Chowdhry: Cisco Is Just Another Victim Of Amazon's Superclouds

Trip Chowdhry of Global Equities Research commented in a report Thursday that Cisco Systems, Inc.'s CSCO earnings report and guidance reaffirms his prior thesis that the company is losing share to SuperCloud providers, such as Amazon.com, Inc.'s AMZN AWS and Microsoft Corporation's MSFT Azure.

Chowdhry commented in a report on November 12 that traditional on-premises software companies, including Cisco, could see their addressable market decline by around 60 percent and their business will secularly decline in tandem.

Chowdhry added that Software-Defined-Everything is "passe" and "should not be a part of investors bull thesis" since these offerings are not priced for scale. Companies that operate in this space other than Cisco includes Juniper Networks, Inc. JNPR and VMware, Inc. VMW.

On the other hand, Cisco faces competition from Amazon's AWS that can offer 100 times the performance at 1/10th the price.

In addition, the analyst noted that neither Amazon's AWS nor Microsoft's Azure use branded network equipment.

"Recovery in CSCO's business is impossible," Chowdhry said in his report on Thursday. "It will be in secular decline. Cisco has zero chance of winning against SuperCloud providers."

Shares of Cisco were trading lower by more than 5 percent.