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Cisco (CSCO) Joins Forces With OTEGLOBE to Boost Prospects

Cisco Systems CSCO recently announced that it has partnered with OTEGLOBE to increase the capacity and performance of its network to deliver faster, more efficient connections to its customers with a full-scale, 800G-ready infrastructure.

OTEGLOBE is the international wholesale arm of OTE Group and is a network backbone operator operating throughout Southeastern and Western Europe. OTEGLOBE is using Cisco’s new 8800 series routers powered by Cisco Silicon One to be fully ready for 800G in the coming six months.

Cisco’s partnership with OTEGLOBE will help the company to spread its recently unveiled solutions across Europe and drive top-line growth.

Cisco has launched its new 800G platforms, Nexus 9232E and Cisco 8111, powered by Silicon One G100 to support high-performance connectivity demands, such as bandwidth-intensive AI/ML clusters, and for the seamless performance of multi-level data center fabrics operating both in the public and private cloud.

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The recent partnership with OTEGLOBE is amongst its various strategic alliances with global tech companies, which will help Cisco to address growing megatrends and spread its newly launched solutions globally.

Cisco Systems, Inc. Price and Consensus

Cisco Systems, Inc. Price and Consensus
Cisco Systems, Inc. Price and Consensus

Cisco Systems, Inc. price-consensus-chart | Cisco Systems, Inc. Quote

Cisco Banks on Strategic Partnerships to Boost Prospects

Cisco shares have been impacted by the overall negative sentiments among investors for the broader tech sector. Rising inflation and recession in the United States have investors bearish regarding the performance of the Zacks Computer and Technology sector, which fell 33.2% in the year-to-date period and pulled down the stock price performance of Cisco, which fell 22.2% in the same period.

Further, as it ventures into new markets, Cisco is experiencing stiff competition from the likes of Wipro Limited WIT in cloud securities solutions.

Wipro recently expanded its collaboration with VMware to help customers move data to the cloud at a reduced cost and operate in a multi-cloud infrastructure.

With the recent collaboration, Wipro FullStride cloud services will be able to provide its security services to customers for no additional cost and protect data while operating in a multi-cloud architecture. This is expected to help Wipro garner more customers amid rising competition.

However, as the world is going through its fourth industrial revolution, which is data-driven and a primary reason behind the rise of the Internet of Things (IoT), various enterprises are investing heavily to rapidly digitize their organizations, reflecting the shift to IoT, Artificial Intelligence (AI) and Machine Learning (ML).

The rapid shift to these high-bandwidth and low latency applications like AI or ML, virtual and augmented reality reflects the need for 800G capacity and to connect multiple data center buildings at high data rates.

Per Gartner, worldwide spending for cloud solutions is expected to reach $500 billion in 2022. This will create a new revenue source in the industry. Cisco is investing heavily to build its portfolio to support cloud data centers, which is expected to generate positive ROI and win market share against stiff competition.

As such, the recent partnership with OTGLOBE will help address the demand for 800G capacity across Europe.

To benefit from other megatrends, Cisco partnered with Microsoft MSFT, which will bring Microsoft Teams to the former’s meeting room devices. Per the alliance, Cisco and Microsoft Teams will soon offer the ability to run Microsoft Teams natively on Cisco’s room and desk devices from the first half of 2023. Initially, six of CSCO’s most popular meeting devices like Cisco Room Bar, Board Pro and Cisco Room Kit Pro will be certified by Microsoft Teams, followed by Cisco Desk Pro and Cisco Room Navigator.

Cisco has formed this partnership with Microsoft to benefit from the growing market demand for a hybrid work environment. Microsoft Teams is experiencing growing usage, which will help Cisco expand its customer base in the enterprise communication space. Per Industry Research data, the enterprise market is expected to witness a CAGR of 17.3% between 2022 and 2028.

Cisco also expanded its business partnership with General Dynamics Information Technology, a business unit of General Dynamics GD.

GD is helping Cisco to maintain its position as the largest player in the networking space. The two companies have collaborated to deliver Cisco Private 5G services to various government enterprises for IoT and edge use cases.

Cisco, with its recent product launches and strategic alliances, is trying to address what the global economy needs right now, which will drive the stock in the long run.

Cisco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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