Stockman!
"However you should check out Microsoft, DELL and Lucent to see what their growth rates are."
Huh?
Lucent rev. growth year/year for latest quarter: 17%
Microsoft: 18%
Cisco: 33%
Dell 50%
Bay: 8%
What the heck is your point?
So even if that 27% in shared media shrinks to 10%, where does that business go? It goes to stackable switches, which are, and will continue to be hit by major price reduction (much initiated by Bay). That still spells a heck of a lot of revenue tied to low growth markets. You are really fooling yourself if you think this issue is going to magically disappear for Bay.
Latest market share results show that Cisco has overtaken both 3Com/USR and Ascend for No. 1 position in remote access servers and concentrators, and this sizable business is growing in "comfortable double digits" according to Chambers on the conference call. This isn't an insignificant part of Cisco's business.
The only thing you hear from Cisco each conference call is that the Stratacom business breaks revenue records each quarter. Not exactly a business being "soundly whipped". Latest market share reports show Cisco either leading or in a close race with Ascend for ATM and Frame Relay WAN switches. No one is soundly whipping Cisco. Plus, Cisco just announced several new voice/data products in this space.
Cisco showed significant growth in switching and market share gains in both high- and low-end (isn't this Bay's strength?) switching. That's more than just the Catalyst stuff. Remote Access business is booming (5200/5300/5800), Stratacom stuff, according to conference call, continues to grow. Routers are still selling at huge amounts. While the market isn't growing like switching, it isn't going to go away any time soon. High-end switching domination will offset an eventual decrease in traditional router sales.
And about that article -- it essentially points out that Cisco is absolutely dominating its traditional competitors, including Bay. Cisco grows above 30%, Bay, 3Com, Cabletron continue to either shrink or have stalled growth. Now who's stock should I buy? You can't tell me or the countless others smart enough to buy Cisco (and have done quite well financially with it) that the company stinks. You have no sound arguments to back up buying Bay over Cisco. You certainly do an effective job of pointing out Cisco's challenges, but given their past record, their vastly superior sales force, and their vastly superior execution to date, I would place my bet on Cisco overcoming their challenges over Bay overcoming its greater challenges.
You seem to dismiss the success Cisco has enjoyed to date. Three years ago, LAN switching was going to kill Cisco and routers. Now? Cisco dominates both markets. Why? Execution, top sales force, top marketing, top customer service and support, top management. You make your self look pretty foolish to continually label a company like Cisco as "smelly", liars, lousy investment, etc. Your story just doesn't fit. I'll "stay tuned", but I hate to tell you that I'll be tuned into Cisco vs. Lucent. Cisco vs. Bay is what I call "old news." |
