VMware, Inc. (VMW), Microsoft Corporation (MSFT), Cisco Systems, Inc. (CSCO) – Software Defined Networking: The Next Cloud Revolution

Cisco Systems, Inc. (NASDAQ:CSCO) has faced heavy enterprise competition in recent years from the likes of Juniper. Its growth in emerging markets has been dampened by fierce competition from Huawei. But, it has been able to manage exceptional operational control, turning in 23% profit growth from very similar operating expense numbers in the realm of $35 billion the past two years.

Look for SDN to help it boost that profit even more. Cisco Systems, Inc. (NASDAQ:CSCO) already has the knowledge it needs to build software-based networks; it just needs to hire the software development. This will effectively put it ahead of the Junipers and Huaweis of the world and allow it to control their destiny in a constantly expanding world of digital network. Insieme is its way of controlling the cannibalism that will come to their traditional networking business before the competition even knows what hit them.

In the end

Software defined networking is an exciting next step for enterprise technology. Companies like Google Inc (NASDAQ:GOOG) and Amazon.com, Inc. (NASDAQ:AMZN) are already using it to control their incredibly complex networks. The work that they are doing will eventually trickle down to other organizations.

Companies like Cisco Systems, Inc. (NASDAQ:CSCO) and VMware, Inc. (NYSE:VMW) will be at the cutting edge of this innovation. They are already making moves, showing that they are not afraid of the software defined networking revolution. Rather, they are embracing it.

Eventually, Microsoft Corporation (NASDAQ:MSFT) will need to as well, either through an acquisition or a “spin-in” of their own, although those are generally pretty rare to see. But with technology moving so fast, you have to cannibalize old tech before you are old tech. Cisco knows this. And so does VMware.

The article Software Defined Networking: The Next Cloud Revolution originally appeared on Fool.com and is written by Daniel Cawrey.

Daniel Cawrey has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems and VMware. The Motley Fool owns shares of Microsoft and VMware. Daniel is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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