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What Impacted Cisco’s Switching Revenue in Fiscal 3Q17?

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Dec. 4 2020, Updated 10:42 a.m. ET

Revenue rose 2% YoY

US-based (SPY) Cisco Systems’ (CSCO) Switching segment saw a revenue rise of 2% YoY (year-over-year) in fiscal 3Q17. Revenue in this segment rose from $3.42 billion in fiscal 3Q16 to $3.49 billion in fiscal 3Q17.

According to Cisco, this 2% rise was driven by “solid growth in data center switching, driven by ongoing strength in the ACI portfolio which was up 42%.” Campus business, which accounts for over 65% of Cisco’s Switching segment’s revenue, also rose marginally in fiscal 3Q17.

In the first nine months of fiscal 2017, Cisco’s Switching segment’s revenue has fallen 5% YoY to $10.5 billion. Switching is Cisco’s largest business segment and accounts for approximately 30% of total revenue.

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Switches contain ports to connect different network segments. Switches are like hubs, networking devices that connect multiple devices to networks using cables, but they perform better. Switching is a networking technology used in campuses, branch offices, and data centers. Switches are used within buildings in local-area networks and across great distances in wide-area networks.

Cisco has a 55.6% share in the switching market

Cisco had a market share of 55.6% in the global switching market at the end of 4Q16. Although Cisco has the majority share in this segment, it competes with tech heavyweights such as Hewlett Packard Enterprise (HPE), Juniper (JNPR), and Huawei, who have market shares of 5%, 17%, and 7%, respectively. While Cisco’s share has fallen from 59.1% in 4Q15, Huawei’s share has increased from 4.4% in 4Q15.

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