Network equipment maker Cisco reported stronger than expected quarterly revenue and profits as demand for switching equipment and routers picked up.
Cisco has been trying to move towards a new cycle of high-end switches and routers.
Its switching business, which makes products that handle traffic at large internet data centres, netted 39 percent of Cisco’s total hardware revenue in 2014, while the router business accounted for about 21.2 percent.
This means that the outfit is seeing robust switching sales, which is good news for other outfits in the sector such as Infoblox, Gigamon and F5 Networks which should also be doing well.
Rvenue from Cisco’s hardware business rose 7.8 percent to $9.08 billion in the company’s second quarter ended Jan. 24.
Revenue from services, which includes the company’s software and cloud offerings, rose 4.6 percent to $2.86 billion.
So analysts think that Cisco has put the worst behind it and should start returning to the days when it was a blue chip investment.
Chief Executive John Chambers said that the quarter showed the best balance of growth across all of the company’s geographies, products and segments,.
Cisco said its net profit rose to $2.4 billion in the quarter from $1.43 billion, a year earlier. Total revenue rose seven percent to $11.94 billion.
Analysts on average had expected a revenue of $11.8 billion.
Kramer added that while Cisco has made progress in the second quarter, the company will continue to be affected by headwinds from emerging markets and telecom service providers.
The company also forecast revenue growth of 3-5 percent.
The worldwide web is slowing down as routers start to forget about some parts of the internet.
Internet speeds are slowing and some sites would not load because Border Gateway Protocol (BGP) routing tables have hit the limit, and older routers are failing.
Many tier-one internet service providers (ISPs), and in turn, the last mile ISPs they support are providing bad service throughout the US and some parts of Canada.
Level 3, AT&T, Cogent, Sprint, Verizon, and others have suffered from serious performance problems at various times on yesterday and it is likely to get worse.
Some Web hosting companies, such as LiquidWeb, and its sites have been effectively knocked offline.
BGP is the routing protocol used to share the master routes, or map, of the internet. Some routers have to process 512K routes which is much more than they were designed to handle. Some old hardware and software is just crashing or ignore newly learned routes in protest.
Internet engineers knew this problem was coming was early as May and predicted that something unpleasant was going to hit the fan in August. In fact, they were lucky that it did peak in August as most of Europe is closed.
It is strange that the telcos did not heed the warning, rush out, and buy some newer routers. Apparently, they were too busy fiddling or something. So it looks like telcos and ISPs are having to call their engineers back off their hols to fix the problem. However, it does mean that the internet is going to be rubbish for a couple of weeks.