Back in 1993, John Chambers was negotiating with Boeing on a $10 million router deal. Boeing made it clear to Chambers, there would be no purchase order unless Cisco cooperated with Mario Mazzola's Crescendo Communications.
The result, Cisco acquired Crescendo for Cisco stock then worth $94.5 million. Wall Street was in disbelief that Cisco spent so much to acquire only $10 million in annual revenue, Cisco's stock took a dip for the first time.
3 years later, Mazzola's team was producing more than $500 million in annual revenue.
Crescendo was Cisco's first acquisition and from which a legendary rule emerged becoming famously ingrained into the Cisco corporate culture:
The Mario RuleBefore any employee of a newly acquired company is terminated, both CEOs must give their consent.
Mario Mazzola's protégé at Crescendo, Jayshree Ulla, Cisco senior vice president, datacenter switching and security technology group (DSSTG), had this to say about Cisco's recent acquisition of NeoPath Networks:
"Enterprise customers are asking Cisco how they can make better use of their existing IT infrastructure, and NeoPath is part of the answer."
"NeoPath's technology will enhance Cisco's Services Oriented Network Architecture (SONA) direction and vision by establishing tighter linkages between file based data and network accelerated services."
Fast-forward a mere 17 days, Vijay Sagar, Cisco product manager with the datacenter switching and security technology group (DSSTG), becomes the go-to guy for NeoPath customers in a panic regarding the Cisco announcement:
In connection with Cisco Systems acquisition of NeoPath Networks, we are announcing the immediate end-of-sale (EOS) of NeoPath File Director 220, Director 7200 and Fileyzer product families, support contracts, and professional services.
Jerome Wendt, lead analyst and president of Omaha, Nebraska based Datacenter Infrastructure Group Inc., provided a unique perspective on the NeoPath Networks acquisition.
So I called Jerome to ask about precedents for Cisco to immediately announce end-of-sale on products upon consummation of an acquisition.
There were no precedents leading Jerome to believe Cisco has left something out of the story.
Meanwhile, Chris Lynch, president and CEO of Acopia Networks, is offering a limited-time promotion (June 30th, 2007), that offers customers up to a 100% product allowance when they trade-in NeoPath Networks File Director products towards the purchase of Acopia ARX systems.
To make things even more convoluted, Lynch was previously Cisco's vice president of worldwide content delivery networking sales.
Has the departure of Cisco's acquisition guru, Mike Volpi, weakened Cisco's acquisition prowess?
Will Cisco's legendary Mario rule be reaching end-of-sale status too?
Is Cisco having such a good run lately that arrogance has begun creeping back into Cisco's culture, pre the dot com bubble burst?
Brad Reese is research manager at BradReese.Com, advancing the careers of 600,000-plus certified individuals in the growing Cisco Career Certification Program.
