Cisco surprised Wall Street by reporting its ninth consecutive quarter of record revenue and earnings that exceeded expectations. John Chambers, Chairman and CEO, Cisco cited a slow but steady improvement in the US and other economies combined with having the kind of products customers need for the company's successful third fiscal quarter of 2014, which ended April 27. The company said that software-defined networking (SDN) will have a positive impact in the future, and that its Cisco UCS server business is booming thanks to solutions and architecture sales and not because of bare metal server demand. For the quarter, Cisco reported sales of $12.2 billion, up 5.4 percent over the $11.6 billion reported for the third fiscal quarter of 2012. Income on a GAAP basis was $2.5 billion, or 46 cents per share, up about 15 percent over the $2.2 billion or 40 cents per share reported for the same period of last year. On a non-GAAP basis, income was reported as $2.7 billion or 51 cents per share, up from the $2.6 billion or 48 cents per share from last year. The third-quarter results beat widely reported analyst expectations of $12.18 billion in revenue and earnings of 49 cents a share. The market loved the results and in after-market trading drove Cisco share prices up by 8 percent within a couple hours of the unveiling of the financials. Cisco did particularly well in the US market, where revenue rose 7 percent to $7.1 billion, Chambers said. That growth was across the board, with US commercial revenue up 13 percent over last year, enterprise revenue up 10 percent, solution provider revenue up 10 percent, and public sector business up 5 percent despite a 3 percent drop in revenue from federal government customers. "This balanced approach to growth is a positive signal for growth going forward." Cisco's third-quarter results also stemmed in large part from the company hitting its goals, Chambers said. "Bottom line, we again did what we said we'd do," he said. Frank Calderoni, Executive Vice President and CFO, Cisco, said earnings per share have now grown faster than revenue for six consecutive quarters despite a difficult economic environment. Product revenue was up 5 percent year-over-year, while services revenue rose 7 percent, he said. Services revenue this quarter grew slower than in past quarters because of slower product sales in the last two quarters, he said. For the quarter, switching product revenue fell 2 percent from last year to $3.6 billion, NGN (Next-Generation Networking) routing product revenue was steady at $2.1 billion, service provider video revenue up 30 percent to $1.3 billion, collaboration product revenue down 1 percent to $1.0 billion, data center product revenue up 77 percent to $515 million, wireless product revenue down 4 percent to $327 million, other product revenue down 41 percent to $144 million, and services revenue up 7 percent to $2.7 billion. Chambers said any concerns about how a coming shift toward software-defined networking (SDN) might impact Cisco have been overblown. Cisco currently has 50 beta customers in the Cisco ONE (Open Network Environment) architecture, which includes OpenFlow and OpenStack technologies, and it is one of the leaders in the open source OpenDaylight project. "We feel very confident in our leadership in the market," he said. When asked about how Cisco's margins might shift because of software-defined networking, Chambers said SDN is not a software game but instead is an architecture in which hardware, software and ASICs work together. Cisco's SDN strategy also leverages the company's installed base, he said. Chambers said not to expect a big jump in revenue, but instead a growth in recurring revenue over time. He also said that, if the market expected SDN to have a major negative impact on Cisco, the company's third-quarter results would not have been nearly as strong as they were. Robert Lloyd, President, Development and Sales, Cisco, echoed Chambers by saying that SDN will not be a software-only play. "We continue to see evidence in the marketplace. ... It's great hardware and Cisco software that will drive SDN." A big part of the 77-percent growth in data center products stems from sales related to Cisco UCS servers, which Chambers said is on an annual run rate of over $2 billion. However, in response to an analyst question, Chambers said those sales are growing not because of a demand for the servers themselves but for solutions built around converged infrastructure, the cloud, and together with Cisco Nexus switches. "It is largely an architecture sale," he said. Looking forward, Calderoni said Cisco expects fourth fiscal quarter 2014 revenue to grow between 4 percent and 7 percent over the same period of last year. Non-GAAP earnings per share is expect to be 50 cents to 52 cents, with GAAP earning per share between 7 cents and 10 cents lower than that.

