Cisco curbs acquisition strategy

Cisco curbs acquisition strategy

Cisco Systems, which had been one of the most acquisitive vendors in the IT industry, now says it plans to scale back and be more discriminatory when purchasing other networking companies due to the depressed economy.

Speaking at Gartner's Networking Beyond the Enterprise conference taking place in San Francisco this week, Mike Volpi, who as chief strategy officer was responsible for Cisco's 23 acquisitions last year, said the networking giant will be more focused with its purchases. "Instead of making 50 bets, we're honing down into key markets and getting out of some others," he said, adding that the company would announce "a small number" of purchases this year.

Following its recent disappointing financial results, Cisco said it plans to defocus on certain products, such as ATM access concentrators, optical cross-connect tools and service provider unified messaging systems. As part of this strategy, Cisco on Monday announced it had sold its broadband access concentrator business, which it inherited through its acquisition of Tdsoft Communications Ltd. last year.

Instead, Volpi said Cisco would buy companies that make products in its targeted markets, which include voice-over-IP, storage, high-end routing, IP and metropolitan area networking. Volpi also indicated that Cisco would consider purchasing more mature companies.

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