Cisco is on a buying spree this month. This morning it announced a $2.9 billion acquisition of mobile networking infrastructure provider Starent Networks, which follows on the heels of another $3 billion acquisition announcement two weeks go for Two weeks ago it announced the $3 billion acquisition of video video-conferencing company Tandberg.
You add $3 billion here and $3 billion there, and pretty soon you are talking about real money.
Cisco has always been a large acquirer, and the fact that it is opening its purse strings again is a good sign for tech M&A overall. But these are relatively large bets for Cisco, which needs to keep at the forefront of networking technologies. The Starent acquisition gives it a strong play in mobile data networks as carriers migrate to 3G and 4G platforms. Broadband is moving to mobile, and Cisco needs to be there.
If this acquisition helps it compete more effectively against the likes of Ericsson and Nokia Siemens, mobile data networks could become one of its fastest growing businesses.
This acquisition was expected. Opportunities in 4G and Smart Grids are enormous and Cisco obviously wants to take advantage of it – http://wp.me/pw0hs-4u
Also Cisco is one company that has done lot of financial re-structuring and raised about $4 Billion recently. Good use of money to position the company well and be ready for the market as we come out of the recession – http://wp.me/pw0hs-2s
This reminds me of Cisco’s Cerent acquisition back in 99. Any relationship between Starent and Cerent possibly?
You might want to look into re-writing part of your first paragraph.
“another $3 billion acquisition announcement two weeks go for Two weeks ago it announced”
This is actually a pretty big deal.
I’m surprised there aren’t more comments. Cisco taking this technology and running with it could mean the beginning of the end of carriers as we know them.
well for one, this isn’t about twitter, facebook or yet another real-time app so I figure the number of people that know about it or are interested are very few
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Fail to understand why you think it is end of carriers. They are in fact ‘the customers’ that Cisco has acquired along with the technology.
I’ll bow to the greater knowledge, Tushneem, because clearly you’re much more informed than I am on this topic. Is it possible that this technology could be rolled out by companies that might only offer mobile broadband, no voice, and no contract requirements? The decoupling of the service from the device… finally. Why would anyone bother to make a voice call, for example, if you can just do VOIP with your mobile?
There is a lot more to a service provider network than what starent has to offer. You need to own frequency bands, need to have a network of base-stations that cover a region and need to operate the network that has multi vendor equipment and more. There is a basic paradigm difference in what Cisco does and what a service provider does. Cisco make equipment for them.
Cisco is interested because the Packet Core is now becoming a hot market. Since service providers need to find new ways to monetize and the only way to do that is to have a intelligent gateway that can help you implement services. It will be easy for Cisco to put starent’s solution in with the rest of their equipment.
@Mike, with 4G the entire network will be IP based and packet switched, so even your normal call that you make today will be VOIP. Cisco, Starent and several other companies provide infrastructure to the carriers. The carriers in turn determine how services should be provided and whether they should be coupled with devices or not. You can read more about these on my blog – http://wp.me/pw0hs-78
@VW – Thank you very much for the clarification. Of course, it makes perfect sense.
@Tushneem – Your blog is full of great info, thanks for pointing it out. Will be looking into it more closely.
So, OK, my crazy ideas about carrier independence may be unfounded; but this story is still a very big deal, I say.