Cisco Systems, Inc. and Oracle are currently in the pace of transitions, so which offers investors the utmost upside?
Chuck Robbins, Cisco’s CEO aims at transforming the company into a cloud and Internet of Things from an enterprise-based, “old-school” solutions provider like many other tech industry giants.
Robbins’ move to put the network giant into the 21st century is already expected, suggesting IoT-related devices and services is anticipated to become a market worth multitrillion-dollar in the next years.
It appears that IoT and technologies relative to networking are expected to be housed in the cloud, based on data records. Meanwhile, among other titans, Oracle continued fighting for its share and it’s likely to become a very large market.
Subsequently, Oracle’s delivering industry, Software-as-a-Service (SaaS) is recognized to lead the company into a real opportunity. It is a market that is anticipated to generate more than $100 billion in revenue this year.
Both networking giants are at the core of substantial business transitions, and it’s a close call of which of the two is offering investors the most potential upside. However, one involves a slight edge.
After its fiscal 2016 earnings for the second quarter was released on Feb. 10, price per share rallied by about 20%, suggesting that investors liked what they heard. The network giant’s revenue rallied 2% to $11.8 billion, excluding the unit of now-divested video – on the peak level of Cisco’s direction for the quarter led by boost in service sales and rose 3% year over year.
The service revenue results of Cisco are particularly serious in that of Robbin’s main objective in order to increase recurring revenue through software, sales of service. He added that one-time product offerings should not involve in a full time reliance.
Cisco’s deferred revenue climbed 8% to $15.2 billion last quarter, led by increase in pop in subscription offerings and software sales by 11%.
Furthermore, Cisco’s highlights on smart cities were forecasted to be over $1.3 trillion market in the next three years, considering it as one of the fast-growing sectors in IoT market, which could really pay off. Ahead of the acquisition of Jasper Technologies, it has spoken to Cisco about its strong engagement in cloud-based IoT, citing efforts. CEO, John Chambers started before his departure.
Apparently, though Cisco’s revenue for the last quarter has increased at the same time continued to invest to a new cloud and IoT markets, its gross and product margins both expanded fueled by declining operating expenses.
As there’s a new expansion, including high growth in markets while the company becomes more efficient, cost-effective firm is a perfect combination, and a shareholder will surely benefit from it.
Same with other technology industry ilk, Oracle engaged on the fast-growing pace to the cloud. A chairman, Larry Ellison said, the Oracle was already "selling more enterprise SaaS and Platform-as-a-Service [PaaS] new cloud revenue than any other company in the world."
It appears that there’s a slight stretch on that Oracle’s worth $735 million cloud-related revenue in the last quarter, which doesn’t stand up to the Microsofts of the world with its annual cloud revenue over $9.4 billion. However, it has a 40% progress than Oracle’s in the prior year.
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