cisco is pounding some of its old rivals into submission.
Admittedly, Cisco’s own financial results haven’t been stellar lately. The company remains wildly profitable, but the weak economy has hurt investor enthusiasm in Cisco.
But if things are challenging at Cisco, they’re downright bleak at many rivals.
- Alcatel-Lucent (remember them?) announced disappointing earnings — yet again — today.
- Extreme Networks shares have hit a 5-year low following weak quarterly results, notes Forbes. Some folks are speculating that the company is up for sale.
- Netgear is generating buzz at Interop Las Vegas this week, but investors spent last week dumping the company stock after Netgear delivered weak quarterly financial results.
- Nortel is making some headway in unified communications, but some company watchers expect Nortel to deliver weak financial results on May 2, according to All About Nortel, a top blog that tracks the company.
- 3Com has changed CEOs, dumped its partner program leaders and is retrenching after a failed merger attempt.
The VAR Guy could go on and on, but you’re starting to get the picture: Networking companies can certainly blame the economy for some of their financial challenges. But the bigger issue seems to be competing with Cisco.
Still, not all networking companies are struggling. Up-and-comers like Digium seem to be having success promoting open source IP PBX technology — though it’s tough to say for sure, since Digium is privately held. F5 Networks recently met financial expectations and could become the networking industry’s next $1 billion company. And Adtran’s quarterly revenue results recently beat Wall Street’s expectations.
Tags: 3Com | Alcatel-Lucent | Cisco Systems | Digium | Extreme Networks | F5 Networks | Netgear | Nortel Networks | Unified Communications
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To answer the question in your headline as succinctly as possible: yes.
Interesting that Juniper Networks was not listed, especially given that the company just reported 30+ percent top line revenue growth in the first quarter year over year.
Michael H: You are correct, and The VAR Guy admits he goofed on that one. He has, however, blogged about Juniper’s momentum and upbeat statements from Juniper’s CFO.