Networking

If anyone has any interest in the networking indusrty (in which I work) then have a look at this website:

http://www.lightreading.com/

This article in particular is very interesting:

http://www.lightreading.com/document.asp?doc_id=102950

Mainly, the part about Cisco marking up optics.
Quote:

"It's well known that Cisco Systems Inc. (Nasdaq: CSCO - message board) customers are just about forced to buy optics from Cisco, and at hefty markups. The practice is an annoyance to some customers -- and now a report suggests investors should start worrying about it, too."

"Cisco doesn't consider optical module reselling to be a separate business unit. But Schmitt claims the practice generates some eye-popping revenues -- $2.5 billion in fiscal 2006, or 9 percent of Cisco's total, he believes."

"But the margins on optics are so high -- up to 90 percent gross profit, Schmitt figures -- that they're padding the company's profit growth, he says. "

This not only annoys customers, it annoys the heck out of suppliers who sell the optical module to Cisco for X dollars (at -Y profit) and then Cisco sell it on at X * 5...........

Welcome to my world