> I am proud to work for Cisco in various spaces -
currently on the
> receiving
> end of a Cisco acquisition. Having worked previously
for Cisco in the
> marketplace on a wireless account team as an engineer,
and now as a staff
> engineer for a complimentary product line to existing
optical gear at
> Scientific Atlanta, I have the unique perspective of
being on both sides
> of
> the Cisco acquisition mindset.
>
> Any company thinks they're the best at what they do.
"J" -uniper, Foundry,
> Extreme, Huawei, Nortel, Avaya-- take your pick at
competitors and it's
> pretty safe to say that while they may or may not have
the largest market
> share, they believe their gear is the best at the
market they play to. If
> you're not the best you strive to be, and that goes
for Cisco, Juniper,
> and
> any/all the others mentioned above.
>
> Acquisition is not meant to fix holes or bugs in
existing market share. If
> it were you'd be out of business in no time flat
because you'd be
> competing
> against yourself and wasting capex with no revenue
return from new
> markets/products. Linksys gave Cisco phenomenal
consumer presence where
> previously Joe Q. Public on the street who bought gear
for home from Best
> Buy may have heard of Cisco, but had no idea what their
products were now
> recognizes the company, the logo, and the brand.
Scientific Atlanta gives
> them a huge huge boost in the application space - not
just video or CATV,
> but other potential future markets and content.
SA, Linksys, and other acquisitions like Stratacom were
market-expanding
acquisitions. These were all companies that were well
established within
whatever niche they were in. These are straight-up M&A
deals in order to
obtain strategic market positioning.
However, there is an entire different group of acquisitions
that one can
safely call 'technology-expanding'. Let's face it. The
vast majority of
acquisitions that Cisco has made have been small startups.
Some of them had
barely shipped any product, and in a few rare cases, had yet
to book a sale
at all, before Cisco acquired the company. Clearly neither
Cisco nor
anybody else was seriously competing against such a startup.
There was no
competition to be seen. Cisco scooped these companies in
order to fill a
technology hole, pure and simple.
As a simple example, Cisco acquired Signalworks in order to
outfit AVVID
with better echo-cancellation technology, nothing more,
nothing less. It
was a basic admission that Cisco's current echo-cancellers
weren't quite
cutting it.
In fact, there is an entire cottage industry of little
network startups in
Silicon Valley and elsewhere who are deliberately trying to
set themselves
up to be acquired by Cisco or some other large network
vendor. These
companies have little serious intention of becoming a
'real' company that
can stand on its own. Instead, the company management, and
especially the
VC investors, are pushing these companies to develop a
feature that the big
vendors are seen to be lacking, such that will be scooped
up. In fact, you
could see this as a form of outsourced, VC-funded R&D.
Instead of running
your own large corporate R&D department the way that
Xerox did with PARC,
Lucent did with Bell Labs, and IBM did (and still does) with
its labs, just
have the startups do the groundfloor development and then
acquire the most
promising of those startups.
Message Posted at:
http://www.groupstudy.com/form/read.php?f=7
&i=108146&t=108076
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