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

To: RetiredNow who wrote (51751)	4/18/2001 9:41:22 AM
From: Victor Lazlo	Respond to of 77397

<< This is completely false. >> No, actually it's not, mindmeld. Studies show that internet use by individuals is contracting, and people are using the same sites and functions they like repetitively, as opposed to doing a lot of surfing as was the case in the past. And simple text email remains by far the #1 reason people use the internet. And many, not all, companies are backing away until more return on invest can be justified. Until the next phase of it is in swing, the <<I work in the IT industry and many companies are throwing all their IT budgets behind these types of efforts. This is where managers can easily justify cost savings and incremental revenues. The more tightly you tie your companies systems with those of your customers, partners and suppliers, the higher the switching costs are for your customers. It's a no brainer. >> Many, not all. And many others are cancelling or not placing orders for web-related software and systems and switches and servers, as is painfully obvious these days. I never did believe much of the web predictions baloney that co's like Forrester publish, and it turns out most of it was grossly over-optimistic. I have no doubt that once we get through this inflection point, the web bbbuild-out will pick up steam again, but it coudl be a while before those purchase orders start to flow again. << The long haul networks may be oversupplied right now, but the demand in metro outstrips supply.>> Too much metro being built already; there will be a flush out as the weak co's continue to go belly up and the survivors buy out their pipes at big discounts. << addition, the oversupply in the long haul sector is only temporary. In the second half of this year, the major carriers are going to step up spending to start lighting up unused fiber. >> Great! And exactly where will the major carriers get the money?? They're broke. But hey call John Roth at Nortel and tell him that! He'll be glad to hear it anyway! <<. The Internet is still growing at tremendous rates. In fact, the growth spurt we had over the last 5 years is peanuts compared to what will happen when full screen video migrates to the web and most homes have broadband. The bandwidth consumption rate is about to skyrocket. >> yup, sure, everyone wants pornography in their home 24 / 7, and they also want to pay $50/mo just for the hookup, and then go out and upgrade their PCs and screens yet again! A lot of unanswered Q's remain, like, "in a stagnant economy, who's going to pay for all this wonderful stuff? " Victor

To: RetiredNow who wrote (51751)	4/18/2001 10:22:49 AM
From: Stock Farmer	Read Replies (1) \| Respond to of 77397

Hi mindmeld - the "productivity myth". I've seen a lot of these "productivity" initiatives by IT organizations. Actually did a fair amount of that chart-jockeying for budget slice myself. Quite successfully. The one that always works is the argument that if you spend X$ here you can reduce Y$ over there, where X is smaller than Y by at least whatever hurdle rate is in vogue at the time. Or the "if you don't spend" converse when the budgetary pocket you are planning to pick is tight. It works brilliantly if "here" and "there" are the same place, only separated in time across fiscal years... lol.. organizations have flawed memories. Now you see it, now you don't. Even more brilliant if you can move on and get promoted just as the "savings" start to kick in, but before the full effect can be counted. Look, nothing up my sleeves... hold my coat please? The final act is in the creative repositioning of "old" costs versus "new" costs and show how your past productivity effort has obliterated all of these "old" costs, allowing the company to spend even more "new" costs. One side of one balance sheet shown here, the other side of another shown there. Never reconciled. David Copperfield of creative accounting. All but very few senior executives can detect the subtle flaw in this seductive logic. Because it's all a shell game. Chasing the pea in the pod. You don't have to believe me. You can measure it directly. Productivity is "Output" divided by "Input". Look at the mighty Cisco. The most internet savvy of the bunch. If anyone should be the asymptote of productivity gains through interneting the business it should be Cisco. Oh, how strange, actual "Output" over "Input" (Gross Margin) has steadily declined!!! All those unharvested productivity initiatives happening under the guise of "OPEX" are growing the business yes. But so far they have not increased productivity one smidgen. And you will be hard pressed to go back and find ANY budget submission that claimed negative productivity as an anticipated outcome. So the sum of the parts is indeed greater than the whole. Are you sure that pea is under there? Take it farther. If the greatest internet enabled to the max company on the planet is getting negative productivity growth, what's happening at those that are only mediocre? Possibly getting bitten by the sharp teeth of reality right about now. No shame in proclaiming the productivity myth. After all, you're one of those IT professionals whose job depends on it being perceived as true. You and me both. So it is a good thing that you pound the table about its benefits. But... while pounding on the table to preserve your ability to sacrifice Dollar Cost Averaged funds to the money gods of the market, you might want to hedge your bets. That is, invest in companies that create something other than IT "productivity". John.

To: RetiredNow who wrote (51751)	4/18/2001 12:15:56 PM
From: MHA	Respond to of 77397

mindmeld: fully agree with what you posted. I think Cisco's main problem is getting rid of the fat. If they can straighten up the service provider bussiness unit than they will be back on track...