Cisco Increases VoIP Functions, while Searching for More Skills in India

Cisco Systems, Inc.  recently announced the availability of mobile VoIP solutions for network service providers. In other news, Cisco indicated they were looking for more IT talent in India, while Foundry Networks, Inc. and Extreme Networks continue to struggle against Cisco's enterprise networking dominance.

Focal Points

• Officials from Cisco recently announced that they had partnered with iSkoot, Inc. to offer network service providers new mobile Voice over Internet Protocol (VoIP) solutions. iSkoot has software that makes it possible to send and receive VoIP calls on regular cell phones. This means there is no need for extra hardware or other connections for VoIP calls. Officials said that they have tested the solution and believe it will help improve carrier revenues against services such as Skype.
• Officials form Cisco recently said that there were planning on dramatically increasing the number of IT experts in India with Cisco-specific networking skills. Cisco recently announced there were planning on investing over $100 million into India through venture capital, and further stated that they intended to have up to 20 percent of its "top talent" in India within in the four years. In addition to having Cisco employees in India, it would also like to increase the number of Cisco certified engineers to 360,000.  Cisco has partnerships with training companies IIHT and NIIT to help achieve this goal.
• Executives from Foundry and Extreme both reported positive financial results in their last quarters. Foundry's fourth quarter revenue increased more than 27 percent to $168.7 million, while officials from Extreme reported a seven percent increase to $92.5 million. While both companies are increasing their revenue, Foundry is increasing its total revenues and its rate of growth at a larger rate than Extreme. While these numbers are solid, Experton Group expects it will become more difficult for these companies to compete in the enterprise market, especially with Juniper Networks, Inc.'s recent entry into the enterprise switching market.

Experton Group believes Cisco will continue to dominate the enterprise networking market, but that Juniper will start to erode Cisco's position as it moves more aggressively into the enterprise space. The near term casualties of this move are more likely to be Extreme and Foundry, although Cisco will eventually feel these effects, as IT executives look to get increased competition in enterprise networking. IT executives should use Juniper's entry into the enterprise as a signal to look for more pricing and service concessions from Cisco in the enterprise market.