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Technology Stocks : Cascade Communications (CSCC)
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To: (no name provided) who wrote (2020)1/30/1997 10:18:00 PM
From: Lyle Abramowitz   of 3743
 
Engineer,

I think it is naive to believe that networking, VTCs and the like eliminate the geographic factors involved in a bi-coastal merger. Perhaps it's just that people are old fashioned and prefer direct personal interactions. I agree that it doesn't *have* to be that way but it still is, at least for the present.

I've personally been involved in work situations where there is an east coast presence and a west coast presence and it has always created difficulties. Always involved a lot of travel.

A good data point is to see what happened to BAY. It's been widely rumored that the former SynOptics and Wellfleet just don't mesh. I think that CSCO took note of that.

As you know CSCO had been accumulating shares of CSCC. I think they thought that CSCC was too expensive (a fact we now know) and when they realized that STRM was a better value and practically in the same zip code the decision became easy.

I tend to think that CSCO was calling the shots in whatever merger negotiations took place with CSCC and not the other way around.

I would also not take the competition from CSCO/STRM too lightly. The deal only closed last summer and a lot of the competitive advantages for STRM are only starting to come into play. Such things as better pricing power for parts and better credit terms will improve price competitiveness. I'm sure that more significant factors such as totally integrated one-vendor network architectures will soon emerge.

Lyle
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