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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 73.87-0.1%Jan 9 9:30 AM EST
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To: DownSouth who wrote (20833)1/15/1999 6:21:00 PM
From: Mr.Fun  Read Replies (2) of 77400
 
In the carrier market, LU has four times as many sales reps and systems engineers swarming the customer than CSCO. Granted LU has a much broader product line for Carriers than CSCO, but there is a reason why CSCO is hiring all the experienced sales reps it can get its hands on, taking operating expenses up to 36% of sales for 1999 vs. 33% in 1998.

The LU sales model is to do what ever it takes to please the customer, and it usually takes engineers on site. These engineers then plant the seeds of Lucent preference in the minds of all the customer engineers whose ass they are saving. Selling to the CEO does not work in the carrier market - you have to be positioned at every level of the organization. Those customer engineers have alot of say so in what the typical RBOC or IXC buys.

Right now, Cisco is well positioned in the internet business unit of the typical carrier and in some select ATM shops, and that's a great asset given how fast the internet is growing. But 90% of a typical carrier's profits come from voice. Cisco is absolutely not positioned with that part of the typical carrier organization ... today. Indeed for its future carrier sales, Cisco is adopting something that looks alot more like the Lucent high-touch sales model. As for who wins, I think SI readers are a little too obsessed with CSCO vs. LU. Each will win their share. I feel more sorry for the other guys. Well NT will probably get a decent share too.
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