Cisco, Linksys buy: Don’t count on cheaper gear

Cisco’s decision to buy home networker Linksys seems to be an attempt to promote demand for broadband technologies such as cable modems and DSL.

If demand actually grows significantly, the theory goes, then service providers will want to buy more high-end Cisco gear to meet this demand.

What this also means is that very low-end firewall/VPN gear now falls under Cisco’s remit. Linksys is a familiar name to anyone who spends time at Circuit City or any of the other computer superstores because it makes a range of inexpensive networking gear for home and small business offices. For example, it sells a four-port switch that includes a firewall and VPN support for about $80 retail.

Wouldn’t it be nice if the acquisition would result in similar prices for devices that could be managed centrally, with policies being created for groups of users and updates being pushed on the machines automatically? Sure it would, but don’t count on it.

Cisco says its plan for Linksys is to leave it alone, let it keep running the way it has been without using the well-honed Cisco process for integrating its acquisitions into the mother ship. Linksys is doing very well in the SOHO/home networking arena, and Cisco seems satisfied to let it continue on its own path and reap the benefits. Cisco projects the SOHO/home networking market to grow worldwide from $3.7 billion in 2002 to $7.5 billion in 2006.

Linksys president and CEO Victor Tsao offered this remark about Cisco making its intellectual property available to Linksys: “We should be able to use some of Cisco’s technology selectively later on for future products.”

But don’t get your hopes up and interpret that to mean an integrated Cisco-Linksys line.