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An Interview With John Chambers


Network Computing: How do you see the enterprise networking industry evolving? Juniper Networks, in particular, has been beefing up its product portfolio with acquisitions, buying Peribit in the WAN optimization segment and Redline, a maker of network appliances that improve Web application performance. Those two acquisitions come a year after Juniper bought security specialist NetScreen. Do you see the enterprise networking industry shaping up as something of a "duopoly" between Cisco and Juniper?

Chambers: I have a lot of respect for Juniper. I think it's a good company. It's one of 15 companies we compete against. It's primarily a router competitor and a little bit of security. If it's a duopoly, Juniper is going to have a real problem. Our toughest competition is going to come from Asia. That's where the No. 2 or the No. 1 player will be, and we'll do everything possible to make sure it's the No. 2.

If you're talking about an architectural player, you have to be across the home, the enterprise, the service provider. You have to be in routing, switching, storage area networking, IP telephony, wireless, etc. So if there's going to be another player that takes an architectural approach like Cisco, and it's wide open who that's going to be, it's most likely going to be Asian.

Network Computing: Is that competitor going to come out of the consumer electronics ranks, out of Japan or South Korea?

Chambers: The shocking thing is, nobody has followed our lead for 10 years. We've told the market where we're going. It's not like we've been doing this in stealth mode. We basically said we're going to play across all networks. We said we're going to play in routing and switching. We said Layers 1 through 7 would blur. But nobody followed us. We said to do that, you've got to be able to acquire and partner, and you've got to really fine-tune those because they're hard to do. Ninety percent of acquisitions fail. If you want to know if an acquisition works, ask three questions: How many of the top managers are still there, how many of the top engineers are still there, and did you gain market share after the acquisition? If the answer is a lot of the top managers and engineers are gone and I haven't gained much market share, then it has failed.

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