Cisco Gets Back to Business

Charlene OHanlon
It's about time. Cisco has finally shed its all-things-to-everyone mindset and is once again focusing on its core areas of expertise: networking and collaboration. The company has restructured its consumer business, including killing the Flip video camera line and making the Umi home telepresence solution part of its business-focused TelePresence product line. Additionally, its home networking and Eos media solutions offerings will be re-evaluated to capitalize on emerging market trends such as video in the home.

Once again I say: It's about time. And I can imagine there are quite a few echoes of those same words on Wall Street.

When Cisco snapped up the Flip in 2009 for $590 million, I'm not embarrassed to say that I didn't understand its motive. Flip didn't fit into any of the markets Cisco played hard in, and it even seemed out of place in its emerging consumer business. (In contrast, its acquisition of Linksys in 2003 was a lot easier to swallow, although back then the thought of Cisco working outside the enterprise was difficult to accept.)

Since then, the company seemed to have lost its focus, dabbling in too many areas of technology and vacillating between business and consumer. Its moves were akin to a gambler laying bets on every number on the roulette board-the ball is guaranteed to drop in his number, but how much does he really win?

Wall Street, however, was clearly not amused, sending its stock price to its 52-week low in February. It was clear Cisco needed to make some changes and get back to the technologies it excels at. Now that its consumer business is much lighter (and really, all but obliterated), Cisco no longer has the distraction of trying to be everything to everyone.

Cisco has a tough row to hoe as it works to get back in the good graces of Wall Street and its customers. Getting rid of the dead weight was a good first step. Now let's see some true networking innovation.
 



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