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

To: telecomguy who wrote (30493)	12/20/1999 4:08:00 PM
From: Kenneth E. Phillipps	Respond to of 77400

telecomguy - I don't know why the acquired Pirelli. Any guess is just speculation. My guess is they saw a bargain at an irresistable price.

To: telecomguy who wrote (30493)	12/20/1999 5:04:00 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

Hi Telecom guy. This is why I think Cisco can compete effectively with Nortel. Cisco has one of the best acquisition teams in the industry, bar none. It is hard to believe that they can buy their way into an industry, and I know you have stated many times that they won't be able to buy their way into the telecom sector, but I think they are doing it as we speak. In a year or two, you and I will both be amazed at the progress Cisco has made in getting into the core markets that the Nortel's and Lucent's currently have in their pocket. What a great ride this company has been!

To: telecomguy who wrote (30493)	12/20/1999 6:13:00 PM
From: Mr.Fun	Read Replies (3) \| Respond to of 77400

Thoughts on Pirelli: 1. Pirelli's current products aren't that great - there is a reputation for poor reliability and service, not unlike Italian cars. Note, Pirelli was very early to market with DWDM, placing its first system at MCI in 1995. NT and LU have blown by Pirelli, and now each has 5 times the DWDM sales (as per Dell'oro). Pirelli's poster child accounts - Frontier, DT and FT - have each subsequently chosen another vendor for the bulk of current deployments (LU at GLBX and DT, ALA at FT). 2. The intellectual property at Pirelli is likely to be quite valuable. In particular, they are rumored to have the leading research work on soliton-based systems, the technology being used by Qtera and Corvis for ultra-long-haul systems. $2.15B is a bargain next to the alternatives, if this is why Cisco went for Pirelli. 3. Integration issues will be a bear. Scuttlebutt is that Pirelli lost alot of its younger talent over the last 18 months, leaving a fairly intrenched and proud culture. Let's hope Cisco's self-serving denuciation of long-distance mergers was, in fact, just talk. 4. Cisco still isn't done if it wants to be a true full service optical vendor a la NT or LU. First, they need to develop an overarching management architecture. Second, they need programable high-speed add/drop capability. 3rd, they need metro DWDM (and don't tell me Cerent will magically take the lead in this technology). 4th they need all-optical switching technology (Monterrey is Opto-electronic). 5th, they need to turn Pirelli's research into Solitons into a competitive ultra-long-haul solution. 5. I think this is a great deal for Cisco - It will sell a helluva lot more of Pirelli's so-so equipment than Pirelli, while gaining experience for the next generation. Listwin says $1B run-rate by end of 2000 - call it $750 M for the whole CY. This is an excellent source of sales growth to feed the street which clamors for 40% YoY for CY00. I do not expect dilution and given prices in this market, I call it a bargain. 6. I'm not too worried for NT and LU's optical businesses - each will be almost 10 times larger than Cisco in CY00, with the most respected research teams in the industry. I expect Cisco will take share from the other players in the market.