Cisco is one of the most acquisitive companies in tech.Over the last 20 years, Cisco has bought more than 140 companies. In the 1990s, most of these purchases were in Cisco’s traditional business: networking, routing, and switching.
But in the last decade, the company began to branch out into “adjacent” areas like consumer video, cable TV set top boxes, and business collaboration.
Now, as the company has reported two disappointing quarters in a row, CEO John Chambers may be pulling back on some of these businesses. Yesterday, the company announced it was cancelling some consumer products, including the Flip cam, which it gained as part of its $590 acquisition of Pure Networks only two years ago.
A trip through Cisco’s 10 biggest acquisitions of the last decade suggests the Flip may not be the only victim when the refocusing is done.
Cisco bought this company for $450 million in stock in January 2005. It made products that helped businesses set up secure wireless networks, and fit into Cisco's core networking and switching business. It also hurt competitors like Nortel and Alcatel, who previously had deals with the company.
This 2003 buy marked the beginning of Cisco's foray into the consumer market. Linksys is still the leading maker of home networking gear.
Cisco shut down the Flip product line yesterday. This acquisition was way outside Cisco's traditional core, but the idea was to encourage consumers to upload lots of video to the Internet, which would eventually require service providers and Web companies to upgrade their infrastructure.
Cisco first invested in this company in 2006, then purchased the remaining stake in 2008. It provides high-end networking gear for corporate data centres -- a reasonable fit for Cisco's core business.
Cisco bought this company in 2007 and integrated the technology into a set of appliances for small businesses, who put them at the edge of their networks to catch spam and malware before it gets to users' computers.
This one was a pretty clear fit into Cisco's business.
Starent provides technology for mobile phone carriers like Vodafone to deliver data over their networks. Cisco bought the company in 2009 for a 20% premium.
Cisco vaulted into the business collaboration space with this acquisition of the leading video conferencing provider. Since then, Cisco has expanded its WebEx line to offer services such as hosted email. It's a bit of a stretch for a company that specialises in networking, but the reasoning is that video eats up a lot of bandwidth -- and thus will drive infrastructure build outs.
Cisco's biggest acquisition of all time made set top boxes and other gear for cable TV companies. This business is slowing down: last quarter, Cisco said that shipments of TV set top boxes 'continued to be challenged' with sales down 15% from the previous year, to a run rate of about $1.6 billion.