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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 78.030.0%Dec 24 12:59 PM EST
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To: Mighty Mizzou who wrote (26413)6/20/1999 12:38:00 PM
From: The Phoenix  Read Replies (1) of 77400
 
MM,

You might want to take a look closer at Transmedia. (I assume that's who you're referring to).

Transmedia provides the convergence/integration point (read gateway) from classic old world networks to new world IP networks. This is the very area you said CSCO was weak in a few day's ago. IF this market is a multi-billion dollar market as everyone says (including LU) it would seem that a $407M acquisition is mice-nuts compared to the return.

Cisco is very quickly building the requisite telephony experience to create the beachhead required to penetrate the circuit switched market. With partnerships like that with QWST, CSCO will put more and more pressure on the traditional carriers to move to more IP delivery of communications. LU will win some of these accounts and CSCO will win some. What's of note however is that these are accounts that were traditionally telephony accounts - accounts that CSCO didn't even hava a shot at last year.... now CSCO does. CSCO has taken the battle onto LU's turf and are growing their total available market. LU and ASND have done little to penetrate the enterprise...they say they don't want to because it's not a growth market. This is a mistake. It gives CSCO the foundation (unattacked revenue and earnings) from which to take the fight to LU. LU is now on the defensive and acquisitions like Transmedia are far more significant than buying a couple of Brazilian companies solely to get one long term contract in Brazil. That is short sighted move by LU, CSCO is investing for the future.

OG
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