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Whither Cisco -- What the Internet's biggest, baddest company is up to next

Jesse Berst AnchorDesk

Published: 01 Dec 1999 16:39 GMT

Cisco unveils its plans for the wireless market today, promising alternative Internet access into hard-to-reach areas not served by high-speed cable or DSL service. This is the same networking company that just last month passed Intel to become Silicon Valley's most valuable company -- with a market capitalization approaching $300 billion. As others have noted, this marks a changing of the guard for the tech industry. Before, we watched Microsoft and Intel. Now we'll watch America Online and Cisco. Many won't recognize Cisco. It's not yet a household name (unless you're a tech investor, in which case it's probably your favorite name, since its stock has quadrupled in two years). But if you want to know where the industry is headed, you need to know what Cisco is up to next. And I can sum up Cisco's direction in two words: up and down. Before I explain, let me quickly bring you up to speed on Cisco. Founded in 1984, today it is the biggest supplier of plumbing for the Web. For instance, 80% of the Internet's routers come from Cisco. It has been the 'safe' purchase. It did $12.2 billion for the fiscal year ended July 31. Business Week reports the company will grow another 37% this year, to $16.6 billion. That growth will come from several fronts: Cisco is heading up: It has set its sights on being a phone company supplier in competition with Nortel and Lucent. It's easy to understand why; that market is at least 10 times larger then the Internet space. In August, Cisco bought Cerent for a staggering $7 billion so it could compete in the growing market for optical networks. Cisco is heading down: It's making a big push right now to become a provider to small and medium businesses. Lining up distributors and adding consultants. And trying to build its brand name through advertisements. It is also targeting the business market with its new fixed wireless service designed to connect hard-to-reach locales to the Internet via a wireless 'microwave' technology. It is even giving away the core technology -- which uses reflected signals, known as multipath -- as a means of breaking into the market. But there's more to Cisco's master plan. It wants to go further down market...