Ciscos Rise Reflects Big Economic Picture

By Chris Preimesberger  |  Posted 2009-06-01 Print this article Print

The announcement not only is a trophy for Cisco and an embarrassment for GM, but also makes a statement about U.S. business in general: It is yet another indicator of the slow-moving, decades-old changeover from a primarily physical-production economy to one that relies on invention, design, intellectual property, and advertising, marketing and sales.

Zeus Kerravala of The Yankee Group told eWEEK that "it's a feather in Cisco's cap, a sign of the times. GM is really the old guard, and our country is built on innovation, not manufacturing."

Charles King, principal analyst at Pund-IT, told eWEEK that the June 1 announcement says a couple of important things about the IT-fueled U.S. economy.

"I remember at the outset of the dot-com boom, when some of the IT companies [IBM, Hewlett-Packard, Intel] had gained such stature and pushed their way on, and it was seen to be a 'changing of the guard' at that point," King said. "This time, I think what we're seeing is [a] fundamental shift away from traditional manufacturing and more toward companies that are leveraging technology for the sake of information. While this isn't a new thing, it does say great things about Cisco's health and longevity as an organization."

Cisco is a company that rose to prominence along with many others during the dot-com boom, King said. "But they've got staying power, and this should be seen as a feather in the cap of [CEO] John Chambers and his company," King said.

Changes in the Dow Jones list are rare. GM was added twice, first for about a year and a half in 1915 and then permanently in 1925. Only General Electric has been on the list longer; GE has been in the index since it began with 12 stocks in 1896.

The most recent change to the list was in September 2008, when Kraft Foods replaced AIG (American International Group).

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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