When yours truly heard the speculation that Cisco might buy Flip Video maker Pure Digital, I began humming to myself that provocative tune by John Oates and Daryl Hall, "I Can't Go For That (No Can Do)."
Why?
Although a Cisco purchase would be a spectacularly successful cash out for Pure Digital's venture capital investor - Michael Moritz of Sequoia Capital (keep in mind that Moritz and Sequoia were also the original venture capital backers of Cisco), it would not be a wise acquisition for Cisco in my opinion. First, how do Cisco's valuable channel partners benefit with Cisco capital and management attention focused on products sold in mass retail outlets for between $130 and $230 and whose success has spawned a large group of copycat competitors?
Second, Cisco's expertise is in developing and supporting complex technology. I fear Cisco risks being "dumbed down" and losing its edge in selling and supporting complex technology, for example, a recent Infonetics enterprise router report shows Cisco gaining market share in SMB routers but losing ground in the high-end router segment to Juniper Networks.
Cisco channel partners have made Cisco the most profitable and successful networking vendor on earth. It's my opinion Cisco capital needs to be singularly invested and Cisco management attention totally focused on improving the success and profitability of Cisco channel partners. Anything less and Cisco risks losing what has made it so successful.
Related story:
Is Cisco's true cost purchasing Pure Digital $747M?
What's your take, am I totally whacked?
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Cisco Buying Flip Video
Hmmmmm, Given the foray into consumers home, I don't think this is too crazy a deal. Anything and everything that can contribute to big files over the web is good for Cisco. If anything, some investment and better networking capabilities vs. a complete purchase
Good Point
Good point!
Perhaps Exxon Mobil should buy all 3 major auto companies, GM, Ford and Chrysler (they would certainly be bargain priced) so that Exxon could manufacture gas-guzzling vehicles to stimulate demand for gasoline production.
Cisco getting into Flip video to generate consumer demand for video which will then generate more revenue for high-end Juniper routers to handle the video loads.
Make cents! Go for it Cisco!
Brad Reese
BradReese.Com Cisco Refurbished
I think you should even
I think you should even bigger... Given how many BILLIONS the Exxon Mobil's and Chevron's of the world have made on a quarterly basis, you shouldn't leave out the airlines, shipping co's, etc. either.
oops... think even bigger.
oops... think even bigger.
I think it makes sense for the LinkSys group
I think it's a sensible acquisition for the consumer focused Linksys group that is a part of Cisco. The Flip doesn't really have any direct connection with Cisco's high end routers, however, consumers who buy a Linksys router or webcam would also be the potential Flip customers. This consumer chain then eventually feeds demand on the Cisco infrastructure side as bandwidth needs increase. Disclaimer, I used to work at PDT, but haven't for a year or so.
Maybe Just Maybe You were right Brad....
Maybe Just Maybe You were right Brad....in retrospect, you may have been very right about Cisco not being 100% loyal to it's Channel Partners ( not just Flip but Cisco also flipped on IBM and HP etc.) but have wrong about Cisco buying Pure Digital. But then, hind sight is 20/20...There is probably a lesson in humility in there for all of us: no one among us is infallible when it comes to foresight :-)
Self-destructive corporate behavior thrives!
Today's economic meltdown is proof that self-destructive corporate behavior thrives!
Actions speak louder than words.
Taking one's channel partners for granted and believing that your success has been solely created by yourself while giving "lip service" to those who made you successful is not uncommon.
Many folks use people on their rise to the top and then discard those same people once they reach the pinnacle, causing history to repeat itself.
And that is why there is so much opportunity in this world:
Self-destructive corporate behavior
Sincerely,
Brad Reese
BradReese.Com Cisco Refurbished
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