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

To: pass pass who wrote (12183)	2/7/1998 3:26:00 PM
From: Sowbug	Read Replies (1) \| Respond to of 77400

Pass pass, You and I question the comparison to Coke but reach different conclusions. The Coke product analogy is flawed because Coke doesn't have to worry about compatibility with bottles, straws, or fountains. Cisco does, and it benefits from the problem. Although networking hardware is supposed to be compatible regardless of brand, there are just enough quirks and variances in implementation of standard protocols that a single corporate network will pay attention to the brand it's buying, meaning it will bet on the favorite -- in this case, Cisco. So it's *not* a commodity business, and until we reach some level of utopia at which everyone respects international standards and nobody offers a reputedly better implementation of a particular protocol than its competition's product, networking hardware won't become a true commodity, and Cisco will remain the leader. Same with MSFT. You could have put together a perfectly good Mac-Unix-DOS-Windows LAN in 1991, letting everyone have their computer of choice, but no MIS would have recommended it, because it's harder than having one OS. So corporations bet on the favorite, Microsoft, ensuring its success. CSCO is to networking as MSFT is to operating systems, and at this point CSCO is as likely to remain at the top as MSFT was in the late 1980s (i.e., in my 20/20 hindsight, it's virtually certain). Coke has its secret taste that no other company can imitate. Is there product CSCO can make but others can't? There are many, many network companies growing 30% or higher but none has a price/sales of 10. This business is becoming a commodity buiz faster than you can imagine. Every company (CPQ,INTC,MSFT) is thinking about getting into this area, just like the early years of the PC industry.