The digital world is moving over there, and for the most part, it has already moved over there. The rise of the cloud means that less is done locally than ever before. People thought the internet moved the world into a digital age, but thinking back about the recent trends seem more like a digital age. Desktops and laptops are giving way to tablets and phones, with a majority of their services delivered from the network of some company with a data center far away.
Network management is basic yet unnoticed
Infoblox is a very new company without much of a history. It provides network management automation software for any company that uses a network, whether for internal use or for offering online services to consumers. It is surprising that investors do not look at Infoblox more, considering that that basic translates into high and consistent demand.
IBM and HP have had their own management solutions, but I see more appeal for investors and potential customers in a company that is smaller. It allows Infoblox to be quicker about responding to customer demands and to remain focused on providing a great product.
Infoblox Inc (NYSE:BLOX) has a few products, but all of them center around network management automation and network security. Network management is a very vague term, but it basically acts as a software that performs the various tasks that are required to maintain a network. All mid to large networks could use management automation to make sure that the network keeps running.
Infoblox Inc (NYSE:BLOX) is still small, but has 6,300 customers. A lot of those customers are probably very small, but automation can help reduce the head count while providing a better result. When I went to the Infoblox website, one of the banners mentioned that a security device now had an auto setting with a man leaning back with crossed arms. The implication is that one person can be relaxed about running the security of the network, removing the need for more than one person.
Large technology partners help push the company to the fore
Infoblox Inc (NYSE:BLOX) works with both Cisco Systems, Inc. (NASDAQ:CSCO) and VMware, Inc. (NYSE:VMW). I understand why certain companies would team with Infoblox, because they want to keep their focus on their main business. Juniper is a good example of this. Cisco might offer its own management solution, but might only work with Cisco Systems, Inc. (NASDAQ:CSCO) products and customers that want a solution for a heterogeneous network would need to go with Infoblox, which explains why these companies partner with Infoblox.
Infoblox’s product seems to be agnostic to the particular hardware for the most part. Having technology partners include Infoblox products in their offerings is a great way for the company to get noticed by potential customers who might otherwise be unaware of their existence. The technology partners are no slouches as investments either.
VMware is nearing its 52-week low and I am surprised to see it in the $70s. The company was overpriced because it was red hot on the hype. The decline is not surprising, given that the EPS ttm seems to be flattening out. Now that it has had some time to cool off, I think it deserves another look.
VMware, Inc. (NYSE:VMW) is still the leader in virtualization and cloud software, and it is going into software-defined networking. SDN should provide another avenue of great growth for the company and I think ,given the decline, VMware is extremely attractive again.
I feel the same way about Cisco. It has a solid line of product offerings and is expanding into both small cells and software-defined networking. Cisco has been locked in a holding pattern for a decade, and the high teens and low twenties are becoming well worn ground for the stock. I do think the company has the potential for a big rise, considering that it has seen improving earnings.
