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Open question to you all.
My feeling is that this breaks down into two threads - Carrier and Manufacturer.
Don't know much about carrier acquisitions, so I'll only comment on manufacturers.
I'm having a hard time recalling a successful acquisition. I certainly haven't experienced any from the inside (in nearly 20 years of working in this business).
Cisco is generally cited as having the best ROI for acquisitions. But I'd like to challenge this opinion by choosing what I think are the three most successful moves Cisco has made in this area.
Early 90s: Kalpana (10/94, $240M)) and Crescendo (9/93, $89M). These two acquisitions catapulted Cisco into the LAN switch market, created what became the Catalyst product family, and eventually led to the majority of Cisco revenues coming from switches, not routers. There's no doubting that these acquisitions were vastly cash-positive for Cisco.
But was it better to acquire than to develop internally? As I remember Crescendo was an FDDI switch, a small part of the total LAN switch market back then, and would be out-paced by Fast Ethernet as a backbone technology. My guess is that Cisco could have developed a multi-purpose, FDDI/Fast Ethernet switch internally, and with an IOS that looked the same as its routers. Catalyst IOS still looks different ten years later!
Ditto for Kalpana. A good switch, and the market leader at the time. But the Kalpana was a cut-through Ethernet switch, a design that dows not lend itself to speed changes. Since Fast Ethernet was just about to hit the market big time, was this the right architecture to use? Could Cisco have developed a better 10/100 switch internally, in not much more time than was needed to complete these acquisitions?
Maybe not. Synoptics (acquired by Wellfleet in 1994) proved that it's possible to get an Ethernet switch design wrong more than once. Maybe it was better for Cisco to take on a sub-optimal, but working product, than to shoot for perfection with the risk of missing entirely?
End of the 90s: Cerent (8/99, $7B). Acquired at the height of the bubble. Cisco are unlikely to recover the acquisition cost of Cerent in revenues, never mind profits. But here we can argue that the acquisition was "strategic" - launching Cisco into the carrier space (just as this market was about to plunge into recession, of course).
Clearly the Cerent platform hit the sweetspot in DS-3 interconnect market. But would Cisco have been better off developing a more general purpose optical switch in-house? In hindsight we can categorically answer no, because a market would not have appeared for such a product for several years. but in that case we'd have to conclude that the Cerent acquisition was also a bad move, wouldn't we?
And remember, these are the best examples of acquisitions I can come up with. I'd be very interested to hear opinions on this topic.