Cisco is taking a huge diversion from it's core business, which is to sell gear. The fact is Cisco's products aimed at the SMB market basically suck, and they have huge exposure here. The products are expensive, and even more costly and cumbersome to implement and manage. Growth in the large enterprise LAN infrastructure market, that has been Cisco's bread and butter is not expanding as rapidly anymore and Cisco has been searching for a way to tap the fast-growing SMB market... that much is true.

Typically Cisco makes acquisitions to broaden or strengthen is product portfolio - basically to sell more gear. Even if you look at Scientific Atlanta and Linksys, some thought they were questionable moves but in the end it is just really about Cisco expanding into different markets (cable and consumer, respectively) to sell more gear.

Cisco buying WebEx, a web-based collaboration service provider, is clearly a move to tap the SMB market. However, I think it is a huge diversion from their core competency and therefore I question it. It may operate as a separate company and stand on it's own but why own it? In my mind Cisco would have been better off to throw those resources at strengthening it's technology partnerships with Webex, every other ASP, and their current partners by building hooks and more integration into Cisco products. To me this is a stab in the dark at the SMB market. Following this strategy, next they'll start gobbling up Salesforce.com and every other successful ASP.

I think Cisco should have stuck with their time-tested strategy of partnering. AT&T and every other Cisco partner is salivating over the SMB market also - there are already a host of companies and service offerings catering to it. Why not just work with all of those companies to further integrate their SMB service offerings with Cisco products? Buying Webex pits Cisco directly against some of it's largest partners. Another reason why this makes absolutely no sense. Also, what happens when all of these SMBs eventually grow and mature into larger companies? Is Cisco then going to attempt to migrate them off of their hosted solution and onto a CPE-based solution? I'm trying hard to udnerstand the benefits to Cisco but I'm just not getting it, but I'm also not a Sr VP of Business Development at Cisco Systems...