Amy J said: "pfalk, what's your opinion on Cisco relative to Skype - specifically, does Cisco lose or win here? At first glance, on the VoIP side it looks like it would be a negative to Cisco, but on the increased traffic side it's a win for Cisco. Have you thought thru how that nets out for Cisco? "
I think it's an unqualified plus. Cisco hasn't really tried much to get into the consumer IAD market (except for what Linksys is doing) - So, the fact that Skype (largely) bypasses the need for IADs, (i.e. you typically use your PC rather than special HW), doesn't hurt Cisco.
However, Cisco benefits greatly in that all this VoIP traffic will drive new network upgrades.
The greatest benefit for Cisco, comes from another aspect however: Skype validates the concept of VoIP, and will drive the adoption of VoIP in the Enterprise market, where Cisco will really benefit.
So, on the downside, Skype doesn't hurt Cisco, and on the upside, Skype's success does "expand the market" for Cisco's Gateways, Gatekeepers and call managers, and all the VoIP increases network traffic, which will prompt the further replacement of old gear (remember VoIP does require Quality of Service able networks).
A while back we did a calculation here on SI, where we reached the conclusion that VoIP (alone) could drive a doubling of Cisco revenue in a 5 to 7 year timeframe. That's in addition to any revenue increases due to Storage networks and WLAN, and general market increases.
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