And Juniper Networks says not to count it out, either. Juniper says that unlike Cisco's IOS, its operating system was built from scratch for scalability. "There's a difference between light residential use for 200,000 enterprise customers and industrial use for 5 million service providers," says Scott Kriens, CEO of Juniper Networks. More competitors are coming, too: Terabit router start-up Avici Systems just won an account with Enron Communications, a Houston energy provider that's building a nationwide voice/data network.

"The public network is complex," says Morency. "Cisco hasn't been in this market, and you don't overcome disadvantages overnight." Cisco has little experience building extremely reliable voice infrastructures. It lacks Lucent's and Nortel's familiarity with circuit-switched PBXs and optical transport technologies. Fiber-optic technology, which supports unlimited bandwidth for voice, video, and data traffic on one network, is expected to be a $41 billion market in five years.

Also, many large service providers prefer asynchronous transfer mode's proven quality of service and 99.999% reliability over IP's best efforts. Cisco, which has always put most of its money on IP, participated in developing an ATM-like protocol called Multi-Protocol Label Switching to help IP achieve better quality of service for voice calls and differentiated services. But some carriers are waiting until MPLS proves itself, and until then are sticking with ATM. Although Cisco offers ATM switches, some providers say its central management software doesn't cut it.

SBC Communications Inc., which owns carrier networks such as Southwestern Bell, says that's one reason it didn't select Cisco for its next-generation network. The network, a $6 billion, three-year initiative, will make broadband services available to 80% of SBC users by pushing fiber and digital subscriber line equipment deeper into the neighborhoods it serves. SBC will deploy advanced packet-switching technology--voice trunking over ATM--to create an integrated voice, data, and video backbone network.

SBC chose several Cisco competitors for the project, including Lucent and Nortel. "Nortel and Lucent offer a number of products that have an integrated management system, but right now Cisco doesn't," says Sam Saigarto, SBC's executive director of broadband switching and transmission.

CIMI analyst Nolle says Cisco's decision early on to focus on IP puts it at risk. "The infrastructure over the next five years is not going to be all IP--it will be ATM." But Cisco VP Lang says the vendor never planned to replace ATM with IP, and that its strategy to link IP and ATM through MPLS is paying off. The Dell'Oro Group reports that in the third quarter of 1999, Cisco showed healthy growth in the ATM market.

And Cisco can point to partnerships to build next-generation IP infrastructures with providers such as Qwest Communications International Inc. The long-distance phone company, and CPN-certified provider, last summer extended an agreement to deliver Internet-based data, voice, and image services, such as VPNs and Web call-center systems, primarily over Cisco-built networks to its 4.5 million users.

Cisco is gobbling up companies with technologies that are key to helping carriers deliver converged networks. More than half of its acquisitions in the last two years--to the tune of about $10 billion--were made to drive its presence in the service-provider market. Chambers says he anticipates acquiring another 25 to 30 companies with competencies in this area this year.

This month, Cisco spent $355 million for Growth Networks Inc., a leader in Internet switching fabric silicon. This will help it deliver to service providers enhanced terabit products for moving voice and data on one network at high speeds, which becomes more critical with high-capacity optical networks. Cisco also completed its $2 billion acquisition of Pirelli S.p.A.'s optical systems business, whose dense wave multiplexing technology should help it develop boxes to put traffic on optical networks.

The optical market "is a very critical market for Cisco to be a leader," says Ajay Diwain, a VP at Goldman Sachs. "You can't sustain 40% to 50% growth from year to year without entering new large markets." But not everyone is sanguine about its chances: "Cisco is just now coming to grips with what transport is all about," says Dana Cooperson, director of transport optical networking consulting at RHK. "They may think it's easier than it is."

Cisco must maintain its momentum without losing focus on its core users. "The fear of getting too far away from customers keeps me up at night," says Chambers. Yet some longtime Cisco users have felt the sting of its rapid growth. Though Cisco's strong channel presence helps alleviate some of the support burden, Morency says, "When a company gets too large and has to depend on the channel sales force or farm out customer interaction to the Web, it loses high-touch quality."

Support has diminished in quality, says Ted Sopher, network manager at Lawrence Berkeley National Laboratories in Berkeley, Calif., who's been a Cisco customer for more than a decade. About 80% of the lab's network is made up of Cisco devices. When Sopher recently experienced problems with his Cisco firewall, he couldn't find what he needed on the TAC Web site and had to wait hours before Cisco technicians could help. Sopher says he'll remain loyal to Cisco, but analyst Passmore says support issues can open the door for competitive startups, which can provide personalized support.

Cisco appears to recognize some shortfalls; it has added detailed trouble-shooting data to TAC. Chambers admits to challenges, but says Cisco is increasing its head count by 40% annually to meet them. Employees are compensated based on user satisfaction, and Cisco says most users are happy--the vendor scored 4.20 (out of 5.00) on its customer-satisfaction survey in 1999; it wants to score 4.23 this year and raise channel satisfaction numbers above 3.94.

As Cisco moves forward, Morency counsels caution. "Sometimes the time a company is most vulnerable is when it's experiencing its greatest success," he says. "That's when they get too comfortable and stumble."

But Chambers doesn't seem worried. "We'll trip up a couple of times," he says. "I believe that when you trip, that says how good you are." But tripping doesn't mean falling. "We've built a strong team," he adds, "and you'll see us evolve our team both in breadth and in depth."

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Illustration by David McLimans