Gigamon Inc (NYSE:GIMO) recently joined the ranks of information systems service providers Juniper Networks, Inc. (NYSE:JNPR) and Cisco Systems, Inc. (NASDAQ:CSCO) by going public. But unless you’re a business interested in learning more about the traffic on your servers, chances are you’ve never heard of them. Here’s a breakdown of what the latest technology IPO offers investors.
With an initial price range of $19 per share, Gigamon burst onto the scene in early June, with investors almost immediately pushing the stock up to $23 per share. The interest was enough to capture the attention of investors everywhere–even those who don’t normally buy into tech stocks.
Who is Gigamon?
Founded in 2004, Gigamon Inc (NYSE:GIMO) achieved phenomenal success during one of the most challenging economic periods in the past century. In 2011, the company celebrated its seventh year by posting 50 percent year-over-year growth and 22 sequential profitable quarters.
The success has continued, with Wall Street Daily’s Louis Basenese naming the company an “IPO to watch” in December of 2012. CNBC’s Jim Cramer echoed the sentiment in June, urging investors to, “call your broker immediately” to purchase shares in the IPO.
Along with its competitors, Gigamon Inc (NYSE:GIMO) specializes in an area that is expected to be the next big thing in technology: Big Data. Big Data is the effort of channeling the 2.5 quintillion bytes of data created each day so that businesses of all sizes can harness it.
Evaluating the competitors
One way to determine if Gigamon Inc (NYSE:GIMO) is a good investment is to take a look at the recent history of Big Data service providers. Cisco Systems, Inc. (NASDAQ:CSCO) works closely with software companies like open-source software provider Apache Hadoop to collect and store data for clients.
As businesses migrate from on-site servers to Cloud networking solutions, Cisco has had to make a few changes, as well. As spending has slowed, big tech companies like Cisco Systems, Inc. (NASDAQ:CSCO) have realized that it must evolve or perish. Today, Cisco is shifting its focus to wireless networking and software services.
In its most recent earnings report, Cisco Systems, Inc. (NASDAQ:CSCO) reported a 5% increase in sales. But switching and routing make up more than half of the company’s revenue and those two sectors are currently declining. The company has no choice but to focus on areas that are growing.
Cisco Systems, Inc. (NASDAQ:CSCO)’s CEO has also pointed out that Big Data only works when channeled through a company’s network. He added that increasingly sophisticated computing must be built into the networking devices consumers use each day.