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Wunderkind Chalmers talks:
Cisco Eyes Major Expansion Acquisition streak to continue as company follows Chamber's vision
Jeremiah Caron, tele.com
Already one of the largest networking equipment suppliers, in terms of influence if not actual annual
revenues, an unsatisfied Cisco Systems Inc. is getting set for what it intends to be dramatic growth.
During interviews and press conferences here at the Telecom 99 show in
Geneva, company executives were clear about the fact that its
notoriously voracious appetite for strategic acquisitions is nowhere near
sated. In addition, the executives pinpointed new markets it intends to
enter, either through buy-outs or internal development.
"The pace of acquisitions of the past months will be typical of the future,"
said John Chambers, Cisco's chairman and CEO, during a press
conference Monday. The company has scooped up ten companies
already this year, and expects to nab five to ten more by the end of the
year. "This speaks to how broad the marketplace is we're trying to
address," added Chambers.
The chief executive was quick to point out that these investments are in
addition to the 13.5-percent of revenue it intends to spend on internal R&D this year.
From a technology standpoint, the company is focusing heavily on optical networking, broadband
wireless, cable technology and software platforms targeted to service providers.
While the company derives 50 percent of its revenue outside the U.S., it expects to accelerate
expansion into new markets--including regions that are just now figuring out ways to build
communications infrastructures. "It would be a tragedy for emerging nations to build-out on dead
technology," said Chambers, referring to the circuit-switched networks that make up today's public
switched telephone network (PSTN).
Cisco remains undaunted by claims that the Internet, and Internet Protocol (IP) technology in
general, will never be robust enough to support carrier-class voice traffic. It asserts that the industry
is two-to-three years into a five-year journey that supports its vision. Cisco also contends that some
incumbent carriers are already getting more revenue from data networks than from voice networks,
though it would not specify which carriers.
Finally, Chambers couldn't resist taking a potshot at its rival, Lucent Technologies Inc.--whose
equipment was blamed for the recent MCI Worldcom Inc. network outage--while discussing the
relative reliability of data and telecommunications gear. "One of our competitors found out the hard
way that just because you're reliable in voice doesn't mean you're reliable in data," he said. |
