<<might take business from Ascend.>>
OK Stu, lets discuss this.
Heres how I see this:
CSCO is the Boogyman, the Big Bad Wolf, Jason, etc.
IMO, the market and newsmakers aren't too clear on the differences
between CSCO's primary business (routers and LAN stuff) and ASND's
primary business, RAS and now WAN core stuff via CSCC.
People assume that CSCO can just walk in and take over RAS from
ASND and COMS. Well IMO, it ain't gonna happen - at least in the near
future and not without a major fight. Here's why:
Say you are ISP "U" and you have committed to ASND products - hardware,
software and support. You have bought and tested your equipment, trained
your people, set up shop standards, policies, procedures, spare parts, overnight
shipping, lines of credit, etc.
More importantly, all your equipment is compatible - both hardware AND software and you
KNOW it works - and what to do when it fails.
Do you have problems? Of course, but your staff is trained and hopefully
ASND jumps through hoops when called (Mory are you listening?).
Now competitor "C" talks to vendor "U" and offers "compatible" equipment
at, say 20% lower costs. Do you jump? No. Not without bringing in the
products, pulling people off of other tasks to evaluate and FULLY TEST
the products. Then, even if they are somewhat better, it just is
not worth the time and effort to retrain, plan swapouts, set up
new policies and procedures, etc. to end up in basically the same spot.
In other words, the hidden costs outweigh the price cuts. So managment
says "nice try, but no thanks".
Now say the equipment is also better (faster, more port density, higher
reliability, etc.) - but not so much to be "head and shoulders"
better. Do you switch? Not smart management - unless there are other
issues like support, which may then become more important in the
decision making process.
Also, big customers like UUNET are almost certainly briefed under
a confidentially agreement (better be anyway) about ASND's UNANNOUNCED
products - in some cases up to a year ahead. This could include everything
from Alpha models to specific capabilities and probable price-points.
So when vendor "C" comes knocking, management will compare it to
what ASND has coming - not what is being sold today.
Finally, ASND has over a one year lead here. CSCO is behind the curve
in RAS - and again if Mory is doing his job when CSCO finally begins
making noise, he says "Ho, hum" and releases second generation products.
This issue is nothing but noise and ANALyst's (like COWEN) probably
don't have a clue as to how businesses really work internally.
No need to worry at this time. |
