Glowing talk of staying on for another 3-5 years and loving to compete; but no mention of biggest disappointment
There’s an interesting series of CNN video interviews with Cisco CEO John Chambers on how Cisco is not focused on competitors but nonetheless loves to compete; how the management structure of boards and councils is helping the company succeed and jump on market transitions; and how Chambers plans to stay on for another three to five years to see through Cisco’s 30 or so market adjacency incursions.
In the interviews, Chambers mentions that 90% of mergers and acquisition fail but also how Cisco has succeeded in 70% of its 135 acquisitions. The interviewer, however – CNN’s Poppy Harlow – does not challenge him on how the first of Cisco’s largest ever acquisitions (Scientific-Atlanta was the second) has failed to bring it the market leadership and billions in revenue it covets. The $7 billion purchase of optical transport vendor Cerent in 1999 has largely been a flop – Cerent management and those proficient in optical transport fled Cisco in the early 2000s, and the business has been in decline ever since.
Chambers tells Harlow how Cisco is No. 1 or 2 in dozens of markets that are all inter-related. Yet he and Harlow conveniently gloss over optical, in which Cisco is the No. 9 vendor with less the $500 million in year-to-date 2009 revenue, according to Dell’Oro Group. And talk about inter-relation: optics are the high-speed transport infrastructure for the intelligence of IP.
So in all the happy talk about being successful with 70% of its 135 acquisitions and jumping on market transitions, no one asks about or mentions Cisco’s largest acquisition. It’s a glaring omission that begs the question: where is it and where is it going?
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