Five Threats to Cisco's Empire

Before all you Cisco loyalists flame The VAR Guy, let’s make one thing clear: He believes Cisco’s momentum is accelerating. Heading into next week’s Interop conference in Las Vegas, Cisco appears unstoppable. But that’s usually when something completely unanticipated goes wrong. So, what — if anything — could give Cisco fits in the years ahead?

Here are five potential long-term threats to Cisco’s empire:

5. The Big Transition: Relax, folks. CEO John Chambers plans to remain with Cisco for a few more years. And CTO Charlie Giancarlo is positioned as his natural successor. The two executives hit it off publicly. But one look at Dell Inc.–where Michael had to ultimately push partner and former CEO Kevin Rollins out the door–shows how quickly a relationship can unravel when business goes bad.

4. Talent: Cisco hinted about its talent search during the company’s partner summit in April (see item 11 on this list). The company says it needs to help partners recruit and train more Cisco certified experts. That’s a tall challenge: In 2006, US undergraduate enrollment in computer science studies was half of what it was in 2000. The IT market is growing yet fewer students are mastering new technology. And many computer science graduates return to foreign countries to start their own businesses rather than join the likes of Cisco.

3. Microsoft and Google: Don’t blame The VAR Guy for hyping these rivals. Cisco CEO John Chambers has said that he thinks Cisco is on a collision course with both Microsoft and Google. Imagine if Microsoft bundled basic unified communications software–just enough to hook customers–with future versions of Windows Server. And what about Google? Hmmm. Google is getting into the desktop video conferencing market. Not exactly a match for Cisco’s TelePresence technology. But while Cisco’s video technology appeals to corporate suits, Google is going after the masses.

2. Open Source Hardware: When MIT researchers helped to build a wireless mesh network for some city residents in New England, the researchers used commodity hardware and open source software to piece together a solution. Now, open source network hardware companies like Vyatta are starting to pop up. Nobody is predicting that Global 2000 enterprises will swap out their switches and routers for an open source network architecture. But over the long haul, what if companies like Google and Yahoo–which customize open source applications for their own use–begin to experiment with open source network hardware? Hmmm.

1. Asterisk: Much in the way that Microsoft worries about Red Hat Linux and Ubuntu Linux on the server and desktop, respectively, Cisco has to worry about Asterisk in the voice-over-IP and unified communications markets. Asterisk is an open source VoIP platform that’s moving into network applications and small business servers. Noteworthy Asterisk backers, according to allaboutasterisk.com, include Digium, Fonality and Switchvox.