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Technology Stocks : Nortel Networks (NT) -- Ignore unavailable to you. Want to Upgrade?

To: telecomguy who wrote (5882)	5/20/2000 4:43:00 PM
From: The Phoenix	Read Replies (1) \| Respond to of 14638

Telecomguy, Just to set the record straight. they are literally betting the company to get into the optics and wireless in the Carrier space Interesting comment but while I do believe Cisco's growth is a function of their ability to penetrate the SP market I think "betting the company on it" is a bit strong. Let's look at your last point first. Cisco would be better off if they..."redeployed that money in the enterprise space so that Junipers of the world never had a chance", First nearly 100% of JNPR's business is in the carrier market - not the enterprise... so this is an incorrect statement. Furthermore Cisco's share of the enterprise market is growing. COMS left, IBM left, LU is spinning off the business, and Nortel is practically giving away product to keep a presence. Cisco's enterprise business is quite healthy and is still growing at faster than the market rate. Cisco..." spent $20 billion trying to crack the Carrier market " First Cisco hasn't spent $20B.. unless I missed something large. Please add to my list. Cerent - $6.7B Monterrey- $800M Qeyton - $800M Pirelli - $2B (dependent on a lot of factors could be less) The total so far is about $10B These investments are already paying off according to what I heard on the last conference call. What I heard was Cisco in generating $1B/year in the optical market. This in less than two years.. that's not slow penetration in my book. Furthermore, according to the call Cisco is growing their SP business at 80%-100%/year.... again.. faster than the market rate. And between this and the enterprise business Cisco is generating in excess of $500M in cash EACH MONTH! So, the question now is would that $10B be better suited/invested in the enterprise market where they already are succeeding wildly or targeted at penetrating the SP market which will demonstrate huge growth going forward and is a new untapped market for Cisco. What would you do if it was your money - invest where you are already successful or invest where there are new opportunities? Seems to me it's easier to go from 0% to 10% than it is to go from 80% to 90% market share....don't you? And all from a new market! Further diversification of the company. Seems like the exact right thing to do. This is a problem? I think Cisco's tactics are pretty solid. However, I can also understand that the incumbents in the carrier space don't want an new formidable competitor to deal with - especially when NT seems to be taking LU to the mat. Cisco may not be a big name in the SP space but the incumbents are concerned... as is echoed by your post. Sure, NT would much rather see Cisco invest to build their enterprise presence... but that makes no sense. Think about it. They are currently uncontested. JNPR is not a threat there.. heck EXTR and FDRY are more of a threat and their still mice nuts. Just setting the record straight. OG