Thursday, December 12, 2013

Cisco Resets Long-term Growth Forecast to 3-6%

In its annual financial analyst conference, Cisco reset its long-term forecast to 3-6% annual growth over the next 3-5 years, down from the 5-7% range it had long held.  The long-term earnings per share growth forecast was also lowered to 5-7% from the previous target range of 7-%

Cisco executives cited historic transformations underway in the networking business as well as persistent challenges in emerging markets, such as Russia and Brazil, and ongoing issues in China.

Cisco's core switching and routing business is expected to remain flat to up 1% over the 3-5 year horizon, said CEO John Chambers and Chief Financial Officer Frank Calderoni.

Some reporter notes from the webcast:

  • Areas of relative strength include data center, wireless, security and switching business.
  • Areas of relative weakness include sales in emerging markets, sales to Service Providers, and product transitions in routing and switching. Cisco continues to see macroeconomic uncertainty and difficult Service Provider market dynamics as ongoing headwinds.
  • In its last quarterly call, Cisco forecast that sales for this quarter will be down 8-10% down on a YoY basis.
  • Major growth drivers for Cisco going forward are cloud, mobility, security, services, software and the Internet of Everything.  Cisco has recently announced its Application Centric Infrastructure for next-generation data centers.
  • Cisco believes its main competitors continue to lack breadth and fail to define a total solution architecture.
  • Cisco will increase R&D spending in growth areas, including data center, mobility, security and services.
  • Cisco believes the SDN market will play out to its advantage because it will be necessary to embrace a full application-centric infrastructure to really deliver fast network programmability.
  • Cisco believes that network architecture is fundamental to its competitive differentiation.  Architectures are defined by ASICs + Software + Hardware + Services. Core routing and switching remain the foundation for Cisco.
  • Cisco believes there will be no "whitebox" SDN cost advantage compared with its branded switch with integrated hw/sf.
  • Since launching its Nexus 9000 switch five weeks ago, a pipeline of about 300 customers has developed.  Most deals are in the $100K to $1 million range.
  • Cisco's last 13 acquisitions have been in the software or cloud space.
  • Today, cloud infrastructure and services represent about 8% of the overall $2.056 trillion total IT market.  By 2017, Cisco expects cloud infrastructure and services to represent 14% of the market, which is expected to be in the $2.4 trillion range for total IT spending.  This means the total addressable market for Cisco Cloud products and services is $42 billion by 2017, compared to current Cisco sales of $22 billion for cloud products/services in 2013.
  • Hardware accounts for less than 30% of data center infrastructure spending. Labor, software and energy costs make up the rest.
  • Cisco believes the Internet of Everything will be the next big trend representing a multi-trillion dollar opportunity.
  • Cisco will strive to be more of  "services-led company" but is not transitioning into a service
  • Cisco continues to have a strong balance sheet.
  • Regarding the ongoing NSA scandal and its potential impact on Cisco in emerging markets, Chambers reiterated that Cisco does not design any unique capabilities into its products for any government and it does not give anybody access to its code. He said the NSA situation is continuing to have an impact in one market (China), but that talking to customers about security in other emerging market is just part of the sales cycle.

Archived materials from the full-day conference are online.

U.S. Mobile Operators Agree to Device Unlocking

AT&T, Sprint, T-Mobile, U.S. Cellular and Verizon Wireless agreed to adopt a voluntary set of six principles for unlocking of consumers’ mobile phones and tablets.

Key principles:

1. Disclosure of unlocking policies to consumers. Carriers agree to make their policies on postpaid and prepaid unlocking of mobile devices easy to understand and accessible.

2. Postpaid Unlocking.  Upon request, carriers will unlock mobile wireless mobile devices or provide information to consumers to unlock their devices.

3. Prepaid unlocking policy. Carriers, upon request, will unlock prepaid mobile wireless devices no later than one year after initial activation, consistent with reasonable time, payment or usage requirements.

