Jeff Bezos from Amazon
Shares of networking companies fell on Friday following a report from The Information that Amazon Web Services is considering selling its own network switching devices.
Cisco fell 4% at the end of trading, which represents a loss in value of about $ 8.5 billion. Juniper dropped more than 2%. Arista Networks fell more than 4% and F5 Networks fell about one percent. Broadcom, which makes chips used in switching devices, fell more than 3% the day after the report, extending a tough week for action.
The devices make it easier to manage traffic around networks. By expanding its own, AWS could make it easier to move traffic to its services and away from customers’ on-premises systems. However, network providers are well established in large enterprise data centers, and Amazon could face significant business challenges in convincing customers to trade in existing equipment. It would also be a significant departure from Amazon’s expertise in providing hosted cloud services.
The report says Amazon products are being tested with some customers and could launch within the next 18 months. However, he also warns that Amazon could decide not to release them on the market.
Amazon and Cisco declined to comment.
Amazon shares gained less than 1% on Friday.
Read the full report on The Information.