Contractors and employees at IBM's Superlab, a research facility that handles development of firmware and other utilities for IBM servers, are still preparing to be transferred to Lenovo next month, despite reports that IBM's talks to sell parts of its x86 business to the Chinese vendor have broken down. Sources told CRN that Superlab employees have not received any indication from IBM that plans have changed since reports that its talks with Lenovo had stalled surfaced last week. Many Superlab developers and engineers were told by IBM management in mid-April they'd be transitioning to become Lenovo employees on June 1, several sources with knowledge of the matter said. Between 150 and 200 employees work in Superlab, and most of them are contractors. It's not clear how many contractors will be moving to Lenovo. An IBM spokesperson declined comment, citing the company's policy of not commenting on rumors or speculation. Lenovo couldn't be reached for comment. IBM's previous track record of laying off contractors with short notice is contributing to a pervasive uneasiness in the Superlab employee ranks, one source with knowledge of the situation said."There is almost a riot of worry in the Superlab," the source said. "People don't know what they're going to be doing, and I'd say 80 percent of them think they're done for." In IBM's first-quarter earnings call last month, Mark Loughridge, CFO, referred to coming divestitures and workforce re-balancing in the current quarter. In a video after the call, Ginni Rometty, CEO, urged IBM employees to step up and move more quickly to new computing models. Superlab is where IBM does most of its quality assurance testing and development for its x86 servers, including testing of BIOS, flash, drivers and firmware. There are Superlab teams that work on IBM's PureSystem and Flex System servers, but they've been told they'll be moving to other buildings soon, sources said. While it seems strange that IBM management would inform employees it is selling a part of its business before a definitive agreement has been reached, sources said that this has also happened before. In 2004, IBM managers and team leads were informed that IBM was in talks to sell its PC business to Lenovo two months before the $1.75 billion deal was announced, the one former IBM employee said. The same happened when Adaptec licensed and acquired some of IBM's RAID data-protection technology the same year, said the source, who requested anonymity because he's not authorized to speak about company matters. IBM channel managers also informed partners of its intention to acquire Texas Memory prior to closing that deal last August, at a time when IBM was also rumored to be looking at other Flash storage players like Violin Memory and Fusion-io, according to another source with knowledge of the matter. Several sources said it's possible that IBM could repurpose the Superlab building as a data center supporting IBM's cloud business after the teams move on to Lenovo. The facility already has the necessary power and cooling components, as well as a raised floor, sources said. With IBM looking to lessen its focus on hardware as part of its Roadmap 2015, and concentrate more on cloud, analytics and Smarter Planet solutions, lighting up a US data center that is essentially already built would be a logical move. "Cloud services are the highest margin of anything IBM does or sells," one source said. "The one thing customers ask when you try to sell them a cloud solution is 'Where is the data center?' They don't want them in India or China."

Contractors and employees at IBM's Superlab, a research facility that handles development of firmware and other utilities for IBM servers, are still preparing to be transferred to Lenovo next month, despite reports that IBM's talks to sell parts of its x86 business to the Chinese vendor have broken down. Sources told CRN that Superlab employees have not received any indication from IBM that plans have changed since reports that its talks with Lenovo had stalled surfaced last week. Many Superlab developers and engineers were told by IBM management in mid-April they'd be transitioning to become Lenovo employees on June 1, several sources with knowledge of the matter said. Between 150 and 200 employees work in Superlab, and most of them are contractors. It's not clear how many contractors will be moving to Lenovo. An IBM spokesperson declined comment, citing the company's policy of not commenting on rumors or speculation. Lenovo couldn't be reached for comment. IBM's previous track record of laying off contractors with short notice is contributing to a pervasive uneasiness in the Superlab employee ranks, one source with knowledge of the situation said."There is almost a riot of worry in the Superlab," the source said. "People don't know what they're going to be doing, and I'd say 80 percent of them think they're done for." In IBM's first-quarter earnings call last month, Mark Loughridge, CFO, referred to coming divestitures and workforce re-balancing in the current quarter. In a video after the call, Ginni Rometty, CEO, urged IBM employees to step up and move more quickly to new computing models. Superlab is where IBM does most of its quality assurance testing and development for its x86 servers, including testing of BIOS, flash, drivers and firmware. There are Superlab teams that work on IBM's PureSystem and Flex System servers, but they've been told they'll be moving to other buildings soon, sources said. While it seems strange that IBM management would inform employees it is selling a part of its business before a definitive agreement has been reached, sources said that this has also happened before. In 2004, IBM managers and team leads were informed that IBM was in talks to sell its PC business to Lenovo two months before the $1.75 billion deal was announced, the one former IBM employee said. The same happened when Adaptec licensed and acquired some of IBM's RAID data-protection technology the same year, said the source, who requested anonymity because he's not authorized to speak about company matters. IBM channel managers also informed partners of its intention to acquire Texas Memory prior to closing that deal last August, at a time when IBM was also rumored to be looking at other Flash storage players like Violin Memory and Fusion-io, according to another source with knowledge of the matter. Several sources said it's possible that IBM could repurpose the Superlab building as a data center supporting IBM's cloud business after the teams move on to Lenovo. The facility already has the necessary power and cooling components, as well as a raised floor, sources said. With IBM looking to lessen its focus on hardware as part of its Roadmap 2015, and concentrate more on cloud, analytics and Smarter Planet solutions, lighting up a US data center that is essentially already built would be a logical move. "Cloud services are the highest margin of anything IBM does or sells," one source said. "The one thing customers ask when you try to sell them a cloud solution is 'Where is the data center?' They don't want them in India or China."

