Why Cisco Systems Is Optimistic about Data Center Growth



Hybrid cloud

Cisco Systems (CSCO) sees data center switching and the shift to cloud as key drivers in this space. It expects demand from enterprise, commercial, and public sector customers to drive its data center revenue. According to the company, enterprise customers are looking to transition to the hybrid cloud, which it believes could provide an opportunity. It’s also aiming to provide business-driven workload placement services for clients with a combination of on-premise and public cloud.

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Data center switching

Cisco also provides solutions in data center switching with a focus on network security across multiple environments. It’s gaining traction due to its next-generation data center switching platforms. Companies are shifting to 10-gig (gigabit), 40-gig, and 100-gig architectures, focusing on multi-cloud adoption.

Cisco is gaining traction in the data center service provider space with its Nexus 9K and ACI (application-centric infrastructure) products. However, during the Credit Suisse technology conference, Cisco stated that several service provider clients are re-evaluating their business models, which is leading to technology transitions and lower demand. Cisco has seen an increase in interest for its ACI and other cloud assets such as the Tetration Analytics platform.

Cisco’s data center revenue accounted for 6.7% of Cisco’s total revenue in 2017 compared to 5.3% in 2016, 8.5% in 2015, 7.3% in 2014, and 5.5% in 2013.


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