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Cisco looks to cloud as video business dips in third quarter

John Chambers

John Chambers

Cisco Systems’ service provider video business took a hit on lower orders and revenue in its third fiscal quarter, but will look to rebound as it focuses more on cloud TV delivery internationally, according to its outgoing CEO.

Cisco posted overall third quarter revenues of US$12.1 billion (€10.6 billion), up 5%. Non-GAAP net income was up 5.9% to US$2.8 billion.

However, the service provider video arm saw revenues fall by 5% in its fiscal third quarter, with underlying orders down more, according to chairman and CEO John Chambers.

Chambers, peaking on an analyst call, admitted that service provider video orders were down 20%. However, he said that the decline was due largely to a single US operator and that as Cisco focused more and more on the growth area of cloud services, it would pick up momentum.

Chambers said that cloud-based video was “strategic” for Cicso, which he contrasted with the legacy set-top box business, characterised as “tactical”.

Chambers said that the group would continue “to focus on improving profitability in this business as we develop next-generation end-to-end video solutions combining hardware, software, and services”.