Cisco chief assesses IT effects from US attacks

By ADAM GIFFORD

For Cisco Asia Pacific president Gordon Astles, last week's attacks on the World Trade Center came uncomfortably close to home.

Instead of spending the week talking to New Zealand staff and customers, Mr Astles spent much of it in his hotel room trying to create an exit route for his wife, who picked the week to do some business in New York.

The wider Cisco family was also affected: one of its staff members was a passenger on one of the hijacked planes.

Mr Astles said companies in the financial industry in and around the World Trade Center were big users of Cisco networking equipment.

"It's unclear at this point if they will relocate or rebuild. We have set up customer response centres round the world for those most badly affected," he said.

Companies will be reassessing their IT infrastructure and the security of their data. Mr Astles said there could be renewed interest in redundant networks and redundant IT - having spares for everything.

"I'm a customer of three companies with headquarters operations in or round the World Trade Center, and I've been onto the web sites to see if my accounts are still safe," Mr Astles said.

"The Bank of America didn't seem to slip a beat. Salomon Smith Barney, American Express, whose building was evacuated - everything was up and running."

Cisco will be knocked by the lock-down on air travel. "Ours is a physical product that has to get from one point to another, so customers will be severely impacted."

Mr Astles expects a more rapid take-up of technology such as storage area networking, where multiple storage devices are tied together with fibre channel.

He also expects the shift to internet protocols (IPs) to continue and accelerate. As well as its market share, Cisco has no debt, $US18.5 billion cash in the bank and gross margins around 50 per cent. Mr Astles said Cisco's $US2 billion write-down in inventory earlier this year was minimal compared with its market capitalisation of well over $US100 billion.

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Salomon Smith Barney

Bank Of America

American Express