MSFT, DELL and Cisco are very differnet, Despite John C. wants to hype Cisco in the same category of MSFT and Intel. Cisco is in a market where standard protocol makes 90% of Cisco's gears replaceable today. If you pay more attentions to Cisco sequential earning growth, it is really slowing down (48c, 45c the last two quarters).
Cisco products is in much weaker positions today. StrataCom acquisition is not a smooth transition and its product by default running proprietary protocol that does not work with anybody else. Ascend is doing quite well competing with weak StrataCom carrier switch. 8500 and 5500 are such a weak products, CS Yago, LU Prominent, Extreme (doing really well), 3COM and Foundry are all taking makret shares from it (not yet in ISP, but definitely in Enterprise, I know at least 10 Forture 500 companies switched from Cisco Cat 5500 to one of the above company in the last 3 months.
No doubt Cisco has its strength - strong marketing, huge sales force, built-in good debugging tools into the products, mind shares, tight account control, using high stock value to leverage and so on. But it also carries artificially high stock price and risk of margin going down or loss of market share. Of course, anybody with networking knowledge knows voice/data convergence is at least 3-4 years off for any significant revenues, it is more of vision and marketing tools to win the hearts of CIO by talking it up. I also think it will be a big challenge for Johnny C. to motivate his mostly average-in-talent millionaire employee.
MSFT and DELL go up more than Cisco this year and fell off
much less % in the past month - for a good reason. |
