Cisco CEO Gives Investors An Earful
[Fascinating/bizarre comments by Chambers on unhealthy competition and LU refusal to partner with CSCO. Who does LU think they are anyway? The nerve.]
(05/06/98; 5:37 p.m. ET)
By Gabrielle Jonas, TechInvestor
techweb.com
Cisco's president and CEO, John T. Chambers, told
investors Tuesday that competition was the networking
company's greatest challenge.
"We remain paranoid about the competition both from
start-ups and traditional competitors in the voice
market," Chambers said. "Competition continues to
intensify. Many enjoy a large install base, and the large players with deep pockets will make it challenging."
Competition is not always a healthy thing, Chambers said. "It could result in growth that is slower than the industry," he said. "And if not resolved, that growth
could reverse."
Chambers said he expects continued consolidation in
the networking industry. "Though in the longer term,
there may be less fluctuation in the service provider
industry as it diversifies to voice and other services," he said.
"Indeed, we expect acquisitions, partnerships, and
mergers to continue with increasing frequency in our
industry," Chamber said. "Our ability to partner and
acquire is a major sustainable advantage at Cisco."
Investors have been looking forward to Cisco's
potential partnerships with Lucent Technologies [LU] as well as Northern Telecom [NT]. But that does not seem to be in the offing, he said. "Candidly, my optimism is wearing down," Chambers said.
"The definition of partnership has just not worked with Lucent," he said. "They want to play across the board, and we were unable to get a good relationship going there."
Regarding an alliance with Nortel, Chambers said the
companies have worked together effectively and will
continue to do so on the acquisition of Netspeed. But
he said the question remains, "Can we truly share the
market?"
Chambers fell on his sword when talking about the
network service outage suffered under AT&T's and
Cisco's watch. "You learn more about a company and a
management team in a period of stress than any other
time," Chambers said.
"AT&T was an excellent partner," he said, adding that
most of the responsibility was Cisco's. "We're working to prevent this type of network failure in the future." |
