Cisco Kids
Cisco CEO and Cheerleader John Chambers has a gift for understatement. In a recent mea culpa of insight, Chambers declared that Cisco had “disappointed investors and confused employees.” This is akin to saying nuclear bombs annoyed some Japanese during World War II. As evidenced by the chart on stage right (click to enlarge), Juniper Networks has been soaring, the tech heavy NASDAQ has been rising, and even the leadership spasmodic Hewlett Packard has been doing better than Cisco in terms of share price. And with little wonder. Cisco, the once (and maybe future) king of network plumbing did what many large companies do, namely make the erroneous decision to diversify. Diversification is not inherently incorrect, but it makes sense mainly for consumer products, markets where brand consciousness requires different brands for different products or price points, or where the primary market is completely tapped. Cisco did not face a saturated … Continue reading →