Cisco Systems CEO John Chambers, during a Q4 2012 earnings call yesterday, said the networking company expects to gain more share of wallet in the service provider market -- especially in routing, where Cisco (NASDAQ: CSCO) competes vs Juniper Networks (NYSE: JNPR) But does Chambers expect service providers to spend more on technology in the second half of 2012 vs. the first half of 2012? Here's the answer.
First, a point of clarification: Cisco is currently in its fiscal Q1 2013. But during the earnings call, Chambers described how expects service provider spending to perform in July-August 2012 vs. January-July 2012.
"So, what we’re seeing in the service provider business...we believe we’re taking very good share of wallet spend and we've got to win that everyday....I think AT&T today said that their capital spending in second half of the year would be up over the first half of the year, that’s what we were expecting from them."Translation: Chambers is sounding cautiously optimistic about the service provider market. But let's not declare victory quite yet. Chambers said the service provider market is mixed across the U.S. Plus, Chambers is worried about the top five or six service providers in Europe, where spending may not be quite as healthy as some people had hoped around six months ago.
Still, Chambers likes how Cisco is performing vs. rival suppliers in the service provider market. He told Wall Street analysts to look at "the success of our service provider business, where we’ve moved from an individual product provider in today’s market where many of our customers use Cisco as their best strategic partner, and being their top business and technology objectives. It is a clear example of our strategy playing out to our advantage."
Much later in the earnings call, during a Q&A with analysts, Chambers took this indirect shot at Juniper Networks.
"Overall, in service providers, we’re positioned extremely well, balanced dramatically different across the three [international] theaters, and we think we will gain share of wallet as we go forward versus almost all of our peers, especially in the routing segment, where we were real pleased about how much share we’ve taken."Read between the lines and Chambers is predicting service provider wins against Juniper. But let's not forget that Juniper isn't standing still.