In an not unexpected move the Dow has morphed. No longer is GM part of the DJIA industrials mix. It is being replaced by Cisco –

With American car maker General Motors filing for bankruptcy, the Dow Jones company - which puts together the eponymous industrial average to gauge the strength of the stock market and, in turn, the U.S. economy - had to yank GM from the DJIA index this morning. GM will be permanently removed from the index, as it turns out, and on June 8, it will be replaced by networking maker and server wannabe Cisco Systems.

In an interview at the Wall Street Journal’s online site, John Prestbo, the executive director in charge of the Dow Jones indexes, explained that removing GM from the ranking of the 30 industrial companies was automatic, since the company does not allow bankrupt firms in the indexes. Prestbo explained that Dow Jones sees Cisco as transformative to American culture and business, like the car was at the beginning of the last century, and referred to the maker of networking gear as the “pavement of the information highway.”

Times change. But Silicon Valley needs to watch out. The Washington types have their eyes on you too.

Linky.

In the world of FOSS FSF has a track record of not losing. That track record stays intact with their only case to go to court. Upon getting their it appears Cisco had an epiphany of the first order –

The question we asked in January about whether Cisco would make it to court against a Free Software Foundation (FSF) GPL violation suit has been answered.

The answer was no.

The settlement announced Wednesday is everything open source could have wished. Cisco will ride herd on its Linksys subsidiary, where these violations have been taking place, it will notify customers of their rights, it will release the relevant source code, and it will make an unspecified “contribution” to the FSF.

A blog post on the settlement emphasized that compliance, not cash, was and remains the FSF’s goal in these suits.

This was the first time the FSF went to court over a GPL violation, the blog post noted, adding:

When the violator admits that there’s been a mistake and demonstrates they want to fix it, we take it as a sign that we can cooperative productively, instead of an opportunity to pounce.

“We’re not out to wreck businesses or make lots of money. We just want compliance,” the post concluded.

For Cisco this means something more than they (thru the Linksys sub) just goofed. It also means that there will be a flood of knockoffs coming both at the software level but at the hardware level as well. So to a point, the bottom is falling out of pricepoints for the consumer grade market at Linksys. All a geek has to know is that the outside of the box says “MRT54G” compatible and the rest is history.

There is one other aspect to this that is significant as well. Cisco as a company is in many ways like Google. They let you peek, but they don’t really give away the deep secrets. Been operating that way for years. So the question has to be asked how much of their enterprise grade equipment is also using FOSS software? That too will be exposed.

Can you imagine ‘Tomato’ on a Cisco 7301 router?

Linky.

Act One: Nortel appears to be headed for bankruptcy court. They have made arrangements with their outside counsel to acquire the necessary talent for a filing. –

Nortel Networks Corp. has sought legal counsel regarding bankruptcy protection, according to a published report.

The Canadian networking equipment company is seeking the legal advice to protect the company from creditors in case a restructuring plan fails, according to a report in today’s Wall Street Journal. The Journal also reported that the Toronto-based company may ask the Canadian government for help.

I don’t think I need to tell you that this is NOT good news. Think Cisco is gouging you now. Wait till they are the lone enterprise network supplier. ‘To the Moon Alice!’

Act Two: The FSF files suit against Cisco for GPL infringement. Most of the suit hinges on the Linksys brand. The tools infringed on are GCC, C, binutils, ie the guts of any C language build one would use for embedded project development.

I would figure that FSF has the goods. Most C compilers has certain ’signatures’ that are readily identifiable in the underly assembler code by mere inspection. Some even go so far as to leave a label area with the name of the complier used by name. Kinda like a low level version of a meta tag in HTML –

BOSTON, Massachusetts, USA — Thursday, December 11, 2008 — The Free Software Foundation (FSF) today announced that it has filed a copyright infringement lawsuit against Cisco. The FSF’s complaint alleges that in the course of distributing various products under the Linksys brand Cisco has violated the licenses of many programs on which the FSF holds copyright, including GCC, binutils, and the GNU C Library. In doing so, Cisco has denied its users their right to share and modify the software.

Most of these programs are licensed under the GNU General Public License (GPL), and the rest are under the GNU Lesser General Public License (LGPL). Both these licenses encourage everyone, including companies like Cisco, to modify the software as they see fit and then share it with others, under certain conditions. One of those conditions says that anyone who redistributes the software must also provide their recipients with the source code to that program. The FSF has documented many instances where Cisco has distributed licensed software but failed to provide its customers with the corresponding source code.

Now the reason I post these two acts is that generally one action has consequences to another. Is the Nortel plight related to Cisco inappropriate behavior? I have no smoking gun either way but one has to ask. The effects could be broader than licensing. If it can be shown that the entire Linksys line was unfairly placed in the market Nortel might be able to make hay over it. Nor would Nortel have to enter into US court to do so. The would go for a NAFTA board adjudication. That could get nasty.

Nortel story.
FSF suit.

Epilogue: The folks at InfoWorld ask the question — Is Cisco an Open Source Leech?

That folks is their quarterly loss not their capitalization. If somebody would give me .1% positive net off that deal, I’ll stop posting here and send postcards from the South of France. The prescriptive of course is thousands lose their jobs as a consequence. The analysts can’t even paper it over –

NORTEL NETWORKS CORP. FACES AN UPHILL CLIMB following a third quarter where the company reported losses of $3.4 billion and said it would cut thousands of jobs and say goodbye to a number of high-ranking executives.

Analysts said tough times are ahead and one even suggested bankruptcy could be a possibility for the Canadian networking equipment company.

