Mastering M&A, The Cisco Way
A very old but gold blog post. Much has changed in the world since then but the efficiency of Cisco’s M&A and investment process continues to shine. Very proud of what Cisco has accomplished, and moving forward this expertise would be very useful.
How has Cisco succeeded where so many others have failed? Simply put, experts say, it has professionalized a process that other companies turn to only on occasion–usually out of either greed or necessity. “My experience with most companies is that they do acquisitions infrequently and integration is somebody’s nighttime job,” says Brett Galloway, the former CEO of Airespace, a wireless networking company Cisco acquired last year. “Cisco has people who do this full time–it’s a core function of the company.”
As successful as Cisco has been in identifying hot new technologies and taking calculated risks in new markets, experts say, the true strength of its mergers-and-acquisitions operation lies elsewhere. Indeed, if there is a secret to Cisco’s success, it is this: Cisco has come to realize that the acquisition of technology really isn’t just about technology. “For us,” says Hooper, “the people are the most strategic asset.” If, after the acquisition, Cisco loses the technologists and product managers who created, say, the Linksys router, then it has lost the second and third generations of the product that existed only in those employees’ heads. That, says Hooper, is where the billion-dollar markets lie. And that is where Cisco’s acquisitions are aimed. “We need the expertise,” he says. “We need the people.”
SAN JOSE, CALIF.–Ned Hooper uses one word to describe corporate acquisition. “It’s traumatic–always,” says the vice president of business development at Cisco Systems, whose former company was acquired by the tech giant in 1998. “No matter how successful you’ve been and how much you make on the deal,” he says, “it’s traumatic because there’s change coming.”