4. Notice. Carriers that lock devices will clearly notify customers that their devices are eligible for unlocking at the time when their devices are eligible for unlocking or automatically unlock devices remotely without additional fee. Carriers reserve the right to charge non-customers or former-customers a reasonable fee for unlocking requests.

5. Response time. Carrier will unlock eligible mobile devices within two business days of receiving a request.

6. Deployed personnel unlocking policy.  Carriers will unlock wireless devices for deployed military personnel who are customers in good standing..

Carriers reserve the right to decline an unlocking request if they believe the request is fraudulent or stolen.

Dell's Cloud Partner Program Welcomes Windows Azure

Dell has extended its Cloud Partner Program to include Microsoft's Windows Azure services.

Under a newly expanded strategic alliance with Microsoft, Dell will offer customers a central point of solution integration, control and direct support, lessening the complexity and challenges of deploying cloud environments.

“At the heart of Dell’s Cloud strategy are customer choice and flexibility, the underlying reasons driving our continued expansion of the Dell Cloud Partner Program and our open, scalable cloud solutions and services across Dell,” said Nnamdi Orakwue, vice president, Dell Software Strategy, Operations and Cloud. “The evolution of our Windows Azure alliance combined with Dell’s end-to-end solutions, services and support will help Dell customers globally truly reap the benefits of cloud to achieve tangible business results.”

Dell Cloud Manager will support Windows Azure Compute as well as Windows Azure Storage. 

Dell's Cloud Partner Program Welcomes the Google Cloud

Dell will promote the Google Cloud Platform and its compute, storage and application services to developers and businesses worldwide through the Dell Cloud Partner Program beginning next year.

“Putting the power of cloud in our customers’ hands – and giving them the choice and flexibility to pursue the right cloud for their unique needs – will not only help individual businesses thrive, but collectively it will drive the whole technology industry forward to a new era of innovation,” said Nnamdi Orakwue, vice president, Dell Software Strategy, Operations and Cloud.

“Combining over 15 years of technical innovation and datacenter expertise at Google with Dell’s business and integration solutions will enable new ways for customers to take advantage of the benefits of cloud,” said Shailesh Rao, Head of Google Cloud Platform, Google.

Google Cloud Platform gives developers with access to Google Compute Engine (Infrastructure-as-a-Service), App Engine (Platform-as-a-Service), storage and APIs, developers and business can easily deploy applications into a highly scalable public cloud environment for their specific needs.

Dell and Red Hat Team on OpenStack Private Clouds

Dell and Red Hat agree to jointly develop enterprise-grade, private cloud solutions based on OpenStack.

Under the deal, Dell becomes the first company to OEM Red Hat Enterprise Linux OpenStack Platform. The co-engineered solution will be built on Dell infrastructure and Red Hat Enterprise Linux OpenStack Platform. The solution will be delivered by a Red Hat Enterprise Linux OpenStack Platform practice within Dell Cloud Services.

The companies also will contribute code to the OpenStack community and collaborate on Red Hat Enterprise Linux OpenStack Platform 4, currently in beta, which integrates OpenStack Havana, Red Hat Enterprise Virtualization Hypervisor, and Red Hat Enterprise Linux 6.5. In addition, Dell plans to work closely with Red Hat on several future-state projects including:

OpenStack Networking (Neutron) to enable Software-Defined Networking and Networking-as-a-Service between interface devices such as virtual network interface cards, and
OpenStack Telemetry (Ceilometer) to provide OpenStack resource instrumentation, which can help support service monitoring and customer billing systems.

Lastly, Dell is joining the Red Hat OpenStack Cloud Infrastructure Partner Network as an Alliance Partner.

Nimble Storage Raises $168 Million in IPO

Nimble Storage priced an initial public offering of 8 million shares at $21, or $168 million for the company.

Shares will begin trading on the NYSE under the symbol NMBL on Dec. 13.

