Commentary: Merits of Cisco acquisition policy

Irene Chen, Las Vegas; Steve Shen, DIGITIMES Asia 0

There have been diverse opinions about Cisco Systems' continued acquisition policy for over the past 25 years, with one of the opinion groups even arguing that the operating benefits derived from these acquisition projects have been limited, or less sucessful than expected. But for Cisco, this is simply not true.

A close look at the acquisition projects and follow-up integration strategies implemented by Cisco over the past two years, clearly indicate that Cisco boasts the ability to synergize and transform target companies in its post-merger integration processes.

Cisco has also justified its policy as saying that it has not been eyeing the growth potential of the core businesses of target companies, but rather the synergistic effects between the core technologies of target companies and Cisco's existing technologies and product lines.

The takeovers of Meraki and Jasper Technologies mark two recently successful merger cases. The two companies have not only seen their original product lines expand significantly, but have also seen their products venture into other segments after integrating with Cisco's solutions.

Cisco's established acquisition policy continued in the first half of 2017 with four deals reached in the six-month period, including the takeover of APP Dynamics for US$3.7 billion, as well as SD-WAN solution provider Viptela, data analyzing startup Saggezza and AI innovation startup MindMeld.

Cisco's next-generation network solutions, including Intuitive Network and Intent Based Network, are mixed with a number of technologies such as machine learning, AI, data analysis and security protection, some of which were secured via acquisition projects in recent years.

Cisco's collaboration solution, Spark, is being rolled out following the acquisition and integration with Worklife. Additionally, a portion of MindMeld technology will be also incorporated into Spark in order to expand the application scope of Cisco's mobile team communication tools.

To sum up, Susie Wee, vice president and CTO of DevNet Innovations at Cisco Systems, said Cisco's existing teams are always excited and eagerly looking forward to working together with new corporate teams brought into Cisco through mergers, particularly as the market is facing increasing demand for innovations to support ever diversifying technology applications, which require new technologies and resources.