Cisco Returning To Its Roots With Aggressive Acquisition Strategy

from the just-like-the-old-days dept

During the last bubble, Cisco was famous for its furious acquisition strategy, and it got to the point that integrating small networking startups into its own product line became one of its core competencies. After the bubble burst, the pace of its acquisitions slowed down, in part because the company’s stock, which it used as currency, became less valuable. Lately, however, the company’s gotten back to its old ways, although a couple of its purchases are of a different nature. Instead of buying up actual networking companies (as in switches and routers), the company’s recent purchases have been in social networking. The fit with its main business isn’t clear, although Cisco is hoping it can sell social networking-related services to its regular customers. Today the company announced the purchase of WebEx, a maker of business collaboration software. The company already has similar offerings for large businesses, but WebEx is a hosted offering, which makes it well-suited for small- and medium-sized business, a group that almost every major tech company is gunning for right now. Along with its recent purchases, this acquisition makes it clear that Cisco sees its future growth not in selling actual equipment (although that will be its core business for a long time), but in selling services and software that make use of its equipment.

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