Cisco (CSCO) Joins Forces With T-Mobile to Boost Prospects
Cisco Systems CSCO recently announced its partnership with T-Mobile TMUS to launch the world’s largest highly scalable and distributed nationwide cloud native converged core gateway.
T-Mobile moved its 5G and 4G traffic to the new cloud-native core gateway boosting performance for customers with more than a 10% improvement in speed and latency.
The world is going through its fourth industrial revolution, which is data-driven and a primary reason behind the rise of Internet of Things (IoT). Various enterprises are investing heavily to rapidly digitize their organizations, reflecting the shift to IoT, Artificial Intelligence (AI) Machine Learning (ML), digitization and various cloud solutions.
The recent partnership with T-Mobile 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-consensus-chart | Cisco Systems, Inc. Quote
Cisco Banking on Partnerships to Address Megatrends
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 34.8% in the year-to-date period and pulled down the stock price performance of Cisco, which fell 24.6% 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, 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.
Cisco has been building strategic partnerships to build its portfolio. It recently announced its partnership 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. This partnership will help the company to spread its recently unveiled solutions across Europe and drive top-line growth.
Cisco partnered with Microsoft MSFT to bring Microsoft Teams to its 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, with its recent product launches and strategic alliances, is trying to address what the global economy needs right now, which is likely to drive the stock in the long run.
CSCO 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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