Cisco announced its financial results today, much to the delight of Wall Street. Cisco revenue beat estimates and posted 8% year-over-year growth. Net income rose 26% over last year. These stellar results prompted Cisco CEO John Chambers to declare, “we are hitting on all cylinders.”
No doubt, these are impressive results, but there is some hidden bad news in all of the confetti and champagne: year-over-year security revenue was flat.
Hmm, I guess one of those cylinders has a little carbon buildup after all. While Cisco security revenue flatlined, other security vendors prospered: Check Point grew revenue by 25% in Q4 2009, Juniper Networks revenue beat Wall Street estimates as did Symantec, and back in October, McAfee announced its biggest financial quarter ever with 8% revenue and 26% net income growth.
Okay, so if other security vendors are growing, why isn’t Cisco? Because:
Cisco used to give away a lot of security stuff to win bigger dollar networking deals. This strategy, along with IronPort sales, seems to be the only things keeping the security ship afloat.
From a Wall Street perspective, who cares? If Cisco revenue and earnings shine, share prices go up and everyone gets rich. True, but Cisco seems to be willing to shed information security sales in favor of greener pastures. If this is the case, enterprise customers should plan accordingly by assessing their Cisco security portfolio and crafting a “plan B” replacement strategy as a hedge.
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Tags: Cisco Systems, Crossbeam Systems, Juniper Networks, McAfee, Symantec, Wall Street
[...] Jon Oltsik, a principal analyst at Enterprise Strategy Group, expounds on Cisco’s inability to boost its security revenue. [...]
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