Is Cisco 'Too Big To Fail'?

What impact would Cisco's failure have from a technology standpoint?

Is Cisco 'Too Big To Fail'? Companies come and go all the time, due to lots of factors. Economic, political, legislative, all reasons why a vendor is here today, and gone before close of business tomorrow. What impact would Cisco's failure have from a technology standpoint?

The conventional definition of failure for a corporation is largely economic. Under that definition, an entity does it's best to repay it's outstanding debt using it's remaining assets. In a corporation's case, it usually means reorganization under bankruptcy. The company either emerges changed (and hopefully better equipped to survive,) or does not emerge at all. 'Fail' as meme on the Internet has more to do with lack of performance rather than lack of success, and Cisco has had more than it's share of detractors who will give a hearty 'FAIL!' at the drop of a packet – but does networking's continued existence depend on Cisco's continued existence?

Let me just put my horns and barbed tail on for a moment, and argue for both sides:

    Yes, Cisco is too big to fail.

  • The installed base of equipment is too costly to replace, even over an extended purchasing cycle.

  • The growth of bandwidth demand around the world needs to be met, and Cisco is one of the few companies meeting that demand in a timely fashion.

  • Cisco's continued innovation is what's helping push broadband penetration into new environments.

No, Cisco is not too big to fail.

  • The user community that has been developed is large, diverse and involved. They would immediately pick up the slack, in terms of support, possibly even in terms of development.

  • The Open Source movement's done it's share of hardware hacking, in addition to software, while applications and OSs have generally been it's focus, there is open-source networking out there. (Much more than Linksys's WRT-54G, too!)

  • Much of the innovation Cisco has done has come through acquisitions, and those folk are still out there, and can find alternative sources of funding.

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Cisco, as an organization, doesn't seem to be in any danger of failing due to economic conditions. While some people complain that the stock's lackluster price indicates a failure of some sort, the truth seems to me that Cisco's fate lies not with the markets, but with their clients and business partners. That strategy is sound, as far as I can tell. Are they too big to fail? My conclusion is no, but that's not hard and fast. I've seen too many really random things happen to be certain. Can you be certain?

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