Riding the wave of increased demand for Web video, Silicon Valley's networking and telecommunications companies reported rising sales and, in turn, bolstered their workforces in 2006.
April 16, 2007 (Press Release) --
Thank YouTube. Riding the wave of increased demand for Web video, Silicon Valley's networking and telecommunications companies reported rising sales and, in turn, bolstered their workforces in 2006.
The 22 networking and telecommunications companies in the Silicon Valley 150 grew their revenues 21.3 percent to $42.2 billion compared with the previous year. They hired nearly 20,000 people last year, increasing their workforces by 29.7 percent.
And as the industry grows, analysts say, it is also maturing.
With more people tuning into YouTube and buying high-definition television services, the companies that make and sell the cables, switches and routers for networks are seeing more demand for their products. So those companies, which traditionally targeted selling products to corporations and business clients, are beginning to reach out to average retail consumers as well.
"You build out first where the money is in business, but at some point once that builds out, where do they go next?" asked Clay Ryder, president of market research and consulting firm the Sageza Group. "It's getting all those workers who have gotten used to a certain level of connectivity to get that at home."
Cisco Systems, which raked in $32 billion of the sector's $42 billion in sales, exemplifies the trend. While the San Jose company has relied on selling the routers and switchers that make up Internet and cable networks, it now also is trying to reach a growing consumer audience with Internet-based video and audio products.
Cisco appealed to the masses last year by rolling out a new marketing campaign and announcing that it will showcase its gear at a new Major League Baseball stadium in Fremont. The company also bought land and began marketing in the virtual world of Second Life, which has more than 5 million online participants.
Cisco's sales rose 23.1 percent last year and profit rose 16.0 percent to $6.5 billion.
But even as profit rose for the sector's biggest company, the group's overall profits were flat at $5.5 billion. Missing from those results are net income figures yet to be released from three companies pending their examinations of past stock-option granting practices.
Juniper Networks, No. 2 in the sector, announced one of the largest restatements stemming from the stock-option backdating scandal. The Sunnyvale company took a charge of about $900 million to account for tainted options issued during the frenzied tech boom.
Still, analysts pointed out that the sector's future remains promising.
"These companies are going global with new markets," said Gartner analyst David Willis. "There's still good growth in telecom."
Author: Sarah Jane Tribble
Source: http://www.mercurynews.com/
The 22 networking and telecommunications companies in the Silicon Valley 150 grew their revenues 21.3 percent to $42.2 billion compared with the previous year. They hired nearly 20,000 people last year, increasing their workforces by 29.7 percent.
And as the industry grows, analysts say, it is also maturing.
With more people tuning into YouTube and buying high-definition television services, the companies that make and sell the cables, switches and routers for networks are seeing more demand for their products. So those companies, which traditionally targeted selling products to corporations and business clients, are beginning to reach out to average retail consumers as well.
"You build out first where the money is in business, but at some point once that builds out, where do they go next?" asked Clay Ryder, president of market research and consulting firm the Sageza Group. "It's getting all those workers who have gotten used to a certain level of connectivity to get that at home."
Cisco Systems, which raked in $32 billion of the sector's $42 billion in sales, exemplifies the trend. While the San Jose company has relied on selling the routers and switchers that make up Internet and cable networks, it now also is trying to reach a growing consumer audience with Internet-based video and audio products.
Cisco appealed to the masses last year by rolling out a new marketing campaign and announcing that it will showcase its gear at a new Major League Baseball stadium in Fremont. The company also bought land and began marketing in the virtual world of Second Life, which has more than 5 million online participants.
Cisco's sales rose 23.1 percent last year and profit rose 16.0 percent to $6.5 billion.
But even as profit rose for the sector's biggest company, the group's overall profits were flat at $5.5 billion. Missing from those results are net income figures yet to be released from three companies pending their examinations of past stock-option granting practices.
Juniper Networks, No. 2 in the sector, announced one of the largest restatements stemming from the stock-option backdating scandal. The Sunnyvale company took a charge of about $900 million to account for tainted options issued during the frenzied tech boom.
Still, analysts pointed out that the sector's future remains promising.
"These companies are going global with new markets," said Gartner analyst David Willis. "There's still good growth in telecom."
Author: Sarah Jane Tribble
Source: http://www.mercurynews.com/
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