The Web Conferencing Blog

More Cisco Acquisitions...

In a few recent posts, I mentioned that John Chambers and the management team would be aggressively pursuing companies to acquire. Since March, when Cisco acquired the consumer-based HD video provider Pure Digital Technologies, Cisco has locked in on 5 additional companies.

• November 2009: Set-Top Box Business of DVN Holdings. DVN markets digital cable solutions in China. This expands Cisco's "Cable" portfolio.
• October 2009: ScanSafe, a SaaS web security provider, compliments Cisco's on-premise content security solution via the IronPort acquisition in 2007. With the ScanSafe aquisition, Cisco has a cloud-based and on-premise-based security solution for customers.
• October 2009: Starent Networks, a provider of IP-based mobile infrastructure solutions and fits nicely into Cisco's focus on Mobility and Mobile Internet via IP-enabled smartphones and other mobile devices.
• October 2009: Tandberg, a major player in the video conferencing space. Tandberg will fall into the Cisco Collaboration Suite which already includes solutions like WebEx, Telepresence, and WebEx Connect. (Subject to close)
• April 2009: Tidal Software, a provider of application management and application performance. Tidal Software will help Cisco and its data center strategy.

We'll have to wait and see how many other companies are acquired in the next few months. I have a feeling it will be at least 5 more companies!

The power of having $35B cash in the bank.

Polycom an Option for Cisco?

As I previously mentioned, if the Cisco/Tandberg deal does not go through, Polycom could be a viable option...in my personal opinion.

According to "Videoconfernecing By the Numbers," by Wainhouse Research (Analysts: Andrew Davis and Ira Weinstein), Polycom ranks as the global leader for total installed group systems as of July 2009, representing 41% market share. (Tandberg has 26% market share.) For the first half of the year, Polycom is the leader with a 35% market share for shipped units. (Tandberg represents 35% market share across the same time period.)

Group systems is defined as all video conferencing systems, HD video conferencing, telepresence and does not include video phones and PC software solutions.

As stated in the report, "Although heavily impacted and exhibiting an annual revenue growth rate very diminished from its 2006-2007 high, the videoconferencing market appears to be weathering the economic storm reasonably well, and is better positioned than many other industries to prosper in a cost-cutting, carbon-emission-cutting environment."

Copy of the Report: Download Wainhouse Research VC by the Numbers

Some Tandberg Shareholders Reject Cisco Offer

Tandberg shareholders have rejected Cisco's $3B offer to buy the video conferencing company. It appears the shareholders are looking for a higher bid from Cisco or from another company as they strongly believe that the company can continue to operate and generate revenue as an independent company.

If the Cisco/Tandberg acqusition does not happen, I suppose Polycom could be another company Cisco looks into though Cisco is really interested in Tandberg because of the company's success in the SMB and mid-market space. (Cisco Telepresence products are better suited for large enterprises.)

Tandberg recently announed their Telepresence T1, designed for smaller companies and a target market for Cisco Telepresence.

As I have said multiple times, Video is a top initiative for John Chambers simply because Video is part of the $34B collaboration technology market that Cisco is going after.

Tandberg or Polycom? Some would say a coin toss, I lean towards Tandberg.

Cisco Plans to Buy Starent

John Chambers and the Cisco team is always on the hunt for high-value companies to acquire, especially in these economic times where companies can be bought at a significant discount.

On the heels of Cisco planning to acquire Tandberg, a leading provider of video teleconferencing solutions, Cisco just announced plans to acquire Starent Networks for $2.9B. (This equates to $35 per Starent share, a 21% premium to Monday's trading price.)

Starent is a maker of advanced wireless equipment and its product line will add to Cisco's continued efforts of expanding next-generation networks.

Best Global Brands

Cisco ranked #14 in a "Best Global Brands" survey conducted by Interbrand and BusinessWeek.

In the survey a brand must derive at least 1/3 of its earnings from outside its home country, be recognizable beyond its base of customers, and have publically available marketing and financial data. (These criteria eliminated most telecoms and private companies.)

2009 Top 10 Rankings:

1. Coca-Cola
2. IBM
3. Microsoft
4. Nokia
5. McDonald's
6. Google
7. Toyota
8. Intel
9. Disney

Other notable high tech companies:

• 11 HP
• 19 Samsung
• 20 Apple
• 24 Oracle
• 27 SAP
• 35 Dell

Cisco ranked # 17 in last year's survey.