I picked this up off Yahoo msg board;From CSCO
Thanks for the confidence!
I would like to point out some numbers about actual Internet market penetration:
nua.ie
Their estimate, kept reasonably up-to-date, is based on
various survey mechanisms. Their current estimation is
roughly 90 million (89 million as of November 1997) worlwide
Internet users, out of roughly 5.88 Billion people in the world:
census.gov
This represents roughly only 1.5% of the total world population
is currently on the Internet.
Certain markets are a lot more saturated, others are developing, while a few are neutral or even retrograde. For a specific instance of the super-saturated, take the US, which has an population currently estimated at 268 Million:
census.gov
The US is estimated to have between 40-54 Million users of the
Internet, or roughly 15%-20% market penetration. That's ten times or more the world average.
Most people agree the US is leading the fray here. Today, it represents about half the current market, yet is only 4.5% of total world population.
Compare this with China, which is 20-25% of world population, but has very few users actually interconnected on the Internet (est. at 150,000-200,000 individuals as per Nua).
Japan is another very special case. A few years ago there were a lot of PCs, but LANs were not a requirement for use, nor
even modems. Penetration of networked devices was low, even for business. Not everyone, but a great deal of people did standalone
computing. Therefore Japan c. 1994 was, for networking, more like the US c. 1989. Desktop connectivity was the first priority. The Web
was Cisco partnered closely with the leaders of that market, from NTT to NEC, etc., and I know we have a good leadership
position there now.
Now, out of a population of 126 Million:
stat.go.jp
Japan can claim 8.0-8.6 Million Internet users, a penetration rate of 6.3-6.8%. While this is significantly higher than the world average, you can see this is still about 30-45% of the US pentration.
However, the Asian market is a different one today than it was in 1991-1996. For Cisco, or for anyone else, to make the same kind of inroads elsewhere in Asia today requires they look at the opportunities and risks in that market now.
Suddenly, the demand for ramp-up around the world for this infrastructure is growing, but the market stability to support it
is, for now, shaky. Yes, Cisco will gain by a large part of this roll-out, but other players will as well. For some of these
players, winning the business of a market could cost them more than the market is worth (once regulations, tarriffs, monetary
changes, and other business considerations are factored in). For many countries, the roll-out of Internet services cannot occur until
the rollout of basic telephony infrastructure. For those countries, look at local loop and premises equipment companies to
prosper prior to adoption of the "big iron".
One of my favorites for local loop gear is Advanced Fiber Comm (AFCI), as well as Westell (WSTL) and DSC Commun (DIGI). The "traditional" PSTN companies, such as NT, Lucent, Siemens, Alcatel, and the "challengers" from data networking, such as Cisco, Ascend, Bay, 3Com, etc., are be thinking about the challenges inherent in building out services into these new markets. What works great here in the US in a super-saturated market needs to be rethought in the developing world.
Cisco has a pretty good track record in this regard, servicing both leading and developing markets, but I think we're all being a little thoughtful of the market in general, and a little paranoid of each other, as Andy Grove suggests, to keep ourselves aware of the changing environment and market.
Thanks for the kind words of support for Cisco.
-Peter Corless.
Content Manager, Software Center
Cisco Connection Online
cisco.com |
