Amy,
Given the method in which you posted me back I find it difficult to respond. However I'll take a couple of really quick stabs here and feel free to ask questions.
First Intel's initial foray into the NIC and hub space is to enable faster communications (eliminate bottlenecks) so that the PC's processing power is being exercised to the fullest. Furthermore Intel's success in these market is in large part due to their ability to bundle these devices onto the platform. Intel has at no point in their history shown an ability to succeed in a systems business. Building networks is a whole lot different than building processors. Intel certainly has the manpower and money to compete in the networking market but doing so would mean spending less time on the core products - flash, embedded, central/network processing.
Intel wants to be the building blocks to this market. If they choose to compete with system level equipment what communciations vendor would use their building blocks? That would be like fueling your competition??? Intel can not afford to enter the communications market - they simply want communications vendors to use their components.
Of course this leads to the next point - creating a standard platform for communications...thereby turning the LU's, NT's, and CSCO's of the world into DELL, CPQ, GTW type compaines. Well, in the PC/Server world this is a doable task, however today communications equipment is quite diverse. With Microsoft's help there is no-doubt that PC platforms will be used in some lower-end communications environements but on the whole these platforms will always lack the breadth of technologies and ability to scale.
Yes, CSCO could partner with INTC with INTC selling the platforms and CSCO selling the OS - where IOS would become the WIN of networking. In reality CSCO is the only company that could really do this since they are the only company that has nearly all products on a common OS. LU and NT have a variety of operating systems. Microsoft could do it as well, but Microsoft hasn't got the capability within their OS or the perception of reliability to fill the market requirements. Do you think CSCO would sell the farm and get out of the network hardware business? What benefit would this provide to Cisco and to Cisco's customers. Would doing so help CSCO expand thier business into the carriers market? Do you think Carriers would accept standard non-NEB's compliant platforms for supporting their businesses??? Furthermore do you think INTC wants to deal with all that overhead, cost, and engineering????
In the end INTC wants to sell components. They want to be the component supplier to PC users, to server users, to the internet, and now to networking companies. Sometimes these components mean delivering more turn key solutions - such as in the PC. But in other cases they require simply the components themsevles which when uses allow each vendor to differentiate their products.
On another point. INTC knows nothing about selling, servicing and supporting a networking installation. the design, installation and support requirements are orthoginal to INTC's business model. INTC could certainly build a team to accomplish such a thing however once again this would merely reduce the market for INTC networking components. In the end it is counter productive for INTC to get more into networking - unless they intend to own the entire market and concede that carrier oriented vendors such as LU and NT will not purchase their silicon.
Assume your case...CSCO is gone - there is no one left to sell networking silicon to. Furthermore INTC has probably lost the PC processor war by then because of spending so much time focusing and buildng networking (they can't win at both) AMD, Cyrix, and CSCO are not slouch companies. So INTC transforms themselves into a networking company...say after about 10 years of effort. Are the shareholders better or worse off? Would the shareholders be better off if INTC builds alliances with communications vendors allowing INTC to focus on their core competency - building silicon. here INTC doesn't have the cost of competing, maintains their leadership in network processing and builds their commincations business by delivering networking components to the communications vendors.
Of course, LU makes their own silicon, CSCO now has a pact with IBM, so INTC may have a tough road to go...
Oh, one more thing. re..
Re: "- The IXA provides foundation technologies. Most of what Cisco provides will stil be required."
For how long? The reasons are...
To ask such a question tells me that you might want to consider looking at the evolution in the networking market.. in fact look at the evolution of technology period. Technology continues to evolve - creating new functions and uses for products. At no point in our short history has all functions been captured in silicon...software has always been required - both OS's and applications. To assume that the networking software that CSCO builds will be obsoleted by INTC silicon is .... well..... a bad assumption given history.
OG |
