Needham Sees Comm & Enterprise Infra Budgets Intact; Priorities Shifting to Security and Cloud

  • Needham analyst Alex Henderson hosted a Networking and Security oriented expert call with Joe Hlavin of n2grate Technology Solutions, a data center and cloud integration firm focusing on hardware, software, and cloud services for large Enterprises and the Federal sector. 
  • Henderson's discussion focused on C-Suites' handling of the broader macro environment, budget shifts and re-prioritization, lead times, and pricing dynamics. 
  • Budgets for CY23 were assumed flat, but businesses prioritized data center/security and shifting to software, noted Henderson. 
  • Lead times remained long, with firms struggling to predict supply. 
  • Software replaced hardware where possible, especially in Federal mandating physical delivery of the product to count toward current budgets. 
  • Pricing increases have not fully taken hold, but sales slowly added strings to significant discounts.
  • The call fetched positive comments from VAR for Zscaler, Inc ZS ($159.93, Strong Buy Rated, Price Target $185):, Okta, Inc OKTA ($101.95, Buy Rated, Price Target $135):, Palo Alto Networks, Inc PANW, Fortinet, Inc FTNT, SentinelOne, Inc S ($25.26, Buy Rated, Price Target $31):, and CrowdStrike Holdings, Inc CRWD ($183.53, Buy Rated, Price Target $210).
  • It saw Neutral comments on Arista Networks, Inc ANET ($102.38, Buy Rated, Price Target $128) and Cisco Systems, Inc CSCO ($44.46, Hold Rated).
  • It also saw a modestly negative view of Juniper Networks, Inc JNPR ($28.61, Buy Rated, Price Target $38).





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