A few reactions to reports from yesterday, this morning and other news:
RIMM: I got an email last night asking me if I was following the activists who are posturing for changes at RIMM and one of their proposals was to break up the company into three companies: devices, networks and patents? I have no idea how or why you would want to separate networks from devices, this is not NOK or ERIC with large independent business units. RIMM’s devices are directly tied to their NOC operations. I do not think that separation is even possible. It is beyond me why people with a poor understanding of the company’s technical operations are promoted by various media outlets when all they are doing is talking their book.
RVBD: The numbers look fine. I was thinking about a theory on RVBD that if there is a slowing trend of spending in enterprises, that RVBD should do better in that environment as they provide a lower cost solution that extends the life of the current network and enables enterprises to put off upgrades which is what is really needed to solve network performance issues. In time, I think RVBD’s WAN acceleration will go the way of the distributed CDN, but this is probably a few years out.
ERIC: Wow…those margins suck, but I would say that mid-30s is going to be the new normal over the LT and some companies will need to adjust to that trend.
ATT: The CAPEX number is out and it is $5,220B for Q3. Waves of relief emails are pouring into my inbox. I have been bearish on ATT CAPEX, as noted in prior posts, and I still think something is amiss based on APKT, PWAV and JNPR commentary. I would say that I modeled ATT CAPEX to be a little ahead of this number and if ATT still plans to spend to $20B in CAPEX, then the Q4 number should come in around $5,300-5,340B. In all, that still tells me that multiples are going to be finishing their correction, contraction process. The CFO will probably make a statement on CAPEX later this morning on their call. I have updated the charts I posted in July and added a simple chart of ATT CAPEX back to 2002. The wireless revenue miss is going to cause all sorts of questions to be asked. Does this mean they have made enough investment in wireless or not enough? I will wait to make a final call on ATT CAPEX until I hear from CSCO in November and CIEN in December.
CSCO: Acquired private company in which they had previously made an investment. This is just further evidence of a content deep networking trend and that CDNs can easily be built by service providers. I covered all this is prior posts.
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