Cisco Eyes Facebook-Fueled Network Boost

NEW YORK ( TheStreet) - The growth of bandwidth-hungry applications on social networking sites like Facebook ( FB) and enterprise applications from the likes of Oracle ( ORCL) could spell big bucks for networking behemoth Cisco ( CSCO).

The tech bellwether revamped its router technology for service providers on Tuesday, unveiling its new family of ASR 5500 products. Although hardly the sexiest corner of the tech sector, routers are big business for Cisco and rivals such as Ericsson ( ERIC) and Nokia Siemens Networks at a time when more and more traffic is being pushed through networks.
Cisco's eyeing a Facebook-fueled router boost.

"For Cisco, this is a very critical play in terms of our growth, especially in the mobility sector," explained Murali Nemani, Cisco's director of service provider mobility, during an interview with TheStreet. " Mobile Internet traffic growth puts a lot of strain on the network and it also creates bottlenecks for consumers that want to access high quality, Internet-based content."

The tech giant, which recently saw its shares slump on weak fourth-quarter guidance, is touting the ASR 5500 as a key tool helping service providers wrestling with an explosion in Internet connections. Cisco predicts mobile Internet traffic will increase 18-fold by 2016.

Nemani explained that the ASR 5500 offers 10 times the performance of its predecessor, the ASR 5000, in terms of throughput, Internet connections and app 'transactions' on a service provider's network.

Last year Cisco confirmed that 20 of the world's top 25 service providers are using the ASR 5000. Orders for the router also increased 100% year-over-year during the networking giant's recent third quarter; although Cisco clearly sees an opportunity to grow revenue with the ASR 5500.

Nemani uses the example of social networking phenomenon Facebook, which is home to so many network-hungry mobile applications.

"We think the ASR 5500 accelerates a lot of what Facebook is trying to do, particularly in the mobile environment," he told TheStreet. "Facebook has an app called Friend Mapping that's a constant update, happening by the minute."

Service providers can therefore better support the developer community's attempts to develop new apps with the new router, according to Nemani. "It's enabling that world of apps to come to fruition," he said. "It's not just consumer apps, but enterprise apps, like Oracle and Siebel."

Cisco, of course, has already described the positive impact that Facebook has on its business. Last month, the networker's CFO, Frank Calderoni, explained how the Menlo Park, Calif.-based firm is driving a "tremendous amount" of traffic through networks. "Their success helps both of us," he said.

Cisco also sees a big opportunity to sell the ASR 5500 to service providers wrestling with the demands of machine-to-machine technology. This could be, for example, vehicle operators delivering cloud-based information into cars, or healthcare systems linking up to patients' health monitoring systems.

"We think this is a tremendous opportunity to go after, not just connecting people, but connecting machines," said Nemani.

Cisco shares closed up 0.06% at $16.12 on Tuesday.

-- Written by James Rogers in New York.

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