"As we all know, Cisco has $40 billion in the bank.

"Cisco sells to service providers (SPs) like AT&T and Verizon as well as emerging providers like Savvis (bought by CenturyLink) and Terremark (bought by Verizon).

"These Cisco service provider customers were faced with the rise of OTT providers such as Amazon and Google who created new markets where they previously didn't play and are now earning billions.

"As cloud computing arose as an opportunity for them, Cisco's service provider customers were slow to respond for many reasons.

"Meanwhile, Cisco's strategy was to sell equipment to its SP customers for cloud and it only had a few people in business development who were focused on evangelizing the cloud business opportunity.

"Cisco did not staff up in a big way in this area and had spotty coverage when it came to Cisco employees who could drive cloud business models with SPs.

"Imagine if Cisco had staffed up in a big way to push the cloud model with SPs and imagine if Cisco had seeded the startup of this business by providing equipment and capital to the SPs to get them going using some of that $40 billion in cash?

"There are maybe 300 SPs worldwide who are looking at this model but struggling with how to address it and they don't have the capital to throw at it. If Cisco had formed partnerships with them and seeded them and helped them go to market they would be buying more and more Cisco equipment as they built their cloud businesses.

"Cisco could also have paid a dividend to keep shareholders happy during this time. Instead Cisco did massive stock buy backs that had no upside potential and went after adjacent markets that were not a core competency.

"How could Cisco management be so stupid to miss the opportunity to jump start its loyal service provider customers into the cloud business model that's built on Cisco's core equipment?"

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