.....; what it should buy in 2008
Source: NetworkWorld
Cisco made 11 acquisitions this year culminating in 126 purchases since Cisco's birth. It made three more acquisitions than it did last year, when it spent a measly $256 million buying ho-hum technologies. This year was different, not only in the sheer dollar size of some acquisitions, but also because of the breadth of technologies it acquired. From social networks to broadband wireless, we take a look at what Cisco Subnet has named Cisco's top-six acquisitions of 2007. We also look at what Cisco should have bought and what Cisco may be looking to buy in 2008.
Jon Oltsik, senior analyst at Enterprise Strategy Group, writing in Cnet, says Securent, which Cisco acquired for $100 million, gives Cisco application-layer street cred. Oltsik explains that the Securent deal, which closed late November, could be good for Cisco because it provides a set of role-based rules that enforce authorization policies across multiple heterogeneous applications on the back end.
Securent is privately held and based in Mountain View, Calif. The company's distributed policy platform lets enterprises administer, enforce, and audit access to data, communications, and applications in heterogeneous IT application environments. Securent's software will enable Cisco customers to protect application data regardless of vendor, platform, or operating system while still allowing access to content that workers need.
No. 5: Latigent, a maker of call center reporting tools
Cisco boosted its call center offering by buying up Latigent, a vendor of call center reporting tools. Cisco plans to integrate Latigent's products with its unified customer contact center systems. The integrated products will help businesses better manage voice, Web, e-mail and video interactions with their customers, Cisco said when the purchase was announced. The company declined to reveal the terms of the deal.
One of the interesting aspects of the deal was a blog post by Jason Kolb Latigent CTO, giving insight into what it's like to be acquired by Cisco (see here and more recently, here).
No. 4: IronPort helps to breathe life into Cisco's Self Defending Network
Eric Ogren, a security analyst with Enterprise Strategy Group gave Cisco's $830 million acquisition in January of IronPort the thumbs up, saying that "IronPort positions Cisco to finally implement intelligence that can breathe life into its 'Self Defending Network.'" But even with the inclusion of IronPort, there are still some holes in SDN - and in particular, IronPort's data-leakage capabilities, which appear to be missing, as Network World's Jim Duffy reported back in September.
At the time of the acquisition announcement, pundits were also unclear as to what Cisco might do with IronPort's core antispam and Web-filtering technologies beyond continuing to market existing IronPort appliances without disruptions. Also, Cisco and Trend Micro in August extended their three-year-old collaboration to now include Trend Micro's content security features into Cisco routers. Observers wondered where in the picture is the content security of IronPort.
No. 3: Navini Networks puts Cisco in the WiMAX
Cisco in October bought itself into the WiMAX business with its $330 million purchase of Navini Networks. After weeks of speculation over which WiMAX base station vendor Cisco would buy, came news that Cisco would pocket Navini Networks for $330 million.
The company offers Cisco an instant product line of both WiMAX base stations (for both fixed and mobile wireless) as well as client radios. Navini has about 70 customers worlwide, though many of them have deployed the company's initial run of "pre-WiMAX" radio products.
But will Cisco be able to repeat with WiMAX the success it reaped in the Wi-Fi WLAN market after acquiring (for a whopping $450 million) wireless switch vendor Airespace?
No. 2: Cisco wants to be hip in social networking
You couldn't sit in any keynote address that Cisco CEO John Chambers has given this year without hearing the phrases "social networking" and "Web 2.0" roll off his tongue - numerous times. This year, Cisco opened its wallet to buy up a few small social networking developers to boost its enterprise collaboration strategy. Little is known about how exactly Cisco will be using the social networking technologies it has acquired except for a few reports about Eos, a platform that about 40 developers in San Francisco are building which is expected to air sometime next year. Cisco developers describe Eos as a "software platform that serves as an entertainment operating system enabling consumers to have an interactive, personalized, community-based entertainment experience, WHILE simplifying the administrative experience for content owners in engaging audiences, and distributing and monetizing their content." Yeah, that makes everything crystal clear!
Cisco is expecting to be using bits of technology from its acquisitions in Eos. First up in February Cisco bought Five Across, which sells a software platform called Connect Community Builder. The platform includes a variety of features that enterprises can build into their Web presence for their customers, such as individual profile pages, friend lists, discussions, and posting of blogs, videos and podcasts.
Then in March it bought the selected assets of Utah Street Networks, a seven-person San Francisco company that operates Tribe.net, which hosts the online community of the hippie desert festival Burning Man. The best quote about the acquisition goes to Marc Andreessen, who is involved with a social networking start-up called Ning: "The idea that Cisco is going to be a force in social networking is about as plausible as Ning being a force in optical switches," said Andreessen.
