Carriers prop up Cisco growth

It’s a challenging time for Cisco’s enterprise business due to voluntary network-infrastructure spending limits, according to

UBS Investment research. The firm says sales in Europe are slowing down compared to last quarter, as are corporate sales in the U.S., particularly on the West Coast, UBS says. The strongest line of business for Cisco is IP routing gear for service providers.

The good news for Cisco is that competitor Juniper is having mixed results among its carrier customers based on what region the carrier is located in. UBS says Juniper sales to service providers in Asia were strong, but that sales to U.S. service providers were sluggish. That can only be helpful to Cisco. Over the past year or so, Juniper’s share of the carrier market has been creeping upwards.

UBS also says that, like Cisco, Juniper is having a challenging time with its sales to enterprises around the world. The reason for both companies’ struggle is what UBS describes as “deteriorating macro issues” – which probably means the looming recession.

While Cisco totally dominates enterprise networking sales, UBS is still cutting Juniper some slack in its enterprise sales. The financial firm still believes that Juniper’s enterprise EX switches will make a big difference once they are fully baked and better known among customers.

“We continue to see the next potential catalyst tied to the success of the new EX-series LAN Switch, which we see as an ’09 story for Juniper,” UBS says. Meanwhile, Cisco pretty much remains in a class by itself.

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