Business Blog: Hoover’s Business Insight Zone

Housekeeping note: I’ve been remiss about posting our Company of the Day entries here. Since the Company of the Day page changes every 24 hours, it would be helpful to have a handy archive of these short articles for future reference. This blog seems to fill that archival bill, plus sometimes I have further thoughts about a given company that wouldn’t fit in the original article. As my occasional dissertation-length posts attest, I can use some elbow room for pontificating bloviating offering additional commentary.

So, today’s entry for Cisco Systems follows.

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Cisco Systems has been one of Silicon Valley’s biggest players for more than a decade. The company’s bread and butter remains the routing and switching hardware upon which computer networks are built, and upon which Cisco built a dominant market position starting in the mid-1990s. Now, though, the company has branched out from the center of the network toward its periphery, and if all goes according to plan, Cisco will become a consumer brand on par with Microsoft or Sony.

CEO John Chambers, who has led Cisco for a dozen years, says that he sees this transition as logical, since the company has already succeded in smaller customers. It started out by selling some of the biggest hardware to the biggest enterprises, then began courting small and medium-sized businesses. Aided by acquisitions like Linksys (home networking equipment, 2003) and Scientific-Atlanta (television set-top boxes, 2006), Cisco has already entered consumers’ homes; over the next year, consumers can expect the phase-out of these subsidiaries’ names in favor of the Cisco brand.

If Chambers’ logic holds, putting the Cisco label on everything will be far more than a branding ploy: it will accurately reflect the company’s emphasis on the convergence of data, voice, and television networking-a market transition that Chambers sees as inevitable. In this vision of “the connected life,” the boundaries between work, home, entertainment, communication, and collaboration will blur, aided at every turn by Cisco’s wares. But achieving this vision means not only competing with traditional rivals in networking like Nortel, Avaya, and Alcatel-Lucent, but also negotiating the tricky dance of cooperation and competition with companies like Microsoft and Apple. If Cisco has its way, it will be just as influential on the converged networks to come as it has been on the Internet so far.

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