Cisco to remain aggressive in 2010

Cisco is expected to remain aggressive in 2010 as it looks to take back lost market share. The company will build on its generous financing for SMBs, continue to set the industry pace in mergers and acquisitions, and leverage its formidable cash position – greater than $20 billion post- Tandberg and Starent acquisitions – in an effort to pull away from competitors, according to investment firm UBS.

Cisco recently announced a three-year, 0% financing incentive for SMBs in the US. The financing offer applies to all Cisco products and services from $1,000 up to $250,000. It is available through Cisco Certified Partners until July 31.

Cisco also said it would, in 2010, maintain its pace of mergers and acquisitions. It acquired six companies last year, four of which were purchased between May 2009 and the end of the year. They included Tandberg ($3.4 billion), Starent ($2.9 billion), and Pure Digital ($590 million).

It helped that Cisco had, at that time, $30 billion in cash. It helps that over $20 billion of that remains, according to UBS estimates.

All of this has UBS expecting in-line or better results from Cisco for its second quarter of fiscal 2010, which it reports tomorrow. The Street is expecting revenue of $9.4 billion and earnings of $.35 per share; UBS expects slightly better revenue — $9.41 billion – and slightly less EPS: $.34.

Results will be driven by strength in US service provider and enterprise sales, and improved IT spending overall. UBS expects Cisco to end fiscal 2010 with $38.4 billion in sales, and fiscal 2011 with $43.5 billion. Starent will contribute $220 million and $452 million, respectively, according to UBS estimates.

From: Network World

Juniper’s Q4 might mean an upbeat Q2 for Cisco

Juniper’s blow out Q4 may portend a stellar quarter from rival Cisco as well. Cisco reports next Tuesday and some analysts expect the company to come in ahead of estimates.

Meanwhile, Juniper’s strength was due largely to service providers, sales in the Americas, and yes, some enterprise growth year-over-year – but sequentially, enterprise was essentially flat. AT&T was better than 10% of Juniper’s sales in the quarter and sales to service providers grew 22% sequentially.

In a bulletin on the quarter, Oppenheimer & Co. analyst Ittai Kidron states that AT&T may have been responsible for better than 50% of Juniper’s sequential sales growth in the quarter.

Sales in the Americas also grew 22% from Q3 and service providers gobbled up almost one-third of Juniper’s $246 million in Service Layer Technology sales in the quarter.

Though enterprise only grew 1% sequentially, it did grow 5% year-over-year and 11% for the full year. Sales of Juniper’s EX LAN switches were up 47% sequentially to $74 million and the SRX security gateway grew 38% from Q3.

For Q1 2010, Juniper is guiding toward sales of $880 million to $910 million, and earnings per share of $0.23-$0.26. This is better than Wall Street consensus estimates of 873.2 million and $0.24, but a dip from the $941 million and $.32 results for Q4.

Oppenheimer’s Kidron is nonetheless upbeat on the guidance:

We’re…pleased with 1Q10 guidance, which tops our prior and Street expectations and is supported by strong deferred revenues. Importantly, management’s commentary on 2010 was upbeat with Juniper aiming to exceed the growth of its addressable markets, gain share and expand operating margins at the same time. Juniper’s growth story continues to play out well with IBM/Dell set to contribute more in 2010…Juniper plans to gain share and surpass 2010 market growth.

Juniper plans to grow market share 12% to 15% in service providers in 2010, and in enterprise in the mid-single digits.

Avian Securities’ Catharine Trebnick found Juniper’s guidance targets “mediocre.” In a report on the quarter, she remains negative on Juniper:

Our cautious stance remains predicated on longer term challenges in the service provider segment we attribute to three key trends: (1) Operators shift toward less expensive Ethernet platforms and this is driving down price per port for routers; (2) JNPR is missing key partnerships for packet optical networks with key RFP’s underway (Verizon Packet Optical RFP), and (3) JNPR still lacks wireless DNA and project Falcon timing is available after key LTE supplier decisions. In addition we believe that the HPQ/3COM merger has the potential to squeeze JNPR’s efforts, which currently is benefiting from strong growth in managed services and DC upgrades for 10 GigE ports.

Lazard Capital Markets also found that Juniper’s guidance “implies a steeper sequential decline than expected.”

Cisco backdoor still open

The “backdoors” that Cisco and other networking companies implement in their routers and switches for lawful intercept are front and center again at this week’s Black Hat security conference. A few years ago, they were cause celebre in some VoIP wiretapping arguments and court rulings.

This time, an IBM researcher told Black Hat conference attendees that these openings can still expose information about us to hackers and allow them to “watch” our Internet activity. Backdoors are implemented in routers and switches so law enforcement officials can track the Internet communications and activity of an individual or individuals under surveillance. They are required by law to be incorporated in devices manufactured by networking companies and sold to ISPs.

