They are winning most every major new deal out there. They also have ATM access technology for the enterprise and carrier edge that NN can't compete with.
Ascend did not win SBC --- with a footprint in 40% of RBOC space --- nor did they win BT, AT&T, Telecom South Africa, New Zealand Telekom, Cable & Wireless, and a long list of others.
CSCO's Stratacom stuff is behind NN, but CSCO can leverage the carrier's dependence on CSCO's routing base, and new CSCO switches are around the corner. However, CSCO wants the world to go packet - they would rather have routers control the carrier core as compared to ATM switches from Stratacom. This may hurt them long term, but it won't be NN who stings them - it will be ASND or someone else.
Cisco is behind NN on the carrier class switches and the jury is still out on NN versus ASND. In your opinion how will the landscape change if LU and NN team up?
NN's problems? They got distracted trying to be an enterprise player with ACC, UB, and that VIVID stuff. No profits to show from it. Also the high end IP stuff isn't there to date, so their core competency is the 36170 line, and it is under severe attack from ASND. I think their best bet is to marry themselves with someone who can use their market presence and ATM knowledge, and then beef up their R&D, mktg., and bring in IP from somewhere else. On their own, I think NN gradually loses share. (both market share and share price)
Selling ACC for over $250 million CDN profit represents I believe 5 times return of capital. A move that's positioned themselves to fill gaps where needed. I agree UB was a total disaster. So too was 3Coms' purchase of USRX, or so it appears. Mistakes are made. I agree NN could maximize their strengths through a strategic marriage. I also agree it won't be NN who stings CSCO, though it could be NN along with their as-yet-unannounced partner.
The landscape is changing so quickly, I find myself walking softly when it comes to making predictions. I recall asking an old-timer in Jackson Hole, Wyoming, about the weather, and he said, "Dunno. But, if you don't like it, wait five minutes."
Incidentally, I heard yesterday Cisco's OC-48 has been pushed back. What are you hearing?
Later --
Pat
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