Cloud computing IaaS (Infrastructure as a Service) has emerged as a key driver of growth in the data center equipment market. Revenues associated with IaaS account for 25 percent of the data center equipment market, and are projected to grow at a substantially higher rate than the market as a whole. Networking equipment accounts for approximately 25 percent of spending on IaaS, and Cisco is the clear leader in this segment, accounting for approximately half of the market.

Vendors big and small can benefit from growing investment in cloud computing and data centers. Strong market growth in all major world regions is creating new business opportunities. For example, Cisco's dominance in the networking infrastructure segment is not preventing Juniper, F5, and RiverBed from increasing their market shares and growing their revenues substantially.

Eoin Treacy's view
Cisco Benefits from Cloud-Driven Data Center Networking Market - Thanks to a subscriber for this interesting article from TeleGeography. Here is a section:

Cloud computing IaaS (Infrastructure as a Service) has emerged as a key driver of growth in the data center equipment market. Revenues associated with IaaS account for 25 percent of the data center equipment market, and are projected to grow at a substantially higher rate than the market as a whole. Networking equipment accounts for approximately 25 percent of spending on IaaS, and Cisco is the clear leader in this segment, accounting for approximately half of the market.

Vendors big and small can benefit from growing investment in cloud computing and data centers. Strong market growth in all major world regions is creating new business opportunities. For example, Cisco's dominance in the networking infrastructure segment is not preventing Juniper, F5, and RiverBed from increasing their market shares and growing their revenues substantially.

My view - Cloud computing remains a growth sector with an increasing number of companies outlining strategies related to how they plan to tap this market. Of the three sub sectors outlined in this article data storage and computing have been by far the best performers. Networking companies have for the most part not participated in the impressive bull markets for cloud computing related shares.

Cisco Systems following a persistent downtrend since early 2010 has found at least temporary support in the region of the 2009 low near $15. It has rallied to test the declining 200-day MA and a sustained move above it, currently near $17.50 would help to bolster the case for recovery. Brocade Communications Systems has a similar pattern of underperformance but has bounced more emphatically from the 2009 lows.

Juniper Networks failed to sustain the breakout from its 10-year base in February. It has pulled back sharply, falling below the MA and back into the base. It has paused in the region of $20 but nothing has yet happened to question the consistency of the decline. A sustained move above $25 would begin to suggest a return to demand dominance.

Riverbed Technology has performed in line with the data storage and computing subsectors it accelerated to an impressive peak by March but lost momentum and broke below the 200-day MA in July. It found short-term support in the region of $20 in August and has at least partially unwound the oversold condition relative to the MA. A sustained move above $30 would be required to indicate a return to medium-term demand dominance. F5 Networks has a relatively similar pattern.