Cisco Cuts Long-Term Growth Outlook, But Says 'Big Deals Are Back'

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Despite the challenges it faces in its service provider and emerging markets segments, Cisco is seeing a significant bounce-back in its U.S. enterprise business, Chambers said, along with a healthy pipeline for its Application-Centric Infrastructure (ACI), the fabric-based data center architecture, and Cisco's flagship technology for software-defined networking, launched last month.

"The U.S. enterprise pipeline in $1 million deals, $2 million deals and $5 million deals was up well over 20 percent in each category," Chambers said of Cisco's first fiscal quarter, and moving into the second quarter. "The big deals are back."

Chambers attributed this to Cisco channel partners, and to the company's focus on selling into the business, not just IT.

Meanwhile, Chambers said Cisco, which he referred to as the "logical leader" in the SDN space, is starting to see an uptick in customer interest around ACI and the new Nexus 9000 switching line that supports it. Chambers said Cisco has built up 305 "serious customers" in its ACI pipeline since the product launch five weeks ago, with three of those deals ranging between $40 million and $100 million in value. He also said those customers vary in terms of geography, size and type.

"You watch how quickly we ramp up in terms of opportunities in this market," Chamber said.

Kent MacDonald, vice president of converged infrastructure at solution provider and Cisco Gold Partner Long View Systems, said most of his customers are still early on in their SDN deployments, but that many already have expressed an interest in ACI.

"We are still in the early days, but it is getting much more real in regard to our account engagement and talking about ACI and where the Nexus 9000 plays. It has been a positive reception," MacDonald told CRN. "I would say in 2014 we will start seeing the financial benefits and network benefits of that technology."


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