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The Cisco Guessing Game

There's nothing like silence to get tongues wagging. The refusal of Cisco Systems Inc. (Nasdaq: CSCO) to itemize storage in its latest earnings report has morphed into a major guessing game (see Cisco Call Puts SANs in Storage). Analysts have taken sides, and rival vendors are using Cisco's silence to buttress their own bad news.

This week, for instance, Greg Reyes of Brocade Communications Systems Inc. (Nasdaq: BRCD)
and John Kelley of McData Corp. (Nasdaq: MCDTA) hinted that Cisco's storage reticence means it's not cutting the SAN switch mustard.

We can’t comment on the competitor who didn’t make an announcement,” said Kelley, who then commented anyway. “We have some idea about it, and our guess is that if they knocked the cover off the ball, we’d have heard about it. But we can’t make a comment.”

Reyes said, “Well, since Cisco to the best of my knowledge didn't publicly state how they did, it is hard for me to respond. I can give you my anecdotal opinion, which is Cisco has done a lot to validate the space, and I think that they have created an opportunity for us to go in and retell our story to many end users. And I can tell you sitting here today that we are very comfortable with our ability to compete and win against Cisco.”

In Kelley's view, even if Cisco's not outselling its rivals, it's making its presence felt in other ways – by lengthening sales cycles, for example.

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