Networking equipment maker Cisco Systems Inc. (CSCO - Analyst Report) has been selected by privately- owned web hosting provider, OVH.com to provide its Aggregation Services Router (ASR) 9000 Series for expansion of its Internet Protocol (IP) network in cloud-based services.
Roubaix, France-based OVH was founded by Octave Klaba in 1999. It provides dedicated servers, mutual hosting, domain names and VOIP telephony services. It owns 150,000 dedicated servers in 12 data centers. OVH.com through its own infrastructure provides high-speed connections globally.
Cisco’s router will provide highly resilient IP connectivity, which will be able to support OVH’s entire network. Further, OVH will be able to provide speeds of up to 2 Tbps in Europe and 8 Tbps in the U.S. Thus, Cisco’s ASR may be able to support different types of traffic without any delays and hindrances, which is quite critical in transferring video and audio files.
According to the Cisco Visual Networking Index, IP traffic may grow at a compound annual growth rate (CAGR) of 23% from 2012 to 2017. Further, global IP traffic may surpass 1.4 zettabytes by 2017.
Cisco is one of the largest providers IP networking gear, particularly routers and switches. Routers help in transferring data, voice and video from one IP network to another. The company, through its router business, is well positioned to capture such high growth in IP data traffic. This might prove beneficial for Cisco, given its product portfolio and broad reach across geographies.
Cisco’s revenues in the second quarter of fiscal 2013 increased 1.7% sequentially and 5.2% year over year to $12.1 billion. Products (78.0% of total revenue) were up 3.3% year over year to $9.4 billion. Services (22.0% of total revenue) jumped 12.5% year over year to $2.7 billion.
Cisco carries a Zacks Rank #2 (Buy). Other companies in the sector that also look attractive include Infinera Corp. (INFN - Snapshot Report), Silicom Ltd. and Juniper Networks (JNPR - Analyst Report). While Infinera Corp. and Silicom carry a Zacks Rank #2 (Buy), Juniper carries a Zacks Rank #3 (Hold).