Cisco Gets The World Thinking About The Convergence Of Networking And Telco

from the a-conversation-piece... dept

The rumor of the weekend, of course, was that Cisco was hanging out in Finland kicking the tires on a huge potential merger with Nokia. This has certainly received a mixed response from commentators, with the leading thought basically being something along the lines of “but, why?” Though, honestly, if it’s true, it’s not that hard to figure out the motivations. On Cisco’s side, the company recognizes the obvious trajectory of a few trends showing that networking and telecommunications are merging (and, in fact, have been for quite some time). Having a networking company and a telco equipment company merge could make that convergence a much smoother process. Cisco has always been a company that has grown through acquisition, though, certainly not on a scale like this. The second question, though, is why would Nokia ever agree to such a deal. And, in fact, that does seem unlikely unless the asking price is too good to be true, and then Cisco’s shareholders might flip out. Merging the two would be quite a challenge, and the most likely situation would be Cisco leaving much of Nokia as is, while slowly working to merge the equipment areas where they overlap (similar to the way they’ve handled the Linksys acquisition). Still, if you had to make a bet, it seems like the odds are against any type of pairing in the near future between these two companies.

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