IBM switches, such as the Nways line, will be supported, but development and marketing efforts for most of the products will cease. Cisco executives hinted that they might add certain IBM switches to Cisco's product line that don't directly compete with Cisco products.

"IBM has spent the past five to seven years and hundreds of millions of dollars trying to be a provider of Ethernet gear, and it has been universally unsuccessful," says Joseph Skorupa, a director at research firm Ryan, Hankin & Kent.

The companies say they will develop migration paths from IBM IP and Ethernet equipment to Cisco's products. Cisco garners three-quarters of all router revenue and nearly half of all enterprise switch revenue, according to the Dell'Oro Group (see chart below). IBM will retain ownership and continue to develop its Token Ring equipment, Systems Network Architecture systems, Ethernet adapters, and other networking equipment.

Cisco and IBM will also cooperate to offer network consulting and design services, including procurement, implementation, and maintenance services. "Ultimately, people don't want networks as much as they want Internet business services," says Donald Listwin, executive VP for service provider business at Cisco.

IBM Global Services will provide E-business consulting and network integration services to Cisco customers and train more of its own technicians to support Cisco networks. The E-business services from the IBM relationship, coupled with services stemming from Cisco's $1 billion investment in consulting giant KPMG LLP last month, are designed to provide services to companies whose IT staffs are stretched to the limit.

The IBM and KPMG relationships help to fill a gap that developed last month when Lucent acquired International Network Services, a consulting firm in which Cisco held a 7.8% equity position. Because of the Lucent deal, Cisco could no longer work with INS. "Cisco is trying to portray itself as a solutions provider, and part of convincing users of that is to have a world-class services and support organization. Certainly, IBM would help them do that," says Curtis Price, program director at analyst firm StrateCast Partners.

But Cisco's increasing dominance of the enterprise and other markets comes, quite literally, at a price. IT managers often pay 30% more for Cisco products than they would for comparable gear from competitors such as 3Com or Nortel.

Not everyone subscribes to the doctrine of Cisco everywhere. Says Charles Rutstein, an analyst at Forrester Research, "There might be some argument that could be made that the Cisco Powered Networks stuff affects IT people's decision in choosing one carrier over another, but I have difficulty believing that." Critics of Cisco's branding effort argue that standards-based interoperability should take precedence over vendor-specific solutions, even if one company dominates the market.

That's one reason some IT managers aren't comfortable basing their entire network on Cisco products. Air Products and Chemicals Inc., a provider of speciality gases and chemicals in Allentown, Pa., uses Cisco, Nortel, and 3Com products in its global network. "Right now, nobody comes close to what Cisco has," says Virgil Palmer, Air Products' director of telecommunications and networks. "But the challenge they face is convincing large companies to use a single source for everything."

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