w00pla is right that Cisco typically avoids becoming a competitor to its biggest customers but there are a lot of positives to be taken from this idea. Any application adding traffic to the network is good for Cisco - even if it's free. Network providers will still have to buy more capacity and that means more hardware dollars for Cisco. Video happens to be very good for this as Chambers has been pointing out for years.
Also, as a stand-alone business, Skype may not be very attractive but integrating the technology and user base into Cisco's other Collaboration solutions gives them a consumer/SOHO solution that matches their existing corporate packages. Over time they can standardize a lot of the underlying technology while continuing to serve the two markets with different price/packing options.
I'm not sure they'd do it because of the conflict it creates with SPs, but I can see the argument for considering it.
Phil
http://tomsawyer.com
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