  • Nimble, which is based in San Jose, California, supplies flash-optimized hybrid storage solutions. The company is headed by Suresh Vasuden, who previously servedd as CEO of Omneon (acquired by Harmonic), and as a senior executive at NetApp for over 10 years where he led the company's product strategy and development.

Australia's NBN Co Appoints Bill Morrow as CEO

Australia's NBN Co named Bill Morrow as its new CEO.

Bill Morrow has headed up Vodafone Australia since March 2012. Previously, he was Chief Executive of Clearwire Incorporated and the Pacific Gas and Electric Company. He is a former Europe Chief Executive with Vodafone Group and has run the Group's businesses in Japan and the UK.

Morrow’s appointment by the Board of NBN Co comes as the company lays out the framework for delivering very fast broadband to Australian homes and businesses sooner and at less cost to taxpayers than previously was the case. The new approach is contained in the Strategic Review of the NBN which the company presenting to the Government.

Ciena Posts Q4 Revenue of $583.4 Million

Ciena reported Q4 revenue of $583.4 million as compared to $465.5 million for the fiscal fourth quarter 2012. For fiscal year 2013, Ciena reported revenue of $2.1 billion, as compared to $1.8 billion for fiscal year 2012.  Net loss (GAAP) for the fiscal fourth quarter 2013 was $(9.8) million, or $(0.09) per common share, which compares to a GAAP net loss of $(38.8) million, or $(0.39) per common share, for the fiscal fourth quarter 2012.

“Fiscal 2013 was a strong year for Ciena, with industry-leading revenue growth, record backlog, increased market share, and a three-fold improvement in adjusted operating profit over last year,” said Gary Smith, president and CEO of Ciena. “This performance validates the strategic market differentiation we’ve established with our OPn architecture, our unique approach to customer engagement, and our continued technology innovation. These differentiators will help us continue to grow revenue and increase operating leverage in 2014.”

Some notes:

  • Non-U.S. customers contributed 44.1% of total revenue.
  • One customer represented a total of 16.5% of revenue.
  • Cash and investments totaled $486.5 million.
  • Cash flow from operations totaled $3.6 million.
  • Average days' sales outstanding (DSOs) were 75.

Ciena to Transfer to from NASDAQ to NYSE

Ciena will transfer the listing of its common stock from NASDAQ to the New York Stock Exchange (NYSE) on December 23, 2013, under its current ticker symbol "CIEN". The company will continue to trade on the NASDAQ until the transfer is complete.

China Telecom Picks ALU to Support LTE-TDD and LTE-FDD in 12 provinces

Alcatel-Lucent confirmed that China Telecom has chosen it as one of the top three suppliers for its network infrastructure operating in both the LTE TDD and FDD modes.

Specifically, China Telecom has selected Alcatel-Lucent's lightRadio LTE Radio Access Network (RAN) as a key piece of its new nationwide ultra-broadband mobile access network.  Alcatel-Lucent will provide 9,892 base stations as one of the top three suppliers for China Telecom's deployment of LTE-TDD and LTE-FDD technologies in 12 provinces in China.  Financial terms were not disclosed.

China Mobile to Deploy ALU's Small Cells in TD-LTE Network

China Mobile will deploy Alcatel-Lucent's small cells solution in the world's largest TD-LTE network.

China Mobile and Alcatel-Lucent co-created the lightRadio 9768 Metro Radio Outdoor (MRO), which was launched in February 2013 at the Mobile World Congress in Barcelona.  The companies have completed small cell tests on high-traffic roads in the Zhejiang, Fujian, Liaoning and Shandong provinces and Downtown shopping Mall in Jiangsu.

China Mobile has also confirmed the selection of Alcatel-Lucent's lightRadio Radio Access Network (RAN) as part of its TD-LTE mobile broadband network, and Alcatel-Lucent is providing 24 percent of the Evolved Packet Core for the network.

Financial terms were not disclosed.