Cisco's top brass have again shown they have Huawei on their minds, talking extensively about the competition and in particular their response to the growth of their Chinese rival on a conference call marking the end of Cisco's third quarter.
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Outspoken CEO John Chambers made no reference to the statements he made last month when he suggested Huawei was playing fast and loose with the IP of others, instead sailing a more positive tack and speaking of Cisco's history in terms of meeting competitive challenges.
Chambers said that in the 20 years he has been at Cisco, the firm has come out stronger against key competitors such as Dell, IBM and Microsoft when they tried to "come at us and unseat us."
He also referred to Cisco's response to HP's acquisition of 3Com and the subsequent ramp up of its networking activities, saying Cisco and its channel had largely beaten back this challenge.
"HP switching is back to where it was when they bought 3Com. This is a huge market share protection. So if we execute right, and I expect us to, I think you're going to find we are very tough versus Huawei," said Chambers.
It was left to worldwide operations executive vice president Rob Lloyd to really stick the boot in, saying: "A lot of customers that have now had a couple of years' experience with Huawei, are discovering that cheap at the beginning isn't so cheap after all.
"Their programme of putting on-site resources for development is leading to lock in, and many customers who are now seeing increases in their pricing are returning to Cisco," he continued.
Lloyd tabled the idea that with the growth in cloud computing, the need to have a strong play when it comes to privacy of customer information and data protection means that "integrity is everything."
"That's not the forte of Huawei. And as they examine partnerships to enter markets around the world, this integrity gap is clearly recognised by our partners, and that's being reflected in their lack of success so far in penetrating the value channels that Cisco takes to market," said Lloyd.
Chambers added: "Watch Huawei's numbers. They were 11% up year-over-year, and they're getting into everything from tablets to servers to datacentres to traditional networking, and we'll see if they get themselves spread too thin."
In spite of posting solid growth in both revenues and net profit Cisco stock took a battering after the networking bellwether's fourth quarter guidance came in substantially below analyst expectations.
The firm booked sales of $11.6bn (£7.2bn) in its fiscal Q3, up 7% year-on-year, while net profit was up an impressive 20% to $2.2bn, a clear indicator that Cisco is getting over the troubles that affected it in the past 12 months.
However, it now expects growth rates to decline in fiscal Q4, with sales predicted to be just 2% to 5% higher than last year - market watchers were hoping for 7% - and earnings per share of between $0.44 and $0.46, three cents lower than Wall Street's view.
On the conference call, Chambers said he saw an "uncertain" view of the market from many enterprise and service provider customers, although he said this was not to say another downturn was imminent, and suspected many of them would begin to open their wallets again in the second half of calender 2012.
"Right now I'd classify it as uncertainty and looking to see more certainty on the global economy and in Europe and secondly, more certainty in terms of government policies that can have major impacts on their business," he said. "We sure don't like the trend in the enterprise IT spending, although we think in our product areas, we control our own destiny in terms of share of market."
Conference call transcript courtesy: Seeking Alpha