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

To: Mr.Fun who wrote (18473)	10/28/1998 9:35:00 AM
From: jach	Read Replies (1) \| Respond to of 77398

<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.> IMO, it is not an "if" any more today. With IETF standard activities and the maturity of Routing protocols such as OSPF and BGP4 have paved the way for any vendor to be part of Internet. When something becomes commodity and the profit margin is very good, what can happen? very simple, small and large vendors are and will come in to share the profit. And, pretty soon, too many vendors with too many products chasing the buyers, and in no time, the router business becomes like a LAN switch mkt, that is 200$ fro an eight-port switch. We have clearly seen what intesne competition had done to the disk drive (IOM), and SEMI (ATML as an example). The price just dropped more than 75%, from 40$ to 10$. IMO, networking sector is now going through this competitive driven price-erosion mode. IMO, CSCO will really feel the price pressure when all ROuters work the same and the key competitiveness is the price and the speed. Too bad, with standardized chip sets from companies such as LU and MMC Networks, any company can design fast and furious routers in nine months.

To: Mr.Fun who wrote (18473)	10/28/1998 11:15:00 AM
From: Tulvio Durand	Respond to of 77398

Thanks for your in-depth response on Juniper's M40 and others' state-of-art routers that potentially can take a bite out of Cisco's high end router business. Unfortunately the comparison pits the challengers' state-of-art systems against mature Cisco equipment. Unaddressed are Cisco's technology enhancements for the 7500 and 1200 routers and new products coming out of Cisco's R&D pipeline that could mitigate the challengers' performance advantage. And then there's Cisco's end-to-end solution including support that is hard to match in this industry (especially by the upstarts) that carries a lot of weight in boardrooms where purchasing decisions are made. But your points are well taken -- a 10% bite out of Cisco's router market could really hurt Cisco's bottom line. Tulvio