Nexus 9000 switches grow business at a fast pace
Cisco’s (CSCO) Nexus ACI (Application-Centric Infrastructure) is a data center networking architecture designed to deliver business and other applications to end users in a cost-effective way. ACI comprises Cisco’s Nexus 9000 switches, a policy model and an application policy infrastructure controller (or APIC).
Nexus 9000 switches have been a success for Cisco. During Cisco’s 4Q15 earnings conference call, management mentioned that the company added 1,400 new Nexus 9000 customers for a total of 4,100. More importantly, 26 of the 28 largest enterprise customers in the world now use Nexus 9000 switches.
These additional customers are helping Cisco in healthy revenue growth for its Nexus 9000 business. Cisco said that revenues for Nexus 3000, Nexus 9000, and the ACI portfolio of products managed to grow by more than 50% sequentially and 100% on a year-over-year basis in fiscal 4Q15 to become a $438 million business. The above graph shows that growth.
Cisco’s ACI initiative benefits switching business
Cisco built the ACI initiative based on technology developed by Insieme Networks. To find out more about this, you can read our article Cisco Acquired Insieme to Focus on the Important SDN Trend.
The term SDN signifies the transition from a hardware-centric approach for networking to a virtualized network environment designed to enable flexible, application-driven customization of network infrastructures. By leveraging Insieme’s technology, Cisco successfully partnered with companies such as IBM (IBM), Microsoft (MSFT), and SAP (SAP).
Cisco is not alone in leveraging the SDN trend. VMWare (VMW) bought SDN vendor Nicira for a valuation of $1.26 billion in 2012. After completing this acquisition, VMWare named its SDN platform NSX. The platform leveraged Nicira’s technology. Juniper Networks (JNPR) similarly bought SDN vendor Contrail and launched an SDN controller named OpenContrail.
If you’re bullish about Cisco’s prospects in the SDN market, you can invest in the PowerShares QQQ Trust, Series 1 ETF (QQQ). QQQ invests about 2.7% of its holdings in Cisco.