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May 7, 2000
When you think of the biggest companies in the world Microsoft and General Electric quickly come to mind. But surprisingly, a company equally as powerful, Cisco Systems, rarely comes up. How can that be for a company that recently surpassed Microsoft, albeit briefly, as the most valuable company in the world? While companies like Microsoft and Intel Corporation became household names through flashy advertising campaigns, Cisco quietly built a $470 billion empire in the highly competitive world of technology. The company controls about 50% of the $21 billion business/network market.
Cisco Systems, which trades on the Nasdaq under the symbol CSCO, provides networking solutions, both hardware and software, that connect computer networks, allowing people to access or transfer bits of information. Cisco feeds the Internet's "Need for Speed"…and feed it; it does -- with sales increasing 50% to $8 billion last quarter. Its record-breaking growth has made Cisco the fastest company in history to reach $100 billion, $200 billion and most recently $300 billion in market capitalization. But the question is: Has the Cisco Kid grown old? Can it maintain its competitive edge against these high-flying newbies like Juniper Networks and Alteon Websystems Inc? John Chambers, the CEO of Cisco, certainly thinks so and he plans to put his money…and his stock where his mouth is by acquiring the technology necessary to stay ahead of the pack. Cisco's attitude is: If we can't make it, what the heck, we'll just buy it. Since the beginning of the year, Cisco's been on a mega-buying spree; acquiring its tenth company last Friday (May 5, 2000) with plans to acquire ten to fifteen more companies this year. It has built an incredible reputation for acquiring companies at the right time.
Cisco is looking to "Rule the Internet Roost" by becoming the TOTAL solutions company. Its strategic initiative entails three main areas: first, the MultiService Network which is a single platform for voice, video and data; second, Application Aware Network which is meant to build intelligence into the network infrastructure to respond quickly to problems; third, provide end-to-end service for enterprise security.
So maybe after reading this article you still don't really understand what Cisco does (what the heck is a MultiService Network??). One thing is crystal clear -- Cisco is growing. In the ten years since it went public, the stock has split nine times and risen about 8,000%. If you bought one share of Cisco in 1990, it would be worth approximately $14,000 today. So you don't have to be a rocket scientist to know that the Cisco Kid has grown up and is fighting to stay on top.
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