Cisco and Brocade are blaming their weakened sales on softened government spending. Wikibon senior analyst Stu Miniman discussed the impact of the federal budget sequestration on the big IT whales in a recent interview with SiliconAngle’s Kristin Feledy.

Miniman says that financial uncertainty is driving government agencies to delay contracts and even cancel some of their larger projects altogether. Costly platform migrations and large scale rip-and-replace initiatives in the network and other parts of the data center are often being put on permanent hold. The networking industry is after all not the only vertical technology that has taken a hit from the sequestration. Traditional vendors are also facing lower demand due to the fact that government agencies have finally started following in the footsteps of their private sector peers. Both segments are veering away from big hardware purchases in favor of more innovative alternatives that can address their technology needs at a better price and performance ratio.

Miniman explains that this trend is the reason cloud service providers and converged infrastructure providers are actually benefiting from the budget cuts. Nutanix, a provider of so-called cloud modules designed with rapid deployment in mind, recently announced that it has reached an $80 million annual run rate.

Feledy wraps up the interview by asking Miniman if the financial woes of data center vendors are raising enough eyebrows. He says that the answer is yes. Research firm Forrester estimates that the sequestration will shave off 1 percent of total IT revenues, but he notes that the implications won’t be nearly as dire as what the industry saw in 2008.

For the full interview, check out the video below.