Networking neighbourhood is laughable

The decision by Cisco Systems to acquire home networking technology manufacturer Linksys Group Inc. is “”laughable”” according to the president of 3Com’s Canadian subsidiary. 3Com is of course one of Cisco’s biggest rivals.

Now let’s talk about what’s really laughable in the home networking space.

In the fall of 1998, Compaq Canada toured a bunch of journalists through a ‘networked home’ in a mansion-filled Toronto neighbourhood. This networked home consisted of a laptop in the kitchen, a PC in the bedroom, another in the living room and maybe a server in the basement, all linked together by Ethernet cable running down hallways and up and down staircases. The attendees were far more interested in the artwork the place contained and the stone patio overlooking the ravine out back. And I believe there was some jumbo shrimp.

And who can forget – more to the point who can remember – Novell’s NEST?

Dateline: Orem, Utah, Feb. 6, 1995. “”Novell today announced it has begun to ship its NEST (Novell Embedded Systems Technology) software that it believes will be instrumental in making computer networks meaningful to a billion users by the year 2000.”” According to Novell these billion installations were to include home networks that would link “”telephones, televisions and many other devices . . . home appliances, personal digital assistants – even automobiles.”” Yeowch, and pass me my jetpack.

Now let’s get some input from the people who really know the home networking business. Reports out of this year’s Consumer Electronics Show, held in Las Vegas in January, do indeed quote Yankee Group analyst Ryan Jones saying that home networking “”is going to be huge this year.””

And, as Jones says, networking giants including Cisco have been pushing these concepts for years. This in not a first foray for Cisco into the home networking markets. It is its biggest deal in the consumer area of networking, but not the first. And any networking company that ignored this market would be totally out to lunch. The pervasiveness of the Internet? The rapid spread of high-speed connections? The growth of homes with multiple PCs? It’s not marketing rocket science to add those together and find the sum equals big growth. And 3Com itself has built a business on small, easily managed networking devices for small business and, yes, the home.

The U.S. hit 16 million broadband households by the end of 2002, according to Jones. “”We’re going to see the applications associated with [home networking] really start to take off,”” he said.

And when you’ve got heavyweights such as Sony with their CoCoon (I just love that name) enabled products, you’re looking at an argument for the explosiveness of home networking that’s pretty darn hard to disagree with. CoCoon, which Sony unveiled last September, aims to create a “”new style of audiovisual entertainment centered on home television”” by equipping key gateway devices with large capacity hard disks and broadband connectivity.

And as far as other comments such as the Linksys acquisition being far from Cisco’s core competency, Cisco seems quite aware of that and has stated its intention to let Linksys continue to operate as a separate unit.

“”Linksys has optimized its operating model for success in the consumer and

SOHO networking business,”” says Dan Scheinman, senior vice president of Cisco’s corporate development.

When Charles Giancarlo, Cisco’s senior vice president of switching, voice and carrier systems was asked, ‘do any Cisco products overlap with Linksys’ products or technology?’ he replied, plainly, “”no.””

“”Cisco’s current products are designed for business and service provider networks. Linksys’ products are designed for home and small office networks, which have different feature requirements and priorities,”” said Giancarlo.

Sounds like Cisco is going into this one with its eyes wide open. And they’d need to be wide open, just to be able to get a good look at all that opportunity.