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Keysight (KEYS) to Gain From Momentum in Software Offerings

Keysight Technologies, Inc. KEYS recently unveiled cloud-based distributed network performance and security test software — CyPerf.

CyPerf identifies loopholes in security and network performance, and offers enhanced visibility into the comprehensive application delivery process across hybrid networks.

This enables network security tool vendors to replicate their customers’ architecture to reduce time-to-market and boost business.

The latest CyPerf software accelerates SD-WAN and cloud migration by obtaining the optimal balance between network security and digital user experience.

The company’s CyPerf’s web-based graphical user interface (GUI) aids users to interact and visualize various network elements that are vital to simulating a network in action.

The new offering is aimed at enabling organizations to illustrate user experience and validate the performance limits of hybrid networks, security devices and services.

Evolving technologies such as multi-cloud architecture, SD-WAN, and software as a service (SaaS) applications require secure network and robust architecture. In coronavirus crisis triggered remote working wave, it has become imperative for IT teams to measure the performance and security of networks and application services.

These factors are expected to bolster the demand for Keysight’s new CyPerf software, which is easy to implement and operate. This, in turn, will drive the top line in the quarters ahead.

Expansion in Portfolio Augurs Well

Keysight is strengthening its product portfolio with a focus on augmenting software testing capabilities. During the fiscal third quarter, Keysight concluded the acquisition of Eggplant from The Carlyle Group with an aim to boost software test automation capabilities.

The company is also well poised to gain from incremental adoption of latest support solutions, including Keysight Care, which is expected to fuel gross margin expansion in the days ahead. Moreover, incremental adoption of the company’s latest innovative PathWave Test 2021 software holds promise.

Also, robust growth in Software and services revenues, which represented more than 30% of total revenues in third-quarter fiscal 2020, is driving Keysight’s business model, bolstering recurring revenue growth and leading to expansion in gross margins.

Moreover, the company is benefiting from accelerated 5G commercial deployment, which is leading to improvement in orders from 5G device and design developers. Further, expansion of investments in O-RAN (or Open Radio Access Network) and virtualization technologies augurs well.

Increasing investments in 5G infrastructure is fueling demand of its testing and emulation solutions. Moreover, momentum in semiconductor measurement solutions driven by allegiance of semiconductor companies to develop chips on next-generation process technologies bodes well.

These factors position Keysight well to benefit from 5G NR network collaborations with Qualcomm QCOM, Xilinx XLNX and AT&T T. This, in turn, will also help the company in fortifying presence in the global 5G network emulation market.

However, the coronavirus outbreak led global supply chain disruptions and macroeconomic weakness in aerospace and defense vertical, and Huawei related headwinds are anticipated to weigh on Keysight’s near-term prospects.

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