Friday, December 7, 2012

Cisco Systems, Inc. (NASDAQ:CSCO) under no threat from SDN: analyst

The threat, of a shift from networking equipment to software-defined networking (SDN), to Cisco Systems, Inc.(NASDAQ:CSCO) may have been grossly exaggerated, a Credit Suisse analyst wrote on Thursday.

Networking equipment analyst Paul Silverstein aid that the so-called `threat' to companies such as Cisco, Juniper Networks and other similar venders was “more distant and limited than what appears to be the current view held by most members of the investment community.”

At a Gartner Data Center Conference in Las Vegas, Silverstein said that “Most enterprise IT professional we heard from and spoke to at the conference appear to be at the initial stage of simply trying to understand what is SDN, let along what is its value proposition.”

According to him, SDN is in “the classic ‘hype stage’ of the technology adoption cycle and “deployment and significant interest in SDN currently appears to be limited to large, cloud service providers which require significant scalability, multi-tenancy or business agility.”

Silverstein has an Outperform rating on Cisco, which he noted was in much better shape in enterprise switching than people realised.

"Our takeaway regarding Cisco’s SDN strategy is that it is a practical and flexible approach that responds to different requirements and different customers and use cases," he said.

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