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

To: Tulvio Durand who wrote (18459)	10/28/1998 9:18:00 AM
From: Mr.Fun	Read Replies (2) \| Respond to of 77398

UUNet has been testing a Juniper M40 for about 7 months and I hear they are very happy with it. Qwest has had one for 4 months and is also happy. The Juniper design team is essentially the same team that designed the Cisco 7500 series router which is the workhorse of the internet and the early spec work on the 12000. Using Ascend as comparison is probably too simplistic. The GRF was a terrific piece of hardware but a terrible piece of software. Ascend bought NetStar and naively rushed the product to market. Most of the new router companies (including Ascend, hard at work on its own terabit router the SRS) understand this and are taking their time to bulletproof the software. Companies expected to deliver viable high-end routers by mid 1999: Juniper, Lucent, Ascend, Nortel/Bay, Aptis, Nexabit and others. Two or three of these are likely to work, and I'd bet Juniper will be one of them. That said, Cisco will still sell more internet routers than all these vendors combined. However, Cisco's current share of the market is 87% and its gross margins are nearly 80%. Even if Cisco preserves a dominant 70% share and can hold its margins at 70% it is a net loss for Cisco. Also note that because of the architecture of the internet - independent distributed nodes - if a router works properly, it can be deployed in a network without substantial switching costs. The big if is if it works properly. My discussions with major ISPs suggest that they would welcome any router that could increase the bandwidth and packet processing power of their network.