Archive for August 2011

This was a good acquisition for Cisco on a number of fronts.

I read Eric’s blog on the acquisition of Versly and he debates on whether this was a good acquisition for Cisco or not. I’d like to weigh in with my thoughts. In case you didn’t read Eric’s blog (and you should), Versly is a small start up based in San Francisco that focuses on allowing users to collaborate at the document level using Microsoft Office applications. From what I understand, Versly is very small, only about 10 people in total so the risk here to Cisco is marginal. It’s akin to the first-place Red Sox (and this year’s World Series champs) trading for Eric Bedard. There’s a high amount of upside possible with very little downside risk.

In my opinion, this was a good acquisition for Cisco on a number of fronts. Make no mistake–the acquisition was as much about talent as it is about the product itself. During the latest analyst roundtable with CEO Chambers, he specifically pointed out that the company wanted to bring in more high level application talent; Versly is loaded with it. Versly has talent from BEA, Weblogic, Sun and others including one of the original Java team members. No offense to Cisco, but the company isn’t exactly brimming with application talent, so the Versly team will be a welcome addition into Cisco. I certainly don’t think this is the only acquisition Cisco will be making in the application space, but it’s a good start.

Companies like Cisco could use the cash for acquisitions and job-creation.

Every quarter following Cisco’s earnings call, the company hosts a roundtable with John Chambers and a handful of industry analysts. I’ve been lucky to attend these over the past few years and last week we had our latest roundtable. As expected, much of the focus of this roundtable was on Cisco’s current issues and how the company works its way out of the malaise it has found itself in for the past couple of years, and that led us to the discussion of the repatriation holiday and the implications of whether or not it passes.

For those who aren’t clear as to what a repatriation holiday is, it’s an event where US companies are given the opportunity to bring money earned overseas back to the US at a tax rate of 5-6% instead of the current top rate for businesses of 35%. The theory being that companies could invest the money domestically, by hiring more people, investing in research and development or acquiring companies. Without the tax holiday, US corporations can only use the money to invest outside the US.

Bold move for Adtran, now it’s time to go execute.

On Tuesday, Adtran announced that it has acquired privately held Bluesocket. Bluesocket is one of many wireless LAN solution providers that offer a solution that is an alternative to the traditional controller based products. Bluesocket’s solution uses VMWare to virtualize the controller functionality. This allows Bluesocket to create a completely virtualized control plane for managing the WiFi infrastructure. This means greater flexibility for IT as to how and where to deploy the controllers, which optimizes for both performance and cost.

Bluesocket is trying to capitalize on the current shift going on in the IT marketplace of raising the bar on wireless LAN, where it becomes a company’s primary network instead of augmentating the wired network. Wireless LAN has gone through several evolutionary changes before–from autonomous access points to controller based solutions to where we are now, which is a controller-based solution with independent control and data planes. This type of solution has been great for building out wireless networks that act as an augmentation to the current wired network.

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