In this report from Forbes, IBM Internet Security Systems researcher Tom Cross demonstrated how easily the backdoor in Cisco IOS can be exploited by hackers. When they gain access to a Cisco router, they are not blocked after multiple failed access attempts nor is an alert sent to an administrator. Any data collected through the backdoor can be sent to anywhere — not just merely to an authorized user, Forbes reports.

What’s more, an ISP is not able to perform an audit trail on whoever tried to gain access to a router through the backdoor – that nuance was intended to keep ISP employees from detecting the intercept and inadvertently tipping off the individual under surveillance. But according to IBM’s Cross, any authorized employee can use it for unauthorized surveillance of users and those privacy violations cannot be tracked by the ISP.

Cisco said it is aware of Cross’s assertions and is taking them under consideration. To Cisco’s credit, it is the only networking company that makes its lawful intercept architecture public, according to the recommendations of the IETF, the Forbes story states. Other companies do not, which means they may be susceptible to the same security flaws, or worse.

How to choose the right Cisco switches for your LAN

It seems like one of the major tasks that I have been doing on a daily basis for the last ten years is creating network designs for people. Since a large part of the business that my company does is put in place a complete IP phone system into organizations that have between 50 and 3000 users, me and the other design guys create a lot of designs.

Most organizations do not upgrade their LAN to prepare for the future – most of them don’t touch the network as long as it is running properly and supporting the user’s applications. When starting the planning process for putting a secure voice system on the network, that takes the network requirements to another level.

There is a lot more to consider than QoS for putting voice on the LAN, although that is what the discussion is usually centered around. The LAN also has to have a number of other attributes:

Secure – with voice on the LAN, the switches must have security features that can prevent them from getting attacked with MAC address floods, rogue DHCP servers, gratuitous ARP’s changing the default gateway, and other attacks that can be launched by malware.

Fast – If voice goes through multiple switches, each hop can add latency. Instead of store and forward of the ethernet frames, switches should use cut-through to move things along. Server and uplink speeds should be gigabit, while for most organizations 10/100 Mbsp to the desktop is just fine.

QoS – As discussed above. This comes into play mostly in uplinks. When remote access layer closets are connected back to the distribution layer, there is a choke point in the LAN. Any choke points require queuing to prioritize the voice.

Reliable – Long Mean Time Between Failure, well tested code to limit bugs, good support from the manufacturer in case there is a software or hardware issue.

Managable – The switches have to be able to be managed remotely, have SNMP information, be able to log, and be configurable. GUI interfaces are ok, but there is nothing like a solid command line interface for rapid configuration, troubleshooting, and repair.

Power Density– Switches have to be able to support the power density of the planned devices. Most switches can not power all ports at the highest levels.

Power and Cooling – Since IP phones are powered from the switches, all access layer switches will require properly sized UPS’s. A basic switch consumes about 60 Watts. A 48 port switch with 15 Watt phones plugged into every port will require at least 600 Watts. Put a few of those switches in the closet an you are looking at not only a much bigger UPS, but also better cooling.

Redundant Design – The only place that there should be a single point of failure is at the access layer in the closets. If a switch fails, only the devices connected to that switch should lose connectivity – all others should work around the issue. In most cases that means dual uplinks from each closet to a redundant distribution layer at the core.

Why Choose Cisco Network Equipment

Today’s businesses require a network platform that enables technology innovation and business-critical services across the entire network. Cisco stands alone in its ability to provide an end-to-end network platform tied together by a common infrastructure and a common operating system, and manageable as a single, cohesive entity.

Only Cisco can provide the platform for campus, branch, data center, and wide-area networks that are highly available while integrating security at all levels of the network, helping to ensure the optimized delivery of application and communications, and providing inherent manageability. This platform includes:

Reliability: Cisco Systems has earned it’s solid reputation by producing network equipment that “shows up for work everyday”, but there is more than just uptime making Cisco the premier network gear provider worldwide. Advanced features like remote management, Quality of Service and Voice Over IP support make it the ONLY solution, like Swift Systems, that you can grow into but not out of.

Interoperability: Cisco provides legendary interoperability, providing real assurance that your investment in Cisco gear is ready for whatever tomorrow brings.

Scalability: Cisco solutions easily scale from Small Business Start-ups that want reliable managed workgroup switches to Enterprise-class Corporations that demand flawless uptime, need secure wireless networks, managed layer 2 and 3 switches, dependable routing, firewalls, intrusion detection systems, and the software to manage it all.

Manageability: Managed switches provide remarkably better uptime as a result of enhanced diagnostics, allowing trained engineers to isolate network problems in a fraction of the time required with old-fashioned hunt and pluck troubleshooting. Router management features allow sophisticated configuration, utilization tracking, and diagnostics. Advanced features, like BGP enable non-stop Internet connectivity, and really separate Cisco from the pack.