Cisco Acquires Linksys

[David Farber <farber () tmail com>]

-----Original Message-----
From: David Geerinck <geerinck () att net>
To: dave () farber net
Subject: Cisco Acquires Linksys
Date: Thu, 20 Mar 2003 11:09:12 -0500

Dave - For IP if like... I find Glenn Fleishman's assessments both 
useful and insightful.

David

----------------------------------------------------

> >  From Glenn Fleishman, see http://glennf.com <<

*Cisco acquires Linksys for $500M [1]*: This acquisition is a clear win 
for
Cisco, which can sell up and down the horizontal chain to consumers 
(which
they've never really sold to directly, only through partners like DSL
providers), small businesses, and their traditional enterprise market.

[1] <http://www.internetnews.com/infra/article.php/10796_2119751>

Cisco's closest competitor in the enterprise wireless LAN/home Wi-Fi 
space
has really been Proxim: Proxim can compete on features and the kind of
customers, but not the installed base. Proxim, through mergers and 
product
acquisition, has the largest consumer base outside of Linksys, but it 
also
can serve enteprises through several products in WLAN area, and, because 
of
their merger with Western Multiplex, has a rich portfolio of 
point-to-point
systems, including gigabit point-to-point.

Even with the tech downturn and Cisco's remarkable write-off two years 
ago,
the company has a market cap of $100 billion [2]. Cisco has a varied
portfolio, however. Proxim, focused on wireless now, has a market cap 
of
just $91 million [3]. That's not a misprint. It's clear in hindisight 
that
Cisco would have been choosing between Linksys and Proxim, and chose
Linksys.

[2] <http://biz.yahoo.com/p/c/csco.html>
[3] <http://biz.yahoo.com/p/p/prox.html>

In discussions with many in the industry in the last year, it was clear 
that
the coming WPA (Wi-Fi Protected Access) and 802.11i, which would put 
certain
enterprise-style network authentication features into every Wi-Fi 
access
point, meant that simultaneously, every AP is now ready for the 
enterprise,
even in a small way. Several WPA or 802.11i-compliant Linksys AP for 
$100
could provide much of the functionality needed by a business with 50 to 
500
employees with an IT department that knew how to run an 802.1x system 
with
their RADIUS server.

Cisco has a history of dealing well with its acquisitions: Linksys 
won't
suddenly raise prices, cut quality, or shift its focus. Instead, we'll 
see
more of a product line from bottom to top, and, as I said in a 
previous
day's postings, the attitude still prevails that nobody was ever fired 
for
buying a Cisco.

--
----------------------------------------------------------------------
Glenn Fleishman, Unsolicited Pundit: read my work at http://glennf.com
check out my new book, The Wireless Networking Starter Kit, a guide to
Wi-Fi at home, office, and roaming : <http://wireless-starter-kit.com>
freelance reporter for The New York Times, Macworld, InfoWorld, et al.
read all the wireless networking news at <http://wi-fi.weblogger.com/>
Macintosh columnist, The Seattle Times  http://seattletimes.com/ptech/
-- Dave

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