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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Techplayer who wrote (28078)	9/2/1999 7:37:00 AM
From: elmatador	Read Replies (1) \| Respond to of 77397

Insurers must race to embrace E-Age -IBM. Remember I mentioning all those mainframes with all the data of insurance companies? Now IBM starts pushing them. Everything is falling in place. The Slicon Cockroaches -data from Mainframes, to desktops and back again will fill in the next next generation networks. Insurers must race to embrace E-Age -IBM BY ABIGAIL LEVENE ROME (Reuters) - The Internet will turn from bright opportunity to a dark threat for insurers unless they hurry to embrace the electronic age, an IBM executive warned Wednesday. ``My biggest concern for this sector is that it's not moving fast enough into the e-world,' Ginni Rometty, general manager of IBM's global insurance sector, told Reuters in an interview. Rometty, in Rome for IBM's global insurance executive conference, said many insurers were doing little to make the wholesale change demanded by the electronic age. ``The world of the Internet brings great opportunity but if you do nothing it's a great threat,' she said. IBM Global Insurance is the leading provider of information technology business solutions to the insurance and financial services industry. Rometty highlighted a distinction between e-commerce -- selling online -- and e-business as a whole, which required fundamental change in companies' working practices. ``E-business is much more than just selling over the Internet, it's changing the way the whole back office works,' she said. ``That's why it's a great threat -- in the process of changing your back office it changes all your economics.' Insurers must focus on areas like customer loyalty, boosting global competitiveness, capturing financial services market share and selling and offering services online, she believes. The Internet creates a global competitiveness challenge even for those without a worldwide presence, while customers are growing better informed. She said data showed four percent of cars in the United States were bought on the Internet last year, while 20 percent of cars were researched online -- and then bought at a lower price. ``You have a more knowledgeable consumer out there so you may as well play a role in how they get educated,' Rometty said, emphasizing the importance of providing service and information. Insurers must go head-to-head with financial services firms. U.S. figures show insurance companies' retirement assets under management have increased by six percent a year since 1990, but financial services companies have seen growth of almost twice that rate. ``That's a big market share for insurance companies to go and take a bite out of,' she said. Insurance, which is one of the biggest industry sectors for IBM in revenue terms, makes external IT spending of around $23 billion a year, a sum seen growing around nine percent annually, Rometty said.. ``It's a wonderful place to be right now. This is a good industry, it's a rock solid industry,' she said, but the insurance sector's success hardened its resistance to change. Time is of the essence, Rometty said. ``The time to do it is now, because when you start talking about the whole way the company works in the back room, it won't happen overnight.' International Business Machines Corp, where Rometty has worked for 18 years, was itself jolted into profound change after a crisis early this decade when it hemorrhaged money and lost sight of where it was going. ``As we saw at IBM, the greatest thing to help you change is a crisis,' said Rometty. ``One thing we learned from that is that the edge is never far away.'

To: Techplayer who wrote (28078)	9/2/1999 9:26:00 AM
From: Zoltan!	Respond to of 77397

I believe your implication is correct. But let's say that support is somewhat fungible, these vast new recruits via IBM should allow Cisco to focus more attention on larger customers. I would think that 130,000 should provide an assist while KPMG ramps up: For Cisco, the deal eliminates a competing maker of networking hardware, and is an attempt to harness IBM's 130,000-person services group as an additional sales force. Cisco doesn't have a large internal services department and relies on outside consultants such as Andersen Consulting to help customers design, install and maintain networks. Cisco last month purchased a 19.9% stake in the consulting arm of Big Five accounting firm KPMG LLC to augment its consulting force. Message 11126237 Another story: September 01, 1999 Deal expands Cisco's empire By John Shinal SILICON VALLEY. 09:10 AM EDT—It took four months, lots of attorney overtime and a 20-page contract to devise a plan that boosts Cisco's (nasdaq: CSCO) networking empire and lets IBM (nyse: IBM) exit the market gracefully. The resulting agreement presents a large revenue opportunity to Cisco, which will get most of IBM's networking customers and all of its patents covering routers and Ethernet switches. Yet it should also boost chip sales for IBM and allow the world's largest computer company to focus on its more profitable units. Cisco, which was already among the top five networking vendors whose gear was sold by the Global Services arm of IBM, will likely move to the top of that list as IBM's army is trained to support Cisco products. "It puts more feet on the street selling Cisco's equipment," says Brendan Hannigan, an analyst with Cambridge, Mass.-based market research firm Forrester Research. Cisco and IBM will also work together to create new products to make it easier for existing IBM customers to convert their networks to Cisco technologies, says Michel Mayer, general manager of IBM's networking hardware division. While IBM will still make some older networking gear and the Ethernet adapter cards that connect PCs to networks, the deal takes Big Blue out of a business where it struggled amid fierce competition from Cisco, 3Com (nasdaq: COMS) and others. Although IBM was only a niche player in routers and switches, the company got about $1 billion of its $81 billion in revenue last year from sales of networking equipment. Cisco will now have a good chance to turn most, if not all, of those accounts into Cisco ones. "It's a great move for Cisco because it takes one of their competitors out of the business," says Chris Stix, an analyst with SG Cowen Securities who rates Cisco a "strong buy." Stix estimates that Cisco will get a revenue boost of about $700 million annually for the five years covered by the agreement. Selby Wellman, senior vice president of Cisco's Interworks business unit, put the figure between $3 billion and $5 billion over five years. Cisco had sales of $12 billion for the fiscal year ended in July. In exchange, Cisco agreed to increase the amount of products it buys from IBM to $2 billion over five years. Although neither company would say publicly how much Cisco had been spending, a person familiar with the situation said Cisco bought less than $200 million worth of chips, storage devices, laptops and other products from IBM last year. All of the increase will come from chip sales, says Kevin Reardon, director of strategy for IBM's technology group. Yet IBM isn't likely to see a big boost right away. "It will take time for that spending to ramp up," says Reardon. "[The $2 billion] will probably be weighted toward the back end of the five years." That should give IBM a boost as it battles Intel (nasdaq: INTC), which is making a push into networking chips, and smaller chipmaking rivals like MMC Networks (nasdaq: MMCN). Earlier this year Intel bought Level One, a maker of chips used in Ethernet equipment, and is expected to unveil new networking products next month. MMC was among the biggest losers in the wake of the agreement. The company, which gets 51% of its revenue from Cisco and another 23% from IBM, saw its shares fall 38% after the agreement was unveiled. While there is a contractual agreement for Cisco to buy IBM chips, its fulfillment hinges on IBM's ability to meet certain technical specifications and benchmarks for chip yield set by Cisco, says Wellman. "If IBM can meet those goals, we will do business with them. If not, we will continue to work with other vendors to meet our needs," he says. Cisco rival 3Com, which was among the top vendors pushed by IBM Global Services and French telecommunications giant Alcatel SA (nyse: ALA) will also likely lose revenue as a result of the agreement. Earlier this year Alcatel bought Xylan, a small Cisco rival that got more than 10% of its revenue from a distribution agreement with IBM. As IBM sells more Cisco gear, it will mean less sales for Alcatel, 3Com and others. "This will be bad news for Alcatel," says Forrester's Hannigan. forbes.com