Cisco's Q2 results saw total revenue of $11.8bn, up 2%, with product revenue growth of 2% led by growth in security, routing, and collaboration.
A 4% decline in switching was largely driven by macro weakness in the campus business, which Cisco puts down to volatile times and customers pausing on spending decisions.
The routing business grew 5%, driven by double-digit growth in CRS platforms, with particular strength in mobility and web-scale service providers.
Geographically, Americas was flat, EMEA declined 1%, and APJC grew 17%. Total emerging markets grew 7%, with the BRICs plus Mexico [BRICM] showing strength at 17%, with China up 64% and India up 23%.
Total emerging minus the BRICM countries was down 3%. In terms of customer segments, enterprise declined 2% and commercial grew 4%, both of which were impacted by macro uncertainty. Public sector was flat and service provider grew 5%, it says.
Collaboration grew 3%, driven by 17% growth in WebEx, partially offset by some slowdown in the Unified Communications business.
Deferred revenues showed continued strength, growing 15%, but a data centre decline of 3% was driven by a slowdown in spend, it says.
Security remains the most critical priority for customers. "As the largest security provider, we have been focused on driving the growth of this business, while at the same time migrating our model from a primarily hardware business to a software and services business.
In Q2, not only did our security business grow 11%, but our security deferred revenue grew 26%," says CEO Charles H. Robbins, who also referred to the cloud transition.
"Double-digit growth in our cloud-based SaaS businesses, specifically WebEx, Meraki Cloud Networking, and security. You are seeing us move more of our portfolio to be delivered in both on-premise and cloud-based models, and we are aggressively driving this transition."
Cisco is using M&A to augment internal innovation in key growth areas. "In the last 12 months, we have added critical capabilities and talent in the growth areas of cloud, security, SaaS, IoT, and analytics.
"Our recently announced acquisition of Jasper combined with our other capabilities is a strong example of how we will play unique and strategic role in unlocking the value of IoT.
"We will enable our customers to monetize the data from the billions of sensors and connections with the security, speed, and reliability they have come to expect from Cisco.
"The Ericsson partnership has an immediate opportunity with it, and we have begun to close transactions together. I would not translate that to a significant impact to any of the numbers that we put out there today because we're literally in the handful stage right now, but we do see that accelerating."