Turmoil at Vyatta as Cisco prepares to announce its Q2FY10 earnings?

Earlier today, the bio and photo of Dave Roberts - the Vice President of Marketing for open source networking vendor - Vyatta, was still featured on its website (now it's gone). So what happened in the space of a mere few hours?

Well, I tried to call Dave this morning and found he was no longer listed within the Vyatta company directory, and because I'm just naturally curious, I called Vyatta's PR Rep - Melissa Neumann at Eastwick Communications. Neumann confirmed that Dave Roberts was no longer with Vyatta. Interestingly, the reason I was trying to reach out to Roberts, was to learn if Vyatta was still promoting its product discounts based on the Cisco Gross Profit Margin that will be revealed during this week's upcoming Cisco Q2FY10 Earnings Conference Call on Wednesday, February 3, at 1:30PM Pacific Time. In the past, the Cisco Subnet had featured Vyatta's Cisco Gross Margin promotions, however earlier today, Neumann was not aware of any promotion and did not get back to me with any update prior to going to press. Also today, RBC Capital Markets Managing Director - Mark Sue provided his take on what we should expect this week from the Cisco Q2FY10 earnings call, "Cisco's results Wednesday evening may point to improving trends in network spending by both enterprises and service providers. Wireline and wireless customer are upgrading their networks and an incremental spending flush may boost Cisco's near term results. On enterprise, we believe corporations are beginning to spend again though sequential growth by customer base may be choppy as we move into 2010. "January quarter revenues may come in near $9.45B (+5%) vs. the consensus of $9.39B. On EPS, we expect a penny better than the consensus of $0.35. In terms of the outlook, Cisco may point to a positive book-to-bill greater than 1.0, strengthening backlog and comment on January which was relatively linear. Deferred revenues may increase in the high single digits QoQ from $9.3B providing further evidence of improving trends." Sue continued, "We've noted better bookings linearity than shipping linearity yet we don't expect major changes in DSO's from last quarter's 32 days. Cisco we believe is working to reduce lead times for key products such as the 6500 and 4500 series, high-end routers cards, etc. For guidance Cisco may point to a rolling recovery. We're seeing improving trends in North America (~55%) stabilizing trends in Europe (~20%) and early signs of a turn in hard hit emerging markets (~10%). We expect Cisco to provide guidance of flat to up 2% QoQ (from a higher base) implying the consensus of $9.48B may move modestly higher while consensus CY10 of $1.48 may inch higher as well." Sue added, "GMs due to carrier mix may display solid trends and despite concerns of pricing pressure, we didn't see anything unusual implying less sequential decline than Cisco's guidance of 64%-65% (vs. 66.3% prior quarter). Competitively, we've seen little impact from HP's foray into networking though we concede HP has gained some mind share with corporate customers, something impacting Cisco's multiple rather than margins or earnings." Sue concluded, "Business is better and Cisco is hiring again. We estimate after last quarter's net reduction of 1,800, Cisco will add 2,000-3,000 employees over the next few quarters. Lastly, inventories may increase sequentially yet most of it may be related to WIP and finished goods as Cisco prepares for a return in demand."

What's your take, why do you think Dave Roberts left Vyatta?

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