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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Benkea who wrote (47709)	4/22/2000 4:10:00 PM
From: Jorj X Mckie	Read Replies (2) \| Respond to of 99985

It might be constructive to find out how much of Cisco's revenues come from the dotcoms that you mention and how much comes from established old world businesses and service providers as well as what the future slices of the pie are expected to look like. Without that information, the author's "entire premise" is incomplete. IMVHO I think you've lost site of the author's entire premise. The MASSIVE build out which can be found in TRAILING earnings, is LARGELY a result of capital markets which were more silly and generous than ever before. Should every company who chooses to put a .com behind its' name fail to be able to collect $100 mil in an IPO (plus follow ons and debt offerings), they will not have the dough for infrastructure since 99.5% of them are hemoraging cash. But then again, CSCO will just finance it interest and payment free until the equipment becomes obsolete in the hope that the customer (bleeding $ millions annually) will still be around to pay.

To: Benkea who wrote (47709)	4/22/2000 7:01:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 99985

Yep! I'm saying that there is no basis in fact for this comment. Given that something south of 40% of Cisco's business is to service providers and of that maybe 10% is to CLEC's and CLEC's are the only "particularly" identified category within the 10Q as requesting and getting financing from CSCO. Furthermore CLEC's don't go belly up - they simply pass the costs on to customers. We are experiencing increased demands for customer financing and leasing solutions, particularly from competitive local exchange carriers ("CLECs"). CLECs typically finance significant networking infrastructure deployments through alternative forms of financing, including leasing, through us. Yes, there is an off handed mention of exposure to Asia - which accounts for what.... less than 5% of CSCO's overall business. So yes, I'm saying a statement suggesting 20% is without basis in fact. That is what I am saying. Wouldn't be the first time an analyst at a firm didn't know what he/she was talking about. I continue to be surprised by the amount of really smart people on SI (and I'm sure you are quite sharp) actually listen to what these analysts say without doing your own dd. Face it, these guys are no different from you and me. I think you've lost site of the author's entire premise. The MASSIVE build out which can be found in TRAILING earnings, is LARGELY a result of capital markets which were more silly and generous than ever before No, to the contrary these expenses were perhaps slowed during the past 4 quarters due to Y2K lockdowns. IXC, CLEC's, ILEC's, ISP's, ASP's, MSO's, etc. have to build out like there there's no tomorrow because.. well.... if they don't there will be no tomorrow. Right now it's all about service innovation and if you don't deliver it your competitor will. These carriers have no alternative but to spend and pass that cost onto users. Now, I will agree that there may be an impact on enterprise business to which Cisco is exposed however the same basic premise holds. Futhermore if you are old enough you'll recall the mid-80's when spending was up in communications as a method to improve productivity and cut costs - the fastest way to bottom line improvement. Supply chain's are streamline and costs are cut through the use of B2B companies and associated infrastructure. This all said if the Fed rasies rates another 200 basis points I'll be wrong.. but then it won't matter... if you know what I mean. It'll all be moot. OG