Shares of Cisco (CSCO) are sharply lower in Friday afternoon trading after The Information's Wayne Ma and Kevin McLaughlin reported earlier that Amazon's (AMZN) cloud unit, AWS, is considering selling its own networking switches for business customers. The report, which cites a person with direct knowledge of the unit's plans and another person who has been briefed on the project, said AWS' plans could pose "a direct challenge to incumbents in the business like Cisco." OTHERS TO WATCH: Other switching solution providers include Juniper Networks (JNPR), HP Enterprise (HPE), Arista Networks (ANET) and Nokia (NOK). 'NOTABLE NEGATIVE': After The Information's report, RBC Capital analyst Mitch Steves said that, if true, this would be a notable negative for those in the networking equipment space, including Cisco, Arista and Juniper. While others have created their own white-box hardware, none have created a commercial product so far and AWS would be the first major commercial provider of white-box switches, said Steves, who also said "it is important to note" that current sales and revenue trends will likely be safe since the report said a launch could potentially occur in 18 months. He also thinks Cisco and Arista in particular have "solid" software products that would help them compete against a new entrant such as AWS. PRICE ACTION: Near 2 pm ET, Cisco shares are down $2.19, or 5%, to $41.37. Juniper is also down 3% and Arista has fallen nearly 5%.
