Cisco's Big Dreams: A Clash Of Titans?
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Cisco's Big Push into New Markets BusinessWeek In recent weeks, Cisco has cut deals with customers looking to use its technology in more expansive ways than ever before— Major League Baseball teams that want fully wired stadiums, the city of Miami as it develops a smart power grid....... While many companies retrench, the tech giant has strong profits and $33 billion in cash in its coffers. ...... the dominant provider of the networking gear that runs the Internet. ..... Just as the tech world revolved around IBM (IBM)'s mainframe computers in the 1970s and Microsoft (MSFT)-powered personal computers in the 1980s and '90s, Chambers believes Cisco has an opportunity now to make its digital networks the platform on which new innovations are built. ...... Cisco's stock, now $18 a share, is at the same level it hit in 1998. ...... hastening efforts to move beyond the core business of selling switches and routers. ...... digital billboards to stereos and video surveillance systems ...... "We're moving into new [areas] with a speed nobody has ever attempted" ........ danger of losing focus ...... concern is that Cisco will alienate key partners that as a group deliver more than 80% of the company's sales ........ HP and Cisco already have begun to spar publicly. ...... "[Chambers] is known for trying to find a win-win," says one tech CEO. "This isn't a win-win. It's a declaration of war." ....... Cisco could lose half of the $4 billion in gear sold each year by IBM and HP ....... P&G plans to install more than 75 of Cisco's high-end TelePresence videoconferencing systems in 55 countries by the end of the year to lower travel costs and hold more global consumer focus groups. ....... "No other company touches the content, the carrier, and the consumer—and the best part is they all drive each other," says Padmasree Warrior, Cisco's chief technology officer.
When it comes to the internet, Cisco has been for hardware what Oracle has been for software. These two are network giants. As the giants of the tech industry seek to expand, it is but inevitable that they will run into each other. C for capitalism, c for competition. Cisco just so happens to be in great financial health. John Chambers and Larry Ellison are very different personality types. Ellison is the brash cowboy. Chambers has the reputation of the smooth, warm, fuzzy guy, but never underestimate a guy who has done a marvelous job of keeping a relentless focus on the fundamentals of his business, innovation being one of them. You can't be in love with innovation and not seek out new markets to grow your company. To the world it might look dramatic what Chambers is attempting, but to his mind he is merely putting one step in front of the other. The internet giant deserves to take yet another stride.
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