Inside Cisco (eBook)

ED PAULSON is the President of Technology and Communications, Inc.He is a ten-year Silicon Valley start-up veteran who previouslyworked with several executives instrumental to Cisco Systems'sincredible success story. He is the author of over ten business andtechnology books, his most recent being The Technology M&AGuidebook (Wiley). Currently a Visiting Professor of Business atDePaul University in Naperville, Illinois, his professionalbackground spans over twenty years as a business manager, engineer,and entrepreneur in both Silicon Valley and Austin, Texas. He canbe reached at www.edpaulson.com.

INTRODUCTION.

1. SO WHAT'S THE BIG DEAL?

2. BUYING THE CISCO WAY.

3. THE COMPANY THAT SANDY, LEN, DON, JOHN, AND JOHN BUILT.

4. VISION COMPATIBILITY MUST EXIST.

5. WIN IN THE SHORT TERM

6. GOOD VIBRATIONS.

7. MAKE IT A LONG-TERM WIN, TOO.

8. CLOSER IS BETTER.

9. NO MERGER OF EQUALS.

10. TARGET PRACTICE.

11. THE CISCO DUE DILIGENCE "SNIFF TEST".

12. PERSONNEL INTEGRATION À LA CISCO-BAM!.

13. INTEGRATING PRODUCTS AND PRODUCTION.

14. SETTING THE PURCHASE PRICE .

15. CAN YOU REALLY GROW THROUGH ACQUISITION?

16. SO HOW GOOD REALLY IS THE CISCO A&D APPROACH?

Appendix A: DUE DILIGENCE STARTING CHECKLIST.

Appendix B: VARIOUS COMPANY BUYER TYPES AND THEIRMOTIVATIONS.

Appendix C: TYPICAL MOTIVATIONS FOR BUYING A COMPANY.

Appendix D: SUMMARY OF CISCO'S ACQUISITIONS.

NOTES.

INDEX.

Once the gold-plated standard for how to succeed on the Internet,Cisco systems has since lost some of its luster. But even thoughthe company's stock price has dropped, Paulson (The TechnologyM&A Guidebook) makes a convincing case for still using Cisco asa model for how other companies can manage their M&A (mergerand acquisition) growth. For one, Cisco buys companies not justwhen it is trying to expand or protect itself against potentialcustomers, but rather "as an integral part of its system," thuslooking ahead for future growth. Indeed, Cisco's acquisition havebeen prolific, and the author explains who the company targets foracquisitions and why. Unlike many acquirers, Cisco tries to retainmost of the personnel during an acquisition, and Paulson shows howthat makes good sense. According to Cisco CEO John Chambers, "Ifyou pay $500,00 to $2 million per person--and you lose 30 to 40percent of those people in the first two years, you've made aterrible decision." Paulson shows most of Cisco's majoracquisitions and the buying price per employee, which appropriatefor a book on M&A's, of course, but he is too meandering tooffer specific, helpful information. Those interested in refiningtheir company's M&A strategies won't find too much here to helpthem; Paulson makes a great case why Cisco is good at what it does,but aphorisms like "[Cisco] listens closely to its customers" areless than effective. Such lines suggest that the book is targetedmore at a general business audience, but how many of those readersactually need advice on how to buy companies? (Publishers WeeklySeptember 10, 2001)