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

To: Kenneth E. Phillipps who wrote (30366)	12/16/1999 10:24:00 PM
From: telecomguy	Read Replies (4) \| Respond to of 77400

Is Cisco all of a sudden displaying fiscal responsibility that they are no longer willing to pay through the nose for nascent start-ups with half-finished products? No. The reality is that Cisco has finally figured out that paying excessive amount of $ to acquire still-born technology is NOT going to win them Carrier contracts! This is what happens when you get burned with Cerent type of buyout - especially now that they will have to treat write off goodwill and not hide it under Pooling of Interest and hit them in the bottom line -- thereby staining their nice record of profitability (which probably wouldn't look so hot if they treated the past purchases properly and wrote off the humongous goodwill they paid) The basic hole in Cisco's recent approach to "buy" their way into the Carrier market like they did in the Enterprise market is that in the Carrier market, ability to IMPLEMENT, INEGRATE, and SUPPORT network infrastructure buildout is in many cases just as, of if not, more important than merely selling the newest technology-in-a-box. It's like this for those Cisco followers who fail to understand what I've been saying for the past few weeks. If a company like Boeing buys Ferrari because they want to diversify into the car mfg business, do we really believe that they will succeed like they have in the aircraft mfg business? Obviously not --- at least not without spending about $50 billions of dollars and 10 years to learn the automotive business. Why should Cisco have the audacity to simply go out and pay $10 billion+ for couple of technology companies with unfinished, unproven product and then expect to all of a sudden start winning $500 million dollar carrier contracts like Nortel? They shouldn't. They need to learn the Carrier Network infrastructure business and that my friends take time, money, right enginnering/support infrastructure, and understanding of the business from the nuts & bolts all the way up to how to bribe the local PTT decision makers who I am sure are very political animals. They are slowly learning and due to the fact that the network infrastructure business is bursting with upgrades & next-gen entrants, Cisco by default will continue to win few contracts here & there with few odd contracts where they get kicked out for non-performance. It's an expensive lesson they are going through now, and it remains to be seen whether the payoff will offset the investment and if not -- who will pay for it? The cisco shareholders of course!