We love Cisco; but not as much as Cisco loves Cisco. And certainly not as much as Cisco loves turning other companies into new little bits of Cisco. 

If you poll enterprise users about which company leads the way in a variety of hard-core ICT disciplines – IP, the Internet, etc – I can guarantee you will get one overwhelming answer. Cisco.

So when Cisco announces above-expectation results, we all swoon. Happy days are here again.

So much for the nonsense. It can be argued that Cisco helped to precipitate the collapse of the technology sector when almost single-handedly inventing the term 'excess inventory'. In other words, it produced far more of its boxes than anyone was minded to buy.

It also subscribed in subsequent quarters to the 'lack of visibility' concept, which loosely translated was taken to mean that it had not the foggiest idea what was going to happen next. For a company whose name derives from San Francisco, the foggy bit might be appropriate.

Cisco is also a madly evangelical company, not in any formal religious sense but in the respect that its officers and employees are in some way 'chosen'. For some pretty obvious reasons, we won't be going any further into that right here, but some nifty search engine action will take you there.

Stop the world
Cisco Tuesday announced some impressive results. I think.

“Order growth was very strong with product book to bill comfortably above one. The key takeaway here is that when you see our ending backlog for fiscal 2006 as published in our Form 10-K in September, we will have increased our Cisco standalone product backlog approximately $700M over the ending backlog of fiscal 2005. This increase was due almost entirely to the strong order growth in Q3 and Q4”, said president and CEO, John Chambers.

My inventory sensors are twitching anew.

But there is more from the big man: “From a Cisco standalone geographic perspective, momentum was strong from an orders perspective and balance was very good across the five theaters during Q4. Four of the five geographic theaters experienced stronger annual product order growth when compared to a strong Q4 of last fiscal year, Europe being the exception. In Europe we did see some improvement versus earlier in the fiscal year, with order growth slightly improving to the high single digits.”

The markets went wild at this news. Cisco stock opened up nearly 10% this morning, which cannot quite obscure the fact that it's off about 25% on its YTD high. All is relative. Market-watchers hope that Cisco will drag an otherwise sluggish tech sector upwards. It might do, having spent much of this year dragging tech stocks in the opposite direction.

Cynicism aside, Cisco is back: an IP-based colossus once more standing astride the Golden Gate. “From a Cisco standalone product perspective the balance was extremely good across routing, switching, and advanced technologies”, said Chambers, as if to prove the point.

Loaves, fishes
Part of the Cisco myth lies in its ability to take ordinary tasks (and the often ordinary people behind them) and take them to a higher, IP-based place. In healthcare, for instance.

"It sounded like a good idea for addressing a problem that has been daunting us for many years, so I was interested in participating in the trial", said Nancy Steiger, chief executive officer for the San Mateo Medical Center. "But I underestimated the impact of the technology. In my career this is one of the single best steps we have taken to improving the quality of our patient services."

Cisco adds: “a small group of California hospitals is tapping Internet technologies to address one of the most daunting challenges faced by the healthcare industry in the United States.”

Less daunting (now designated as a verb, it seems), maybe, is the challenge laid out in the 'Executive Thought Leadership' strand of Cisco's publicity. Robert Lloyd, senior VP of US and Canada Operations, cites an example where “a home-improvement company broadcasts “how-to” demonstrations of building projects, which can be recorded on set-top boxes. Using the education he receives, a customer configures a porch or deck virtually on the home store’s Website. The Website generates a parts list and recommends equipment needed to complete the job. The customer gathers all the components in one trip, rather than repeatedly visiting a local retailer each time he discovers he needs another item.” Please note, Robert, in Europe 'she' might do it (and 'she' certainly would in my house or else nobody would).

You can't knock Cisco for this: they are doing their best. Spreading the love and taking IP networks into new and undiscovered corners of the universe.

Wine, water
But what's this? It's time to update the infamous Cisco 'If you can't beat them, buy them' list. They have not let us down.

Newcomers to this feature will need to click here to get the running total up to the end of 2004. But Cisco has not been sluggish in the 30 months since then!

Here we go in reverse chronological order: Meetinghouse Data Communications (July 2006); Metreos Corporation (June 2006); Audium Corporation (June 2006); SyPixx Networks, Inc. (March 2006); Intellishield Alert Manager (November 2005); Scientific-Atlanta, Inc. (November 2005); Nemo Systems (September 2005); Sheer Networks, Inc. (July 2005); KiSS Technology A/S (June 2005); M.I. Secure Corporation (June 2005); FineGround Networks, Inc. (May 2005); Vihana, Inc. (May 2005); Sipura Technology, Inc. (April 2005); Topspin Communications, Inc. (April 2005); Airespace, Inc. (January 2005).

If you have not clicked on the link above for the dozen or so years to end-2004, here's a refresher; in chronological order, the 1993-2004 acquisitions by the kindly folk at Cisco included: Crescendo, Newport Systems Solutions, Kalpana, Lightstream, Combinet, Internet Junction, Grand Junction, Network Translation, TGV Software, Stratacom, MICA Technologies, Nashoba Networks (remember them?), Granite Systems, Netsys Technologies, Metaplex, Telestone, Skystone Systems, Global Internet Software Group, Ardent, Dagaz, Lightspeed International, Wheelgroup Corp, Netspeed, Precept Software, CLASS Data Systems, Summa Four, American Internet Corp, Clarity Wireless Corp, Selsius Systems, Pipelinks, Sentient Networks, Fibex Systems, Geotel Communications, Amteva Technologies, TransMedia Communications, Stratum One, Calista, MaxComm Technologies, Cerent, Monterey Networks, CoCom AS, WebLine Communications, Tasmania Network Systems, Aironet Wireless Comunications, V-Bits, Worldwide Data Systems, Internet Engineering Group, Pirelli Optical Systems, Altiga Networks, Compatible Systems, Growth Networks, Atlantech Technologies, InfoGear Technology, JetCell, SightPath, Pentacom, Seagull Semiconductor, Arrowpoint Communications, Qeyton Systems, HyNex, Netiverse, Komodo Technology, NuSpeed Internet Systems, IP Mobile, PixStream, Vovida Networks, IPCell Technologies, CAIDS Software Solutions, Active Voice, Radiata, Exio, AuroraNetics, Allegro Systems, Hammerhead Networks, Navarro Networks, AYR Network, Andiamo Systems, Psionic Software, Okena, SignalWorks, Linksys Group, Latitude Communications, Twingo Systems, Riverhead Networks, Procket Network, Actona Technologies, Parc Technologies, P-Cube, NetSolve, dynamicsoft, Perfigo, Jahi Network, BCN Systems.

Fishers of men
When you think about it, Cisco is only 'spreading the love' with this incessant trail of acquisitions. Think of all the millionaires created by this largesse. Then stare at Cisco's market cap and ask yourself where the value went. Or ask its shareholders how many of them are millionaires.

And remember the keywords: 'inventory' and 'visibility'.
Jim Chalmers