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To: Morgan Drake who wrote (1591)	4/30/1999 3:39:00 AM
From: LindyBill	Read Replies (1) \| Respond to of 54805

he has 65% margins in a technologically rapidly evolving field,with competition nipping at his heels, well...you know the rest of the story. Cisco has had these margins for years, Morgan, and no one has been able to touch them. That's what drives the "Dilberts" on this board nuts. These engineers keep posting articles about the new routers, hubs and switches that some "gee-wiz" company has just come out with, and can't figure out, a year later, why Cisco has still got all the business, at the same high margins. They are sure that the business will "commoditize". "Its the software, stupid", is what we tell them; but they just don't understand or believe it.

To: Morgan Drake who wrote (1591)	4/30/1999 10:08:00 AM
From: DownSouth	Read Replies (2) \| Respond to of 54805

if I see a guy who publishes the fact that he has 65% margins in a technologically rapidly evolving field, with competition nipping at his heels, well...you know the rest of the story. Morgan, you are missing an important point. They have been making 65% margins for many years. They use those profits to maintain their rulemaking status. This is not like selling commodities. The barriers to entry are very high, and CSCO is successful at maintaining that height by changing the rules. We don't know "the rest of the story". What we know is that CSCO is not sitting still. 13 acquisitions this year. 12 the year before, as I recall.