The Great CRS-1 Mystery

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Cisco announced its fourth quarter 2005 results today. A bit of ho-hum, with tinges of good news. The sales were up 2.1% sequentially – quarter over quarter – which means, they really need to do something big to goose up the revenues, or they are relegated to the same bin as Microsoft story – an overgrown technology company forced to give out dividends. I was most intrigued by a few things – they have 22 customers for their new CRS-1 routing platform and 14 in trials. Cisco CEO John Chambers says, “…with our highest-end routing system, CRS-1, customer response has been very strong, with over 150% sequential growth this quarter and customers continuing to expand…” Except names are hard to come by. Swisscomm is one – they issued a press release. Yahoo is another one. Sprint is one, and Comcast is rumored to by buying CRS-1 by the truckload. MCI is supposedly one of the buyers. But the rest? Its a mystery as deep as the SARS virus!

Also, that whole Nokia thing…. not true, as per John Chambers.

> While not directly referring to Nokia, Mr.Chambers stated that is was extremely unlikely Cisco would ever do a large acquisition, as it does not fit into the company’s strategy and he believes a majority of those acquisitions are unsuccessful. He went on to say that Cisco would remain active in its pursuit of acquisitions, however, those would be primarily much smaller companieswith attractive technologies.

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Jim Brady

Hi Om,

We wanted to follow-up regarding your blog posting on August 10, “The Great CRS-1 Mystery,” and share some additional information that was not provided during our Q4 FY05 earnings call.

Cisco is very pleased with the positioning, mindshare, and architectural evolution that CRS-1 is receiving. The CRS-1 continues to have very strong momentum with sequential growth over 150% and we have won key architectural design-ins in some of our most important service provider verticals, including European and Asian PTTs and cable MSOs. With over 100 CRS-1 units deployed, customers continue to expand, as we currently have 22 CRS-1 paying customers and an additional 14 customers trialing the CRS-1, up from 15 CRS-1 customers and an additional 15 customer trials in Q3.

Publicly announced customers include Swisscom, BT, SOFTBANK BB Corp. (providers of “Yahoo! BB”), The National Institute of Informatics’ SuperSINET research network in Japan, National Lambda Rail, and Pittsburgh Supercomputing Center. Currently, Telecom Italia and other tier-one service providers are trialiing the CRS-1.

Our cutomers decide if and when they announce product deployments, and we will continue to release this information as it becomes publicly available.

Take care Om…and we’ll keep in touch.

Best regards,
Jim Brady
Public Relations
Cisco Systems, Inc.

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