Most of Cisco's current product suite came via acquisitions[0]. The difference with Meraki, compared to the typical Cisco acquisition, is how independently they were allowed to operate. WebEx was a similar story. Cisco would tell you that acquisition is a core competency of theirs[1], but having worked there for 8 years (including during the WebEx and Meraki acquisitions,) I'd say their track record is far more spotty. A few successes like Meraki, a bunch of mediocre examples and a few really bad ones, like Scientific Atlanta.
0 - Even switching originally came to Cisco via a whole series of acquisitions in the 90s. You could argue -- and Stanford certainly did -- that routing was an acquisition of sorts, as well.
1 - Their M&A guy even wrote a book about it, called Doing Both, which purported to explain how Cisco achieved so many of their goals by refusing to make false "either/or" decisions. Ironically, almost every example in the book was something that Cisco is spectacularly bad at.
I sat in on the all Cisco acquisitions teams from c. 1994 - 1999. Even during that heyday there were awesome acquisitions that took off and others that went nowhere. Cisco was historically always better at hardware acquisitions than pure-play software. It would often kill the software products entirely — Internet Junction, TGV, Precept come to mind.
The one other rule that John Chambers lived by was "no merger of equals." It was always about a big fish swallowing a smaller one. Cisco's market cap is an order of magnitude greater than Splunk's, but this is as close to breaking that Chambers Rule of Acquisitions as anything they've done to date.
Here's the full history of Cisco acquisitions. Maybe someone with more M&A lore would scorecard it to see which were dreams and which were duds.
I think they had better success integrating hardware companies, but SA — which was pretty much a hardware company — was a pretty big counter-example. I’d also argue the further they strayed from their core market, the worse the results. See also: Flip and Linksys.
I worked for NDS when they were acquired by Cisco. They've spat them back out a few years ago. Not entirely sure Cisco should have got into the video space.
I enjoyed Cisco (great 4th July parties!) but it never felt like we were properly integrated.
Based on my experience in (mostly) software companies, hardware just seems more likely to work. The people building it are formally trained, the government forces a minimum amount of safety testing, and a design mistake could cost millions to fix, besides the reputational damage. Software is more like getting retail workers to build a remote controlled forklift out of junkyard parts.
Scientific Atlanta… there’s a name I haven’t heard in a long time. Didn’t they use to make crappy cable boxes, back when cable TV meant a box that connected to the antenna input via coax.
SA made set top boxes along with a bunch of back-end infrastructure to make them work. It was an acquisition that made sense on paper -- Cisco did (does) a lot of business with service providers, they make cable modem termination systems (the headend devices that handle cable modem connectivity,) had dabbled in IP video, so it was a natural evolution to make and sell the rest of the gear you'd need to operate a cable-based service provider. I don't think they were counting on how rapidly Internet streaming would take over, but in any case, the acquisition didn't work out so well and last I heard they had divested it.
One other thing that I think feeds into these acquisition mishaps is that Cisco has, in my opinion, consistently over-estimated how much intelligence would be needed (or wanted) in the core network. In their view, intelligent network services = expensive network devices = revenue for Cisco. I think what the Internet specifically and IP in general, as well as the evolution of LAN technologies over time have proven is that when it comes to the core network, simple is almost always better and intelligence should move to the edge, where innovation can happen quicker and where services can be implemented in software.
As an example, at one point they had what was, essentially, a middleware system (like Websphere,) which they called Application Oriented Networking. The idea was you would deploy these on your network gear, throughout your network, and it would provide message routing and translation services. They had a whole "architecture" built for it, called Services Oriented Network Architecture[0]. I don't think the people who built it really understood that it provided no real advantage over a cluster of middleware/ESB/MQ servers in a data center and that nobody was going to pay a huge premium to build that capability in their IP routers.
> I don't think they were counting on how rapidly Internet streaming would take over
Ironically, those set top makers were in a perfect position to take advantage of it. They could have been Roku - they already had huge market penetration.
Sure, but those set top box manufacturers were beholden to the cable ISPs for their revenue, cable ISPs which would have been furious if a supplier started competing with them. The STB companies also, as a general rule, were really bad at UX -- there's a reason why the interface on those things was universally bad, and it's that the cable companies were the customer of the STB maker, not the end consumer. SA and the rest of them just didn't have consumer UX expertise as a real competency and didn't need to have it.
I was thinking way earlier than that. My grandparents had a Scientific Atlanta box connected to their giant piece-of-furtniture Hughs and Mathis TV. This was late 80s, early 90s, long before digital TV, or cable having more than 30 or 40 channels.
Yep. I worked at SA from the mid-90's through the mid '10's. They left the satellite business and focused (mostly) on cable systems. Was a lot of fun as digital settops rolled out, then DVR, then HDTV. As others have noted, the Cisco acquisition in 2006 did not, uh, work out too well. I believe Cisco had visions of video control "in the network", but that was never going to work for extant cable systems, and we couldn't get an IPTV solution going for lots of reasons. Loved my time at SA but it was oil and water with Cisco.
I worked at Scientific Atlanta in the 90s, designing stealth radar systems. Some very cool tech they developed. They also did a lot of satellite comms. And a lot of telecom tech.
I spend most of my day managing Meraki networks and some of that is seriously powerful and innovative.