Ruminations on Russia

Om Malik here comments on Light Reading's piece on Cisco and what happens next.

When we first invested in jNETx during the depth of the telecom fall out from the Internet bubble it was clear that IT and telecommunications were rapidly encroaching in to each others space. At the end user level Skype demonstrates that perfectly. The question we tried to understand in 2002 was what happened when IBM and Ericsson started competing directly in the same space. Whilst computing and telecoms remained in separate spheres co-operation was far more rampant than most of us understood. From different ends of the spectrum both Cisco and Sun were commonly selling hardware which reappeared with someone else's logo attached. How long can this go on for?

I am led to believe that IBM sees the telecom (sic) network as a huge value proposition. Not just for its blade servers but through leveraging IBMGS with their enterprise, always on understanding. There is a bit of a learning curve as SS7 bumps in to SIP but they should have the resources to see it through.

Our concern was what happens when the NEBS guys started to take on the TEM's. We just sort of assumed that Cisco would be OK and never really researched/thought that much about what happened when they went head-to-head. Our analysis was somewhat complicated by the fundamental changes that were being forced through the TEM industry at the time. Ericsson looked like a major competitor at the time. Indeed a consultant told one of our advisory board that Ericsson would kick sand in jNETx face. Ericsson subsequently sold the relevant R&D divisions and sharply moved in to network services. Which only goes to prove that consultants know only what there last job taught them and aren't worth the money they get paid. So what gives with Cisco.

As the Light Reading piece points out it is the convergence (collision) of telco networks and IT networks that is causing the shake up. There are big numbers involved but increasingly few very large companies that have the ability to understand it all. Cisco sits at one node of that understanding, the pure NEB guys at another and the pure TEM guys at another. Very few get to cover all the nodes.

I tried tapping the Russian diaspora in San Jose. Seems as if two opposing camps are fighting for supremacy; the for and against IBM camps. If there is closer integration then that will mitigate against Cisco moving in to middleware. If the go it alone crew wins out then expect another Cisco buying spree.

I'll throw it out because it should be said, albeit that I cannot see it happening. If IBM really wants to dominate NGNs why not just acquire Cisco? As I said it won't happen but it should not be dismissed.