Cisco Profit Up 25%; Routers and Switches in Demand

SAN FRANCISCO, Aug. 7 (AP) — Profit at Cisco Systems jumped 25 percent in its fiscal fourth quarter as the company, which makes network equipment, continued to have strong sales of the routers and switches that direct traffic over the Internet.

Cisco shares jumped more than 5 percent on an improved financial forecast.

Net income for the period that ended July 28 was $1.93 billion, or 31 cents a share, compared with $1.54 billion, or 25 cents a share, during the quarter a year ago.

Excluding one-time charges, Cisco earned 36 cents a share, a penny above the estimate of analysts surveyed by Thomson Financial.

Revenue for the period was $9.43 billion, an 18 percent increase from the $7.98 billion in sales Cisco rang up last year. The revenue also beat Wall Street’s estimate, which was for $9.29 billion in sales.

In a conference call with analysts, Cisco’s chief executive, John T. Chambers, said the company was raising its revenue forecast to 13 percent to 16 percent growth for 2008 over 2007. For the current quarter, the company expects revenue of $9.45 billion to $9.55 billion, above the average analyst estimate of $9.39 billion.

Mr. Chambers also announced that the chief financial officer, Dennis D. Powell, would retire at the end of the second quarter of the current fiscal year. His successor will be Frank Calderoni, currently a Cisco senior vice president.

Cisco, based in San Jose, Calif., is profiting from widespread network upgrades as Internet service providers and other companies increase capacity to handle increasingly bandwidth-heavy downloads, particularly video.

Some analysts have expressed concerns, however, about whether Cisco can keep up its rapid growth. Investors have been particularly worried in the last couple of quarters about a slowdown in one of Cisco’s critical businesses — orders from United States businesses — whose growth plunged to mid-single-digit rates. That segment rebounded in the fourth quarter, growing about 12 percent over last year.

Cisco is also growing by moving beyond its roots as purely a maker of networking gear. During the fourth quarter, the company completed its $3.2 billion acquisition of an online meeting company, WebEx Communications, and the $830 million takeover of IronPort Systems, a maker of security products.

Shares of Cisco were up $1.74, or nearly 6 percent, to $31.43 in after-hours trading. Before the earnings were released, Cisco’s stock price closed up 19 cents at $29.69.

Link:www.nytimes.com

Computer networking

Computer networking is the engineering discipline concerned with communication between computer systems or devices. Networking, routers, routing protocols, and networking over the public Internet have their specifications defined in documents called RFCs.

Communicating computer systems constitute a computer network and these networks generally involve at least two devices capable of being networked with at least one usually being a computer. The devices can be separated by a few meters (e.g. via Bluetooth) or nearly unlimited distances (e.g. via the Internet). Computer networking is sometimes considered a sub-discipline of telecommunications, and sometimes of computer science, information technology and computer engineering. Computer networks rely heavily upon the theoretical and practical application of these scientific and engineering disciplines.

A computer network is any set of computers or devices connected to each other. Examples of networks are the Internet, or a small home local area network (LAN) with two computers connected with standard networking cables connecting to a network interface card in each computer. All modern aspects of the Public Switched Telephone Network (PSTN) are computer-controlled, and telephony increasingly runs over the Internet Protocol, although not necessarily the public Internet.

Views of networks

Users and network administrators often have different views of their networks. Often, users that share printers and some servers form a workgroup, which usually means they are in the same geographic location and are on the same LAN. A community of interest has less of a connotation of being in a local area, and should be thought of as a set of arbitrarily located users who share a set of servers, and possibly also communicate via peer-to-peer technologies.

Network administrators see networks from both physical and logical perspectives. The physical perspective involves geographic locations, physical cabling, and the network elements (e.g., routers, bridges and application layer gateways that interconnect the physical media. Logical networks, called, in the TCP/IP architecture, subnets , map onto one or more physical media. For example, a common practice in a campus of buildings is to make a set of LAN cables in each building appear to be a common subnet, using virtual LAN (VLAN) technology.

Both users and administrators will be aware, to varying extents, of the trust and scope characteristics of a network. Again using TCP/IP architectural terminology, an intranet is a community of interest under common administration, usually in the same enterprise. An extranet creates a community of interest that spans multiple enterprises and usually involves multiple administrators, but is not accessible by arbitrary users of the public Internet.

Informally, the Internet is the set of users, enterprises,and content providers that are interconnected by Internet Service Providers (ISP). From an engineering standpoint, the Internet is the set of subnets, and aggregates of subnets, which share the registered IP address space and exchange information about the reachability of those IP addresses using the Border Gateway Protocol. Typically, the human-readable names of servers are translated to IP addresses, transparently to users, via the directory function of the Domain Name System (DNS).

Over the Internet, there can be business-to-business (B2B), business-to-consumer (B2C) and consumer-to-consumer (C2C) communications. Especially when money or sensitive information is exchanged, the communications are apt to be secured by some form of communications security mechanism. Intranets and extranets can be securely superimposed onto the Internet, without any access by general Internet users, using secure Virtual Private Network (VPN) technology.

Cisco to Build Social Networks for Others

Cisco wants in on the social networking pie. It’s announced its plans for creating social networking websites for other companies at the Web 2.0 Conference this week, in what looks to be a white label offering.

With its acquisition of Five Across Inc., a company that offers website creation tools, and the technology from social network Tribe, it’s clear that Cisco is looking to social networking as a substantial stream of revenue. And not for its own social network, but for those businesses that would like to create social networking options to present to end users. The NHL is already a client of Five Across Inc., and has a social network for users to meet and share online, which reportedly gains more traffic than its main website.

Sponsorship of MTV’s Digital Incubator and investment in TokBox and BlackArrow also indicate a heavy interest in the development of online networks and applications. No details have been given regarding Cisco’s plans for the software, but with all the other networks opening their platform, perhaps Cisco could be in a position to offer an aggregated solution for distributing applications across its white label networks. Someone will do it soon.

At any rate, Cisco’s announcement follows those made at the conference by MySpace and Microsoft earlier this week, with plans for an open platform and the acquisition of 20 companies per year, respectively.