Sun Microsystems has been telling us for more than a decade that the network is the computer. If so, what it's really talking about is Cisco (NASDAQ:CSCO).

Cisco wasn't the first company that ever designed a router, nor has it been the cheapest hardware provider in a hotly contested networking market. But thanks to brilliant management and a real commitment to excellent service and innovation, the company is pretty much synonymous with computer networking these days.

Cooking up a storm
The secret sauce is so very simple -- listen to your customers and figure out what they might want five years from today. Then you build products that can deliver on those distant requirements, refine them in close partnership with the people who needed 'em to begin with, and extend the new innovation to the global IT space.

Nortel Networks (NYSE:NT), Juniper (NASDAQ:JNPR), or Ciena (NASDAQ:CIEN) might come up with the occasional novel design or beat Cisco's pricing in the constant battle for customer contracts. In the interest of protecting margins, there's not much to do about the bargain-basement strategy. The one-hit wonders, on the other hand, are mere blips on Cisco's radar -- annoyances that will fade into insignificance in a couple of years.

In the meantime, the big C stays sharp, with a constant focus on long-term performance that virtually guarantees that any defecting customers eventually come back for more. You just can't beat great service in the long run. No one except Microsoft (NASDAQ:MSFT), Google (NASDAQ:GOOG), or maybe IBM (NYSE:IBM) even comes close to the level of industry insight Cisco has -- a serious competitive advantage that took many years to build. And those other giants don't sell switches and routers, do they?

Cisco sports three times the sales of closest competitor Nortel at $36 billion a year, nearly twice Juniper's second-place 11.8% trailing net margin, and it isn't content to sit on those numbers. Over the past five years, sales have grown 13% a year while earnings per share took an even sharper 28% annual upturn. And that growth started from a company with a $90 billion market cap in 2002. It wasn't a plucky upstart with tiny, easy-to-multiply sales and profits.

But wait! There's more!
It gets even better. Sorry, Chuck ... I know that valuation is your thing. But the discount gods are on my side this time.

Remember when the Internet bubble popped, way back in 2000? Many tech outfits -- and certainly the highest fliers -- hit the ground very hard in 2001 after enjoying inflated valuations for a couple of years. In Cisco's case, the stock traded at a staggering 200 times earnings at one point in 2000 and then crashed back to around 30 times trailing earnings, right after 9/11.

And it has only gotten cheaper since then.

You saw the earnings growth already -- 28% a year over the past five years. The share price has grown by only 15% annually over that time. Market-beating, yes -- but hardly a fair valuation. So today, you're looking at a Cisco trading for 23 times trailing earnings, which is both a discount and a bargain compared with any competitor you'd care to name. Remember that Cisco outwits, outperforms, and outinnovates any of those other guys on a regular basis, and you'll start to see the massive bargain we're getting today.

The network is the computer. And it's on fire sale.

Further Foolishness:

You're not done with this duel yet! Read the other three arguments, sound off at Motley Fool CAPS, and vote for a winner.

Microsoft is a Motley Fool Inside Value recommendation. Check out our service for bargain hunters with a free 30-day trial.

Fool contributor Anders Bylund is a Google shareholder but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure is the story.