Cisco, networking stocks drop on a report Amazon Web Services is developing its own network devices

Networking company stocks fell off Friday following a report by The Information that Amazon Web Services is considering developing its own network switching devices.
Cisco dropped 5 percent. Juniper gave up more than 3 percent. Arista Networks dropped nearly 6 percent, and F5 Networks dropped roughly 2 percent. Broadcom, which makes chips used in switching devices, was down nearly 3 percent on the day following the report, extending a rough week for the stock.
The devices make it easier to shepherd traffic around networks. In developing its own, AWS could facilitate the shifting of traffic onto its services and away from customers’ on premises systems. However, networking vendors are well entrenched in large companies’ data centers, and Amazon could face significant sales challenges convincing customers to swap existing gear. It would also be a significant departure from Amazon’s expertise in providing hosted cloud services.

The report says the Amazon products are being tested with some customers, and could launch within the next 18 months. However, it also cautions that Amazon may decide against bringing them to market.
Shares of Amazon were up less than a percent following the report.
Read the full report at The Information.

Source: CNBC

Related posts