You know, most people prefer to have more data rather than less. You really like to jump in and criticize without posting any actual information. Allow me to address your points.
SS7/OSS - LU has no equivalent to the Stratus hardware solution - the 3B5 fault-tolerent platform has been officially scrapped. Lucent's SCP software has been unsuccessful - much smaller than Stratus' software business which is ~$90 million. Not too much overlap ($30-40million?) and pretty clear what will remain and what will go.
xDSL - While both companies offer xDSL solutions, the platform for delivery is very different. Ascend has sold xDSL to ISPs on its RAC, LU sells it to RBOCs on DLCs and #5s. No overlap
MX1000 - shipping to one customer - Qualcomm. Privately LU is disappointed that it couldn't generate more interest - they think it is a good edge box. What ever is good will be included in next-generation ASND equipment. Total overlap $5 million tops, again crystal clear what stays and what goes.
Definity ATM - Perhaps you could stretch and say it overlaps with Sahara, but I seriously doubt that any customer would think so. I suspect that the next generation of this ENTERPRISE product will benefit from ASND's expertise.
PacketStar120 - does overlap with the Sahara gear at the high end and did not come with Yurie, but I do believe it is included in the numbers I got from one of my vendors. If not, it is not much more than $20-30 million.
PacketStar vs. IP Navigator - Some customers will use ATM switches to route IP, not all or even most but a significant some. Those customers rave about IP Navigator even though you think it a joke. PacketStar6400 is really more of an edge router, focused at the installed base of 7500s, complementing the IP navigator rather than overlapping. The more appropriate overlap would be the GRF and son of GRF which again are more core routers for customers that prefer their IP sans ATM. Overlap ~$20 million.
So adding this to my original $125 estimate you get $200-225. Still a drop in the bucket.
Where do LU revenues come from? 62% from carriers of which 45% is CO switching and voice access, 17% wireless, 16% cabling and fiber, 12% optical systems, 6% software and 4% other.
27% from enterprises: 44% PBX and KTS, 33% call centers, voice processing and messaging, 16% maintenance and professional services and 7% other.
10% from microelectronics - no breakdown
1% none of the above.
Where is the 45% overlap with Ascend? - LU's data networking fits neatly into its other categories.
Now on to the accusation that my numbers are fabricated. By that I assume that you are insinuating that I make them up, without any hard data. Well, realizing that most of my data sources systematically overcount Cisco's revenues (Dell'oro is the exception) there are some minor adjustments. However, most of my data networking data comes verbatim from Dell'oro, generally considered the lingua franca of market shares. Most of the rest comes from Cahner's InStat, typically without modification. The data that we piece together makes up less than 10% of Cisco's reported sales. If Cisco is willing to report its real revenue by product and tie it to its quarterly published results I'd take that as fact. Otherwise, I am working very hard to get the best picture I can get and trying to share at least parts of it with the thread. Post your own numbers if you think mine are so bad.
Now back to Cisco selling more to carriers than my estimate. Just because your cube mate tells you something doesn't mean that it is true. While Cisco does officially state that 30% of its sales come from carriers, when pushed they will admit that half of that comes from enterprise equipment resold by carriers - yes John Chambers admits that face to face - how about you Gary? I am not willing to count enterprise equipment sold in this way as carrier sales. Nor am I willing to count GSR12000s and BPXs sold to enterprises as carrier sales. The published numbers just do not back your claim of multibillion dollar carrier equipment/carrier customer sales. If they did, I would feel better about the money we still have in Cisco. If you have access to all the published numbers tell me who can verify your claims. If not, why are you making them? Ascend does about 90% sales to carriers - Lucent does $300 million or so (of course much of that is overlap). Of course if I count EVERYTHNG LU sells to carriers, relevant or not, Lucents sales to carriers are $20billion or more than twice the size of Cisco.
In the end, I believe your executives have a greater respect for the size of the challenge before them than you do, or than you pretend to have. I have repeatedly said that I have the greatest respect for the people of Cisco - perhaps even you although sometimes I wonder. I believe that you will emerge a winner. Just not at the expense of LU. |
