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

To: Network Pukka who wrote (15162)	7/17/1998 9:24:00 PM
From: Frank Walker	Read Replies (1) \| Respond to of 77400

To clarify post 15158, I was wondering about how much an equipment customer might get tied to using Cisco's products. If it is hard for the customer to switch to another supplier, this is good for Cisco, since it means they will keep the customer for a long time, and they can keep prices at a high level. By comparision, here is the situation that existed in the IBM mainframe computer business in the 1960's onward, and probably still exists today to a lesser extent. A company that started using big IBM systems could require a large investment in customized software and computer people, that could not be easily moved to dissimilar computer systems like DEC or Sperry-Univac. So the customer became a captive of IBM because of the high "switching cost" - it was just too expensive to convert. Later on, manufacturers of IBM compatible mainframes like Amadahl came on the scene, but most companies kept using IBM because of their excellent support and wide array of products. According to the "Gorilla Game" book (http://www.gorillagame.com I think), a "gorilla" company has customers that have a high cost to switch to a competitor's products. Examples are IBM (in the past and maybe now) and now Microsoft, SAP, and probably Cisco. Since I have no experience with networking equipment, the ease and expense of a customer's switching from a Cisco product to an equivalent non-Cisco product is something I am trying to get a GENERAL idea about. regards, -ILikeGorillas (especially in the past few months with SAPHY, MSFT, CSCO up so much!)