Lucent v. Cisco pathfinder.com
Hard to predict the outcome here. It's assumed that LU will be more aggressive in spending its newly appreciated stock currency to acquire a data networker like Ascend, once the tax shackles come off in October. Of course, nobody plays this game better than Mr. Chambers, and Cisco's currency has been appreciating for years. Advantage Cisco.
Core competency score heavily favors Lucent in optics. Cisco has been on the acquisition trail here to develop an all optical router. Electronics is just too slow. That is the whole point of DWDM. Lucent alreadt makes the NZF (non-zero dispersion shifted fiber) that is optimized for DWDM. Advantage Lucent.
Incumbency. Lucent dominates switches and lots of other telecom gear. Cisco dominates routers sold mainly to ISPs. IP, of course, doesn't need switches. The switching is on the periphery of the network, in the PC. (Gilder) The Fortune article refers to the new box as a type of hybrid between a switch and a router, as yet unnamed. In Fortune style, however, they do not delve on the specs or technology of such a device. The article points to McGinn's challenge to Lucent's troops to accomplish data networking including telephony over IP without sacrificing the essentials of reliability, flexability and enhanced services like caller ID and 800-numbers. Given Lucent's legendary technical skills, I would not put this challenge beyond them.
At this stage of the game, both Cisco and Lucent look like winners to me. The outcome of this war will not be path dependent, like that which is said to ensure MSFT's continuing dominance, absent DOJ intervention. Both firms have commanding market share in their respective domains and though the new frontier seems to be more in Cisco's backyard, Lucent has an impressive arsenal of human and intellectual capital as well as sheer size.
Stay tuned.
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