When we began the mergers-and-acquisitions journey at Cisco in 1993, we had no idea what we were getting into. It was clear that there was a new category of products called “switches” that was threatening our leadership position in routing at the time. Our engineering team felt that they could build a better switching product based on Cisco’s existing technology foundation. But the venture community had funded a number of switching companies that were months if not years ahead of Cisco in the race to market. Instead of developing our own technology, we decided to buy Crescendo Communications, which turned out to be a huge success. The descendants of that Crescendo product line provide Cisco with in excess of $10 billion in revenue and rich profits today.
The truth is, we got a bit lucky. Historical data shows that the majority of acquisitions fail. The Crescendo acquisition didn’t, and we were encouraged, so we set ourselves on a path that eventually lead to 75 acquisitions over the next seven years. At its peak, these acquisitions collectively represented 50 percent of Cisco’s revenue. Along the way, we made a lot of mistakes and learned a lot of important lessons, but we were also fortunate to be held as one of the role models of tech M&A.
To read the full, original article click on this link: Six Key Principles of a Successful Acquisition Strategy, Part 1: Tech News and Analysis «
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