Cisco: Certain to Benefit From Internet Of Everything Market

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Mar 31, 2015

IOE (Internet of Everything) is a new evolution of internet and we are heading to see how internet further changes the world. Cisco (CSCO, Financial) is a market leader in providing network solutions and is all set to gain from this new evolution of internet technology stated as IOE. The anticipated market for the IOE is forested to reach $14.4 trillion as net profit between 2013 and 2022 globally. Investors that eye technology stocks can always be interested in companies like Cisco, as it is on tracks to benefit from IOE market. The existing product portfolio of Cisco will be in demand as the IOE awareness and its market matures with time to come.

Internet for Everything creates fresh market that is to be grabbed

Internet has changed the definition of doing business; moreover it also leverages in transitions and improving the world. In the era of IOE, millions of devices will be inter connected over internet and these devices will be frequently hooked on internet. This will create an enormous market for internet equipment manufacturers. Need for higher processor speed, higher network speed and various devices demand will be alarming. In IOE epoch the demand will be multiplied as compared to existing market of various equipments which are the main ingredients of IOE environment.

Cisco product is likely to gain most from IOE

Cisco is a leading network equipment manufacturer. In the age of IOE, Cisco’s equipment like routers, switches, processors will be in high demand as the amount of data that needs to be transmitted, stored and processed grows over IOE.

Cisco, with its wide product portfolio for network connectivity, should be a preferred choice of corporate houses and governments for various connectivity needs in devices. Some of the products of Cisco such as for optical networking, routers, switches, wireless, networking softwares, etc., are key ingredients for deploying IOE.

Over the past Cisco has focused on software-defined network as it replaces the hardware-defined network. This product of Cisco will be gaining increased market demand in the IOE era. Another important factor in IOE will be the processing speed with millions of devices hooked on Internet. Cisco’s high-end network processors like nPower X1 featured with handling trillion of transaction will be in heavy demands in the era of IOE. These processors perform high throughout (almost eight times) and operates at a low power (¼) as compared to the other processors.

Switch additionally will play an imperative gadget in a situation of IOE. Cisco is a leading manufacturer of switches and routers and has the largest market share. The company’s innovation strategies have always helped it to be ahead of its nearest competitors. Another product that can be in tremendous demand in the IOE environment is Cisco’s ISR-AX (Integrated Service Router with Application Experience). This product provides a streamlined solution for various inter-connected devices and offers the best services across the complete network.

Financial overview

Looking at the financial aspect of Cisco, it looks like Cisco will benefit from the IOE. At a trailing P/E of 16, Cisco is very cheap. The company also has a healthy cash balance of $53.01 billion; such cash balance always helps the company in declaring regular dividends and also implement share repurchase programs. Cisco’s dividend yield of 3% is quite juicy.

Looking forward, Cisco’s earnings are expected to grow at a CAGR of 7.7% for the next five years, which makes it a good bet to benefit from the IOE markets..

Conclusion

Cisco is participating in the huge market of IOE with different capacities. The advantage with Cisco over its competitors is that most of the products that will be in high demand for IOE are already on the shelf of Cisco.

So, investors have a wide range of choices to make the most of the Internet of Everything. This market growth is expected to be exponential and is expected to be a multi-trillion-dollar market going forward, giving investors all the more reason to invest in Cisco.