Cisco's Gains Drain Riverbed

With Cisco's hand in everything from data storage, voice-over-Internet-protocol gear, network security and video conferencing to the basic data plumbing such as office routers and switches, the complexity level runs a bit high, say industry watchers. On the bright side, if something goes awry, there's one company to call.

"Cisco is like the new IBM (IBM Quote - Cramer on IBM - Stock Picks)," says one industry observer who asked not to be identified.

As Cisco exerts its dominance, even the more established gear peers could find sales getting tougher.

"Extreme (EXTR Quote - Cramer on EXTR - Stock Picks), Foundry (FDRY Quote - Cramer on FDRY - Stock Picks) and 3Com (COMS Quote - Cramer on COMS - Stock Picks) will all continue to feel the heat from Cisco as they try and sustain above-market growth rates," says one New York money manager.

And some of the leading-edge technology shops, along with the strong niche players such as Riverbed (RVBD Quote - Cramer on RVBD - Stock Picks), could eventually get hammered, says the investor, who currently likes Riverbed.

"Riverbed has done well, and channel checks indicate a decent niche market," says the investor. "But those guys are done long term, as Cisco has them in their cross hairs."

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