joe,
Good post! See, you do better when you're ranting and
raving about technical aspects of the network sector. :-)
Keep ranting and raving!!
Well, if you REALLY want me to ;-)
Couple of things I would add for further understanding,
and please correct me if I'm wrong.
1) Because LU, NT are becoming obsolete in a sense, that's
why they're trying to acquire companies in group 4.
Yes and no. No doubt that is the "private" reason for doing. However, these mergers and acquisitions are sold to the public as "brodening our product offering and revenue base" as opposed to "necessary for us to stay in business 10 years down the road".
The group 1 companies have done very well to mask the trouble they are in, but it is finally starting to show up. The assault by everyone who is not in group 1 is starting to show up on their bottom line.
2) CSCO as of late is being compared to group 1, and since
some of group one has had preannoucements, CSCO is being
lumped in with them. They eventually would like to take over
group 1's line of business, but they are essentially doing
the work of group 3 and 4 (and like you said, "suffering
a death of a thousand cuts". But they will be strong for
a while because they have that encumbent customer base,
similar to how IBM had theirs
Joe, yes and no again. Yes CSCO has a good customer base. The problem is that CSCO's customers want to save money and if they can do it by buying equipment from other manufacturers they will do it. The price tag of an item is probably it's biggest selling point, assuming all the products you are reviewing are capable. Everyone in the industry knows that COMS is very solid in networking, they just never had the "enterprise" class equipment to sell. All these companies with CSCO routers are laden with COMS nics. It won't take much to switch them to COMS. You see COMS has an in as opposed to some of the group 4 companies, which have no in building presence at many companies.
CSCO is not dumb, so I expect them to come up with adjustments.
One of them might be getting into the SME space (small and medium
sized enterprises) which is a big focus of COMS.
CSCO doesn't know how to compete here. They would also be competeing with companies like INTC and COMS, both _VERY_ fierce competitors. I don't think CSCO understands just what is awaiting them. INTC is trying to make a serious go at networking and this will only hurt them more. If you want to add INTC to my list, as far as it's networking goes, it would have to be a group 3.5 company. Some of what COMS has to offer, but it's networking division isn't nearly solid enough to land it in group 3 with COMS.
3) I thought you might talk about all these companies that
are "rumored" to buy COMS. As you said, COMS is very different
from the companies in their data networking sector, this
is no accident, it's been Eric B's strategy for a while.
So, to suggest buyouts by the companies you mentioned or
by companies outside even the group you mentioned is a royal
pain in the butt to the buyer. It's just not a "nice" solution
in anyway. I would appreciate it if there was some intelligent
talk about COMS merger rumors.
No one has the balls to buy COMS right now. The only company that could make it work would never be allowed due to regulatory concerns (INTC). No one else in the market place "gets it" with it comes to small and medium enterprise markets. That's why COMS dominates that segment so well. INTC is the only other company to "Get it" and they (as I said) would NEVER be allowed to buy COMS due to government interference.
All the other companies would like to buy COMS but know they don't have a clue. THat's why COMS hasn't been bought. It has nothing to do with price tag. COMS is a different breed of critter. You can't put a wolf into your chicken coup ;-)
Steve |
