Software-defined networking poses a threat to the expensive proprietary appliances that the current industry leaders make most their living selling, but that hasn’t stopped Cisco Systems Inc. from achieving record growth in the second quarter. In contrast to other industry giants that have seen revenue growth slow in the face of customer demand for services riding on commodity hardware, Cisco is actually riding the wave.

The switching kingpin saw the biggest revenue rise in three years during the three-month period ended January 24, building on exploding demand for its programmable networking equipment. The Nexus 9000 and Nexus 3000, which provide the building blocks for Cisco’s software-defined stack, sold a combined 350 percent more than in the second quarter of last year.

That growth lifted the Application Centric Infrastructure (ACI) install base by an impressive 50 percent, with the company saying that 1,700 organizations are now running the platform in their data centers. Cisco’s gains on the software-defined front contributed to a 11 percent overall revenue growth for its core switching business to $3.6 billion, although CEO John Chambers (above) warned that the double-digit momentum may not last.

That’s to be expected as the company shifts its focus from the traditional products that still account for a sizable portion of its income to ACI, but other businesses continue going strong nonetheless. Converged infrastructure sales soared 40 percent to $776 million in the second quarter and as revenue from wireless networking equipment jumped 19 percent and demand for traditional routers gained a modest two percent.

Cisco is also emerging as a force to be reckoned with in the security world thanks to a string of acquisitions over recent quarters that most recently saw it pick up consultancy Neohapsis Inc. to help customers implement its growing selection of network protection solutions. Revenue in the segment climbed 6 percent to a healthy $416 million.

Added up, Cisco saw the top line rise 7 percent to $11.9 billion, which sent net income up 68 percent to $1.43 billion despite the costs from the massive restructuring it has been undergoing. The company’s stock followed suit, jumping more than nine percent on the news of the stellar quarter. But CEO Chambers acknowledged during the earnings call that the outlook is not without challenges.

The networking kingpin faces a dual threat from both its traditional rivals, which are also working on adapting new software-defined paradigm, and emerging players leading a transition to white-box architectures of the type used by the world’s top data center operators. That shift saw demand for Cisco’s gear drop one percent among service providers in the second quarter, a trend Chambers is keen on beating to the enterprise.

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