Oh, I don't think I am looking at Cisco from a commodity standpoint at all. Rather, I think the overall enterprise data networking market will be slightly slower growth in 1999 (11-13%) than in 1998 (15%) due to Y2K, global economic uncertainty, etc.. Cisco's extraordinary selling machine, "systems" approach and strong (but not usually industry best) products will allow them to take substantial market share in this space, just not as much as in 1998.
In the carrier market I have projected long-term success for Cisco, but feel that it will take 24-36 months before Cisco really takes off here - ie. have carrier sales of carrier equipment pushing 50% of total. BTW LU need not take a backseat to Cisco when it comes to a "systems approach" to sales.
Three take aways. 1. Underestimate LU/ASND at your own peril. John Chambers does not, and you shouldn't either. A healthy paranoia is appropriate. 2. Cisco is boldly undertaking to remake itself as a carrier equipment vendor. This is absolutely the right thing to do,and I believe it will be successful, but its not done yet. 3. Companies undergoing a strategic make-over usually run into near-term difficulties, even when the transition turns out to be wildly successful, as I believe this one will be.
Frank, on your original question - the big ISPs I have talked to are all trialling the Juniper box, the Lucent box and a variety of other alternatives. ISPs desparately need something faster than the GSR12000, and if somebody else can provide it, they will buy it. Most would also welcome a credible second source and all would like lower prices. I don't think Cisco would lose more than 5-10% market share, but lower prices could hurt alot. |
