Inside Cisco: The Real Story of Sustained M&A Growth

Features

• Cover Type: Hard Cover with 288 pages
• Published by: Wiley
• Edition: 1st Edition September 14, 2001
• Written in: English
• ISBN 10 Number: 0471414255
• ISBN 13 Number: 978-0471414254
• Book Dimensions: 9.1 x 6.1 x 1.1 inches
• Weighs: 1.4 pounds

Product Review
No matter what happens in the future with the tech sector in general or to Cisco Systems in particular, the company that made the router almost a household name will be known forever as a bellwether behemoth in the networking industry--and one who got that way largely through a shrewd acquisition strategy. Inside Cisco, by veteran Silicon Valley entrepreneur Ed Paulson, looks at how the company nimbly absorbed seventy firms since 1993 and, at least until the postmillennial tech crash, managed to leverage the people and technology it added into impressive, continual advancement. "In fact," Paulson writes, "the company has been so successful with its acquisitions that the industry created a new term for Cisco's type of research and development approach: acquisition and development." With an eye toward making this agile, adaptive strategy accessible to others, Paulson analyzes the practice and rationale behind it and then assesses how portable its elements are to other companies and industries. Explorations of everything from due diligence to the integration of personnel, products, and production are supplemented by specific examples, comments from people directly involved, and Paulson's own experienced perspective. --Howard Rothman

From Publishers Weekly
Once the gold-plated standard for how to succeed on the Internet, Cisco Systems has since lost some of its luster. But even though the company's stock price has dropped, Paulson (The Technology M&A Guidebook) makes a convincing case for still using Cisco as a model for how other companies can manage their M&A (merger and acquisition) growth. For one, Cisco buys companies not just when it is trying to expand or protect itself against potential competitors, but rather "as an integral part of its system," thus looking ahead for future growth. Indeed, Cisco's acquisitions have been prolific, and the author explains who the company targets for acquisitions and why. Unlike many acquirers, Cisco tries to retain most of the personnel during an acquisition, and Paulson shows how that makes good sense. According to Cisco CEO John Chambers, "If you pay $500,000 to $2 million per human being and you lose thirty to forty percent of those people in the first two years, you've made a terrible decision." Paulson shows most of Cisco's major acquisitions and the buying price per employee, which is appropriate for a book on M&A's, of course, but he is too meandering to offer specific, helpful information. Those interested in refining their company's M&A strategies will not find too much here to help them; Paulson makes a great case why Cisco is good at what it does, but aphorisms like "[Cisco] listens closely to its customers" are less than effective. Such lines suggest that the book is targeted more at a general business audience, but how many of those readers actually need advice on how to buy companies?

Copyright 2001 Cahners Business Information, Inc.

Reader Reviews
I don't 'get' why so many people think so highly of this book. I was one of the M&A folks at Cisco, doing mostly A. It wasn't so structured, nor so successful, nor so wonderful. We just did the best we can -- each deal is different. Nice to have the name, the money, market share, etc. Made it much easier to get an acceptable deal. If I were on the other side of the table, life would have been less nice. The author's uncritical look at the Cisco way makes me suspect that (a) he just didn't know or (b) he was paid off.