Video, virtualization and collaboration will drive system-based purchases
Despite its dominance in enterprise networking — 82% share in routing and 70% in switching — Cisco still sees plenty of growth potential. The key is selling a network, not a switch or a router, as the foundation of an intra- or inter-company collaboration system, video-optimized “medianet” or virtualized data center.
Those were the opportunities laid out by Tony Bates, senior vice president and general manager of Cisco’s Enterprise, Commercial and Small Business group at the company’s annual analyst conference this week. He said the sale is based on changing an organizations’ business models or processes.
“Maximizing productivity is a key imperative,” he said.
Cisco’s total addressable market is selling infrastructure for enterprise video, virtualization and collaboration is $91 billion, Bates said. Not bad for a company dominant in what many analysts say are mature markets.
Dominance does not breed complacency, but additional challenges, Bates suggests.
“We have to transform our vision and execution to stay leaders,” Bates added. “We will continue to focus on core networking, continue to enhance and extend that and drive innovation. And (consider) different ways of going to market.”
This will be key in helping Cisco attain its 12% to 17% long term growth targets, which it reiterated at the analyst conference. Analysts are upbeat but not yet sold.
UBS analyst Nikos Theodospoulos states in a bulletin from the conference that Cisco is “an exciting growth company” but notes that long term growth targets may be impacted by the overall recovery of the global economy.
Oppenheimer & Co. was positive on Cisco’s strategy but noted some key proof points: UCS traction, video wins and market share momentum.
“If delivered, (they) make Cisco’s long-term growth targets more attainable,” states Oppenheimer analyst Ittai Kidron in his report from the conference.
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