Should Cisco Buy Level3?

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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Should Cisco Buy Level3?

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Is this article today on ARS, the writer, Cameron Kaine, is asking for Cisco CEO Chambers to step down. In the same article, the writer thinks that Cisco should spend its $45B in cash to buy Level3.

Kind of ridiculous for a number of reasons.

One: now you compete against your customers. A move like this would give Juniper and others the perfect opportunity to take market share.

Two: Cisco owned a network provider before. Yes, by default Cisco became a stakeholder of Cogent after a bankruptcy in June 2003. It didn't last long. 

Selling gear is different than selling network services. Cisco used to sell professional services through its SmartTech warranty but even that has declined. Even on selling gear, Cisco has issues - need I mention that consumer products like Scientific Atlanta set-top boxes, Flip video camera and Linksys networking products were all consumer products with a brand and a market lead that have since declined.

Also, Level3 isn't what I would call a Cisco powered network. (Hardly any of them are.) Forcing it to become one would weaken a company that has worked extremely hard to become a number 1 vendor to cable, content, VoIP and hosting companies.

Cisco doesn't make the best gear for all WAN and LAN needs. For VoIP, due to the excessive I/O drain, Foundry, Juniper and Edgewater make better boxes. Cisco makes a great MPLS device, but ADTRAN offers a cheaper and more efficient CPE for T1 and other business customer demarcation needs. The mix of hardware and network wouldn't work all that well.

Level3 is a convoluted financial animal. Did you know that it owns a software business and I think still owns a mine?

Best advice for Cisco: "Don't skate where the puck is. Skate to where the puck will be." Also, get your house in order and stick to your knitting.

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