Networking giant Cisco is still the number one player in the industry, but its investors have not been all that optimistic as of late. This is due to declining earnings, and Cisco caused more reason for concern, having just cut its revenue forecast for the next three years. CFO Frank Calderon said that his company is now expecting a growth rate of 5 to 7 percent a year for the next three years, compared to the previous forecast of 12 percent to 17 percent – a major decline. It comes as no surprise though, and shares even went up by 26 cents or 1.6 percent to $16.35 after the announcement. The reason is that analysts have already been forecasting an average of 5.5 percent growth for this year.
Nikos Theodosopoulos, an analyst with UBS, does have some good news though.
“A key risk to Cisco’s long-term GM may be may be Switch assumptions. Cisco expects Switch [margins] to remain above avg, which may depend on price/competitive actionsby Huawei, HP, Dell, Juniper, Brocade and others.”
Cisco, which laid off a sizable percentage of its employees and is still on the process of restructuring, is also expanding its ecosystem. 2X Software announced today that Cisco will pre-install its 2X Client for Android on the latter’s Cius business tablets. The networking giant has been doing more than that to accelerate its growth and catch up with the competition though.
It seems that CEO John Chamber is pressing executives, and this is how a smear campaigns against Juniper Networks was born. Just days after Microsoft’s play at VMware (and before that Gmail), the company released a white paper and even a video criticizing Juniper’s customer service and delivery times – to say the least. This is a bit of a sleazy move considering that Cisco is a company dominating a multibillion worldwide market, but it may not be that ineffective.