By Bret Swanson, a technology analyst at the Gilder Technology Report. It wasn't so long ago that Cisco Systems was the world's largest company and the envy of all the technology industry. To his credit, Cisco head John Chambers saw things coming and was the first chief executive to smartly call on the Federal Reserve to cut interest rates and for Congress to cut tax rates. But unfortunately for Cisco, Washington getting its act together won't be enough to put the networking company on the rebound. That's because Mr. Chambers's real problems aren't economic.
Cisco is increasingly in the wrong business.
Heroic Processing The company that defined the 1990s and made the Internet possible is being squeezed from above by fiber optics and from below by microchips. It has a core competency in neither. Cisco's great advance was its vision for the first post-telephone network. It developed the architecture and crucial software standards that made the Internet work. Then it cobbled together the chips and wires and code into high-margin boxes that few others knew how to make.