“It is not a pretty picture,” said Ronald Gruia, a consulting analyst for Frost & Sullivan. “There is no way to sugarcoat it.”

In a note written by RBC Capital Markets’ analyst Mark Sue, Nortel could run out of money before 2011 when its $1 billion bonds mature.

“Considering the worsening macro environment, Nortel’s challenged industry position and concerns related to liquidity while the capital markets are basically closed, we think bankruptcy is a distinct possibility down the road,” according to Sue’s note.

Nortel’s stock also had a rough few days following its third-quarter financials. The stock fell to 65 cents per share on Wednesday, before bouncing back to 78 cents per share on Thursday. But by Friday the company’s stock was down again trading at 56 cents cents per share. Sue cut his projected target price for Nortel’s stock from $1.50 to zero.

Ouch! When an analyst says your stock is worth $0 then baby its time to rethink the game plan. Nortel’s biggest problem other than financial is lack of vision. They have for years played second fiddle to Cisco even though much of their product line is on par with their rival. Even some of their acquisitions have made more sense that Cisco’s. But they are not viewed as a leader in the space. That never good positioning for a IT player.

Linky

The plunge is not some new venture but Nortel’s stock price. Friday’s close has their stock down by 15% on a flat 2Q earnings report. The importance of this I will get to in a minute. But first here is the 5 day action last week. –

The consideration? Cisco and Nortel are infrastructure vendors. They have retail presence of course, but the main body of their income streams is selling to corporations. When corporations stop investing due to lessened consumer demand companies like Cisco and Nortel feel the draft. It will be interesting to compare Cisco’s 2Q results.

Now were I a smart Muni looking for a Wifi/Wimax supplier I would be tapping both these firms. They’re going to be hungry and will sweeten the pot and lower their prices. Just like the housing market now is the time to buy network infrastructure.

Linky

It will be interesting to watch the investment community try to read the tea leaves on this one. It’s probably safe to say the Mr. Giancarlo does not anticipate a big jump in Cisco’s stock price for the near term. Giancarlo’s next role is as managing director at the investment firm Silver Lake.

Giancarlo joined Cisco 14 years ago when it bought Ethernet switch maker Kalpana. He started Cisco’s business development organization and spearheaded its aggressive acquisition strategy, even in the lean years following the dot-com crash of 2000.

During the conference call, Chambers and Giancarlo were affable and nostalgic about their long working relationship — but they never minced words: Chambers said he has little intention of stepping down in the near future; he emphasized that he would remain CEO for at least three years, more likely five.

Meanwhile, Giancarlo alluded to his ambitions to be at the helm of a company, and he was frank about the shrewd calculations he made about his career after turning 50 this year.

“I went home one day and talked to my wife and said, ‘Honey, I now know what you mean by a biological clock,’” Giancarlo said. “I feel young, but you do the math: I don’t know what my decision process will be in five years, but I know what it is today.” (from Yahoo)

I’m hesitant to buy into gloom and doom predictions, but I think the IP address shortage is a real possibility. I still won’t buy into the crash and burn theories for the internet, but it looks like IPv6 will be a necessity sooner rather than later. Quoting Jim Bound, IPv6 Task Force Chairman in an interview with Network World.

The IPv6 community is now talking about 2010 as the date for IPv4 address exhaustion. Is that date real?

It is very real. It could be plus or minus one year. The consensus is that we have two to four years until we run out of IPv4 addresses. It’s hard to predict how the usage will work. It’s been sporadic over the years. If you go to the IPv6 Forum Web site, you’ll see a counter that shows how much time we feel is left.

It’s very likely the average user will not notice any change if the switch is made. If made, it will create a upgrade rush that is likely to benefit a number of enterprises like Cisco.

Cisco is wrapping up its acquisiton of Navini Networks. Barring in any last minute hitches, the deal should be complete before years end. Navini Networks has had reasonable success in the overseas markets in providing WiMax infrastructure products. —

US$330 million acquisition of WiMax wireless provider Navini Networks Inc. should be completed in a matter of days, helping bring Cisco closer to its intention of bringing wireless broadband to emerging countries.

The planned acquisition of the Richardson, Tex.-based Navini, announced in October, was billed as a means “to drive broadband penetration to consumers and business in emerging countries,” according to a press release issued Oct. 23.

However, Cisco is not ruling out the possibility that WiMax sales opportunities will open up in other markets including the U.S., said Brett Galloway, general manager of wireless networking at Cisco in a short interview at C-Scape 2007, a Cisco analyst conference. “We’ll go where the business is,” Galloway said.

Linky.

Cisco has never made its fortunes by living on the bleeding edge. Rather the company has been successful getting behind a technology when it is ready for the corporate mainstream. Video and interactivity are certainly nothing new to most casual internet users, but they have largely been absent as corporate tools or as apps that service providers have been eager to enable.

Cisco at its C-Scape conference in San Jose beat the collaboration drum in laying out its strategy and vision for the future of networking, with video playing a key part of collaboration.

But while Facebook, MySpace and other Web 2.0 technologies are pushing network service providers like AT&T to deploy major upgrades today, those same technologies are not a network growth driver in the enterprise today. (from eweek)

It would appear that high quality video in the interactive space will be just as pervasive as text messaging in the near future. Access providers should heed this warning.

Om Malik is reporting that EX Moto CTO who’s departure was confirmed today has joined Cisco in a similar role. (From GigaOm)

With the recent departure of Motorola’s CEO, it is beginning to look like an exodus from Motorola could be on the way.