To: Paul Reuben who wrote (43255 ) 11/9/2000 5:27:08 PM From: Mehrdad Arya Read Replies (1) | Respond to Personal Capital: What's next for Cisco?Things are getting dicey at Cisco. But the inventory problem is only a small symptom, not a cause. The company is struggling through an enormous transition -- the most important transition in its career. Juniper Networks (Nasdaq: JNPR) is taking market share away from Cisco in the core IP router market, the very foundation of Cisco's power in the Internet infrastructure. Second, Cisco is now an enormous company, but for some reason investors still expect it to behave like a small-growth company. Maintaining annual growth in the 30 percent to 40 percent range becomes nearly impossible when your annual revenues are close to $40 billion. Third, the enterprise networking growth spurt that fueled Cisco's rise in the last decade is essentially over, and the company must now find an entirely new market in which to grow. It has already selected that market: the telecom carrier market. Juniper continues to be the only router company that can deliver a product that processes IP at OC-192 (10 Gbps) line speeds. Cisco has simply lost the race in that market -- and catching up is going to be very difficult.
