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

To: The Phoenix who wrote (30832)	12/30/1999 2:38:00 PM
From: telecomguy	Read Replies (1) \| Respond to of 77400

Gary, ask Psinet (CEO Schrader said many times in the past few years that IP Telphony players like Psinet will "eat" the traditional Carriers for "lunch"). Ask Psinet how much revenue they are generating from IP Telephony as a % of their total revenue --- and don't forget we are not even talking about residential market since Psinet concentrates on commercial/corporate market. There anwer would be something like "not as much as we had hoped or expected" whereas the reality is that it is pretty close zero.

To: The Phoenix who wrote (30832)	1/1/2000 2:43:00 PM
From: telecomguy	Respond to of 77400

Challenge for Nortel is the reverse of Cisco...........they must learn to become a PRODUCT company as well as network build-out company. Of course they have already had lots of experience in the product side of the business since they've had history of developing and marketing enterprise PBX's and other communication gizmos -- quite successfully. But competing in the data world is a different game and in this theater (data, product distribution), Cisco is probably lot more aggressive and better marketeers than Nortel is right now............and perhaps this is one reason (among others) why Nortel is taking the approach of unbundling and licensing the router code to allow other more proficient "data product oriented" companies to develop routing functionalities into their existing hardware plaform. This has the dual advantage of unleashing innovative applications and also transfer the distribution, marketing function to the VAR's who are likely to be more efficient than Nortel (probably Nortel will retain the direct product development/distribution model for the mid to high-end market). Also this licensing approach to the router market is not simply a defensive move by Nortel --- it is also a way to address the low-end router market where it's not cost-efficient for Nortel to market directly ........and the growth potential for the low-end is probably lot higher than in the high-end which is already reaching full saturation in terms of router penetration. Overall, a very smart move by Nortel in my view and one that makes all kinds of sense anyway you look at it.