IBM will offer its channel partners one-year free use of the IBM Marketing Center, the company's cloud software that combines online marketing capabilities and customer analytics. The offer will be announced at IBM's SmarterCommerce Global Summit in Nashville, Tennessee. The company is hoping that in addition to helping partners be more effective in their marketing efforts, partners will become more familiar with the software-as-a-service products and sell them more proactively. "It's a hot product for us. And now we are putting it in the hands of our business partners," said Craig Hayman, General Manager, Industry Solutions, IBM. Businesses use IBM Marketing Center to design and execute marketing campaigns, including building prospect lists, developing marketing content and instrumenting emails to track response rates. To do that today, solution providers must either invest in the IT hardware and software needed to install their own marketing system or hire an outside agency to perform the work, Hayman said. Either way, the costs are high and the work can take time, he said. Under IBM's offer, partners can have free access to IBM Marketing center for one year. "They can run as many campaigns as they want and target as many customers as they want," Hayman said. IBM made a similar offer to partners at the PartnerWorld Leadership Conference in February for free one-year use of IBM Digital Analytics, previously known as Coremetrics, which IBM acquired in 2010. Hayman said providing partners with free access to the IBM software constitutes a new level of assistance IBM offers solution providers, with the vendor's products and services constitutes the first level and traditional channel program incentives the second level. "We are really experimenting with a third value for the partners," Hayman said.

Accel Frontline has replaced Digicare as the new warranty service partner for Kingston. Effective May 16, Accel will provide warranty support on all Kingston products through their 67 service centers. Kingston spokesperson in an email response to CRN said, “Our contract with Digicare has been discontinued and Accel Frontline will be our only service partner in India. We chose to replace Digicare with Accel because it has a wider reach especially in tier-2 and -3 cities.” Apart from its large number of service centers, Accel Frontline will offer service updates to partners and customers about specific complaints or product replacements. Customers will be able to check on how soon they will receive replacement products by calling, through SMS or email. Service updates can be checked by logging on Accel’s Website http://www.myservice.accelwms.in/. Customers and resellers having any feedback related to warranty or RMA can provide it by texting Accel Frontline on 9600094051.

Sandisk has promoted Rajesh Gupta, Director, Sales as the new Country Manager with immediate effect. He replaces Manisha Sood, who has now moved to Microsoft as Director, SMB. “Rajesh has more than two decades of proven sales and marketing success in the IT industry. We are pleased to appoint him as the new Country Manager of India to continue SanDisk’s growth in the region,” said Gavin Wu, vice president, Asia Pacific, SanDisk. As a part of his portfolio, Gupta will oversee the retail sales and marketing of memory cards, USB and SSD products and the consumer brand for flash memory storage solutions and enhance the sales and marketing infrastructure within India. Prior to Sandisk, he worked for Intel for 15 years, last serving as the Director, Sales and Marketing, Intel Technology India.

ESET has announced the availability of ESET business security solutions to support the Managed Service Provider (MSP) channel partners. The company is offering ESET Endpoint Security (formerly ESET Smart Security Business Edition), ESET Endpoint Antivirus (formerly ESET NOD32 Antivirus Business Edition), ESET Mail Security for Microsoft Exchange Server and ESET File Security for Microsoft Windows Server. Both MSPs and VARs will also be able to leverage the company's ESET Remote Administrator tool, which is designed to enable administrators to remotely access and control their antivirus implementations without requiring specific vendor or hardware configurations. Globally, the company has 1,000 active MSPs and over 2,50,000 endpoint seats. Last year, ESET identified a growing demand among MSP partners for a simpler licensing and management approach. The new program rewards service partners for their growth by decreasing licensing costs as their volume of business increases. Ignacio Sbampato, Chief Sales and Marketing Officer, ESET, said, "At ESET, we created a pricing and management model for MSPs that is tailored to our partners needs. It allows us to provide our partners and re-sellers flexible options while continuing to offer the best endpoint security protection."

