On the other hand, a greenfield carrier, CLEC or other small competitor is not encumbered by an existing circuit-switched infrastructure. They can build packet networks from scratch. Moving from circuit switches to packet-based technology seems inevitable, but the migration isn't going to happen overnight. We understand incumbent carriers have large investments in circuit-switched networks, and we do not recommend a total replacement strategy. Cisco offers these customers a migration path to New World packet-based networks that allows them to remain competitive by offering enhanced services in a mixed network environment.
Acquisitions are a fundamental part of Cisco's overall strategy.
The acquisitions we make complement our existing internal development and allow us to move quickly in a competitive environment. This strategy is often driven by our customers, and allows us to maximize our internal investments in the products our customers are investing in. At the same time, we acquire customer, market and technology intimacy in new areas every time we acquire a company. Take optical technology. Some of our recent acquisitions may seem pricey, but we are not just buying companies, we are acquiring technologies and the engineers that developed these technologies.