Cisco sees silver lining in cloud take up in Africa


Cisco has released its results and analysts believe the network company is focused on the increased uptake of cloud computing across Africa going forward.

An ICT research analyst from Frost & Sullivan has reiterated the strategic importance of a projected increase in cloud computing in key markets throughout Africa to global networking company Cisco.

Cisco released its Q2 2014 results yesterday. Cisco reported second quarter revenue of $11.2 billion, net income on a generally accepted accounting principles (GAAP) basis of $1.4 billion or $0.27 per share, and non-GAAP net income of $2.5 billion or $0.47 per share. This was a 7.8 percent decrease in revenue, 54.5 percent decrease in net income & 54.2 percent decrease in earnings per share respectively from Q2 2013. This is predominantly attributed to an inconsistent macro economic environment in emerging markets and soft software-defined networks (SDNs) gradually gaining in prominence.

“Cisco is well positioned for growth in 2014 due to the transformation of its IT offering by delivering Application Centric Infrastructure (ACI), new professional services, and an open ecosystem of partners to assist customers with launching their applications and enabling greater business responsiveness,” notes Frost & Sullivan Information and Communication Technologies Research Analyst, Ankit Trivedi. “In particular, the Application Centric Infrastructure (ACI) is predicted to be a large revenue spinner as consistency and high performance of applications will be vital to the CIOs ability to deliver new products and services, manage compliance and governance, mitigate risk and security threats, empower employees, and drive productivity into their organisations.”

Cisco Systems Inc. has entered into patent cross-license agreements with Samsung Electronics Co., Ltd, Google and Kudelski SA. This would allow the companies to gain access to each other’s patent portfolios, which cover a broad range of products and technologies. The mutually beneficial “long-term” agreement covers the companies’ existing patents, as well as those which will be filed in the future, and is an effective way to help prevent unnecessary patent lawsuits, placing focus instead on innovation for future products and services.

Aligned to its buy, build and partner innovation strategy, Cisco Systems Inc. completed the acquisition of privately held Insieme Networks, a San Jose-based company focused on the development of application-centric infrastructure products in the data centre on 10th December 2013.

In addition, Cisco announced the acquisition of on 17th December, 2013, a cloud-based team collaboration platform that unifies messaging, document sharing, and task management in a single, easy-to-use mobile app for iPhone, Android and the Web. Collaborate’s cloud, mobile, and web software capabilities shall enable Cisco to extend and integrate its collaboration and communications platform. The acquisition of Collaborate, headquartered in Boston, MA, represents a natural evolution of Cisco’s next generation collaboration platform.

“Africa offers much growth potential for Cisco due to the uptake of cloud computing. In 2013, around 40 percent of South African medium and large businesses were using cloud services, with significantly lower uptake in Kenya and Nigeria, those markets are set to rise in 2014 as more businesses attempt to harness the power of computer networks, making them more efficient and competitive. Cisco is well positioned to take advantage of this market stage as it has already evolved its solution distribution model for sub-Saharan Africa, bringing cost, time to market and support benefits to distributors, resellers and customers’ alike.” says Trivedi.

Going forward, it is expected that Cisco Systems Inc. shall leverage its recent Insieme acquisition to bolster its SDN portfolio and focus on margins to tide over near term concerns. The fundamental demand for data, cloud computing and mobility solutions continues to be strong, and Cisco’s continuing investments in emerging markets position it well in high-growth markets when macro concerns subside.