Network security provider Palo Alto Networks has appointed Anil Bhasin as Managing Director, India & Saarc. As part of his mandate, Bhasin will drive the service provider, enterprise and commercial segments. Based out of Mumbai, he will also be responsible for accelerating footprint across customer segments and creating strategic channel and go-to-market alliances. “Anil is a seasoned and trusted leader who has consistently delivered results. We are pleased to have him on-board, as he brings with him a wealth of experience. The Saarc region is an increasingly important market for us and I am looking forward to Anil and his team’s success as we continue to build and evolve our business,” said Sharat Sinha, VP, Sales, APAC, Palo Alto Networks. Prior to this role, Bhasin worked with Cisco Systems in India for 12 years.

Brocade has unveiled on-demand data centers (ODDCs) strategy to enable mass adoption of software-defined networking (SDN). By using Brocade VCS fabric as the foundation, the company has combined physical and virtual networking elements, enabling customers to provision compute, network, storage and services. It is also upgrading hardware and software across its data center networking portfolio. To further enable the new initiative, Brocade announced new virtual networking solutions namely Brocade Vyatta vRouter and Brocade Virtual ADX Application Delivery Switch; physical networking solutions namely Brocade MLXe 4×40 GbE Core Router module, Brocade NetIron CES/CER Carrier Ethernet Switch/Router modules and Brocade NetIron OS update; and orchestration and management solutions namely Brocade OpenStack solution and Brocade Application Resource Broker. “While one of the more attractive benefits of virtualization is a reduction in capital expenses, we are starting to see the operational expenditures of highly virtualized environments increase because they lack proper orchestration, automation and management tools," said Zeus Kerravala, Founder and Principal Analyst, ZK Research. “Brocade's On-Demand Data Center strategy provides a resilient and complete blueprint that unifies vital areas of the data center, from fabrics to storage to physical and virtual infrastructure. Additionally, this strategy provides a pragmatic route for the adoption of emerging software-defined networking technologies."

For Avaya partners that have been requesting a more streamlined quoting and ordering process from the vendor, the wait will be over in 2013. Avaya has announced launch details for its long-awaited One Source platform, a Web-based portal that will consolidate quoting and pricing details for Avaya's unified communications (UC), contact center (CC), networking and small and medium-sized enterprise (SME) solutions into a single view for partners. According to Tom Mitchell, Senior Vice President, Global Sales, Avaya, One Source was developed in response to partners' requesting a simpler way to do business with Avaya. "The partners certainly expressed the concern, and we listened. Make no mistake about that," Mitchell said. "But we also knew we were on an unsustainable platform, too." Avaya said the One Source platform will be available to its North American channel partners in the fourth quarter of this year. The platform will also be rolled out in Europe, Africa, the Middle East and Asia Pacific by July. The need for One Source—which Mitchell said is the result of millions of dollars and years of development—was driven especially by Avaya's 2009 acquisition of Nortel and 2012 acquisition of Radvision. Prior to One Source, Avaya partners had to navigate separate pricing and quoting processes for legacy Avaya, Nortel and Radvision products, an undertaking that could sometimes be cumbersome and time-consuming. "There were multiple tools to do a single configuration on an order when you ran across Nortel, Avaya ... and Radvision products," Mitchell said. One Source eliminates this complexity by providing an integrated quoting and ordering system for the entire Avaya portfolio that partners can access within a single Web-based location. Another benefit of One Source, Mitchell said, is that it reduces the number of material price groups and SKUs Avaya partners have to navigate. Historically, he said, Avaya had thousands of SKUs bucketed into more than 1,400 material price groups for partner discounting purposes. As a result, Avaya distributors and partners had to sift through more than 1,400 discounts to identify their true buying price for Avaya products. With the launch of One Source, however, those 1,400 material price groups are being collapsed into a much more manageable 13. Meanwhile, Avaya's 200 pricing catalogs are also being bundled into one, and all product pricing is being standardized globally to ensure the consistency of price points across different geographical regions. Mitchell said Avaya research found that One Source, overall, can reduce the time it takes for partners to get quotes by 50 to 87 percent.