With Cisco happy to open its checkbook for all things social networking, some pundits suggested that it should buy Plaxo, though we wondered if business users were still spooked by the security issues.
No. 1: WebEx for $3.2 billion
Cisco's biggest acquisition of the year was also the biggest head scratcher for observers. What would (as one pundit wrote) a rather boring hardware maker want with a sexy Web conferencing service? After shelling out $3.2 billion for WebEx in March, it's still unclear how exactly Cisco will leverage the software company, aside from making its technology part of its unified communications strategy. Last week, Cisco announced that Cisco Senior Vice President Don Proctor, would lead the company's Software Group, which would be charged with creating Cisco's strategy for its network, software, management, unified communications and collaboration technologies. Hopefully the picture will be clearer in the not-too-distant future.
In the meantime, since purchasing a firm for $3.2 billion, all Cisco is seen to be doing at the moment is offering users a 14-day trial period for the Web conferencing software. But it's sure fun to read back at what the pundits said about the acquisition back in March (see the comments here).
What Cisco should have bought, and what it will buy in the future
Just a month after the annoucement of its planned $3.2 billion purchase of WebEx, Cisco's chief shopper, a.k.a. Cisco Vice President Ned Hopper (at the tender age of 39) told BusinessWeek that more acquisitions of the WebEx size would be on its way. While Cisco's acquisitions in previous years were focused on carrier and enterprise networks, now its remit goes broader into the consumer, Web 2.0 and unified communications markets.
2007 was not short of speculation on whether Cisco was in line to buy this that and the other, while other pundits questioned Cisco's decision to buy what it did. Here are some of stories that got people chatting:
What's next on Cisco's shopping list?
With the market still buzzing from Cisco's purchase of WebEx, TheStreet.com mused on what could be next on Cisco's shopping list. Perhaps the Web site named Akamai, for its Web optimization technologies, and J2 Global Communications, which provides Internet faxing and conference calling. Both could fit Cisco's intention to provide unified communications to businesses. Are such acquisitions likely to happen in 2008?
What happened to Qovia?
In March, Maryland newspaper Gazette.net wondered what had happened to local firm, VoIP equipment maker Qovia, which Cisco had been reported to have acquired. Ron Piovesan, a Cisco spokesman was quoted in Gazette.net as saying: "Cisco absolutely did not acquire Qovia. We acquired certain assets of Qovia, but I can't say which ones." But the paper said that Choon Shim, a Quovia co-founder and its former CTO, confirmed Cisco bought the company in January. It's still a mystery as to what exactly happened to Qovia. Its Web site is lacking info (any info) and there is little on Cisco.com about the VoIP firm.
Cisco to marry Yahoo?
A bit of a long shot but John Gartner of the Marketing Shift blog back in May wrote that a tie-up between Cisco and Yahoo, "would be a marriage made in heaven - the companies are Silicon Valley neighbors that complement each other and have very little overlap. Cisco's IP networking expertise combined with Yahoo's reach and content and social networking services would open Cisco up to a world of new customers."
He was responding to another industry fantasy - the acquisition of Yahoo by Microsoft.
Cisco bought the wrong WiMAX maker
Soon after Cisco announced its plan to buy WiMAX vendor Navini Networks, Zack Miller, vice president of investments at Profile Investments blogged that the network giant should instead buy Alvarion. While Navini has 'beamforming' technology, which ThinkEquity Partners believes is particularly attractive to Cisco, Alvarion has the largest installed base of fixed WiMAX deployments and is the only vendor currently shipping mobile WiMAX-ready base stations, wrote Miller.
He added: Miller adds: "CSCO seems to be making a technology bet if they scoop up Navini - a move that will give them a strong, but not dominating presence in WiMAX. I'd rather put my chips on ALVR, and its business and financial operating history, complete with cash on the books, and no debt."
Just Miller trying pump up his ALVR stock, or does he have a point?
What didn't make the list
Here are the other Cisco acquisitions made in 2007 that didn't make our list:
Cisco acquired wireless-management firm Cognio
Cisco agrees to buy BroadWare for video security
Cisco to acquire network processor company
Cisco acquires NeoPath
Cisco buys Reactivity for $135 million to bolster SOA offerings
So you've seen our list of Cisco's top 6 acquisitions, and the type of companies Cisco is likely to buy in the next 12 months. What do you think is in Cisco's sights for 2008, and what's your view as Cisco integrates this year's buys?
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