Cisco finds route to home market

Cisco Systems bought network gear maker Linksys because it will give it entry to the multibillion-dollar small and home office market, and let it service organisations that have staff working from home.

Cisco Systems bought network gear maker Linksys earlier this year for two reasons.

It will allow Cisco entry to the multibillion-dollar soho (small and home office) market, one it’s not traditionally been involved in, while servicing organisations that have staff working from home was another motivation.

“Having broadband connections to the home makes teleworking effective,” says Cisco Asia-Pacific service provider vice-president Andrew Murray. “I work from home sometimes myself.”

Murray, a New Zealander who set up Cisco’s operation here in 1993 and was back in the country recently, says the main barriers to more widespread adoption of home broadband here aren’t technological.

“I can only imagine it’s to do with competition and deregulation.”

He cites South Korea as the most broadband-penetrated nation on Earth and says even in Hong Kong a service provider is delivering 10Mbit/s ethernet to residential customers.

Murray established Cisco’s New Zealand operation the same year Cisco acquired switch maker Crescendo, its first acquisition and the beginning of a period of acquistion-fuelled growth that saw it buy more than 60 other companies.

He says despite being at the bottom of the world, New Zealand has had access to newly acquired and developed technology as fast as anywhere else in the world and has lead the way in some areas, such as with the deployment of IP telephony technology at the Ministry of Social Policy in 2000, after Murray had shifted to Australia.

“It took a huge effort to get Cisco to support [installing] such a massive network outside the US. We were pushing the boundaries of the technology as it was at the time.”

Losing out to rival Foundry Networks for networking gear supply contracts at PricewaterhouseCoopers and law firm Simpson Grierson doesn’t faze him.

“Foundry has a very small market share in New Zealand and the rest of the world — we’d get stagnant if we didn’t have competition.”

IP telephony and storage switching represent two relatively new areas for Cisco, but Murray says that doesn’t mean its traditional routing and switching business is becoming saturated.

“In some parts of the world routing and switching is slowing, in others it’s growing.”

His forecast for the next 10 years is that, technology-wise, things will get faster and cheaper.

“Not so long ago, multigigabit routers were dreamland; now everyone has one.”

Internationally, Cisco has been in the IT headlines recently for suing Chinese telco gear maker Huawei, alleging patent infringements and copying of source code for Cisco operating software.

It has also been hit by several bugs in its software, including a password vulnerability in its core router operating system. Patches and workarounds have been issued.

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Tags cisco

More about Andrew Corporation (Australia)CiscoCiscoFoundry NetworksHuaweiLinksysPricewaterhouseCoopersSimpson Grierson

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