Cisco sees Web 2.0 boom after posting strong Q4

Cisco Systems Inc. expects Web 2.0 to drive a growth curve similar to the Internet expansion of the 1990s, accelerating the company’s revenue growth, chairman and CEO John Chambers said Tuesday as Cisco announced strong fourth-quarter numbers.

Emerging technologies that allow collaboration, especially video, make this time like the early 1990s in terms of the networking company’s prospects for growth, said Chambers. Cisco sees Web 2.0 driving demand for both network capacity, which its equipment provides, and tools such as hosted applications, which it is starting to sell.

The news was already good from Cisco’s fiscal fourth quarter, which ended July 28. The company’s revenue rose 18 per cent from a year earlier to US$9.4 billion while its earnings per share grew 24 per cent to US$0.31. Net income was US$1.9 billion. Cisco forecast revenue between US$9.45 billion and US$9.55 billion for the current quarter.

The growth was balanced across customer segments, product groups and regions of the world, Chambers said. However, the company’s advanced technologies, including security, storage and unified communications, outshone traditional routing and switching revenue with a 24 per cent increase. And emerging markets led Cisco’s growth rate in orders, with the Middle East and Africa together showing a 50 per cent increase from a year earlier. Overall order growth in the U.S. was in the upper teens, led by service-provider investments, and enterprise network buying rebounded in the quarter, Cisco said.

Web 2.0 technologies, such as the Web conferencing service Cisco acquired with its purchase of WebEx earlier this year, are the second wave of the Internet and could drive growth at Cisco for a decade, Chambers said.

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Jim Love, Chief Content Officer, IT World Canada

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