Collaborating the Cisco Way

As John Chambers points out, few companies have mastered the art of successful collaboration. Cisco itself has followed an aggressive growth-by-acquisition strategy, gobbling up small technology outfits that provide superlative solutions in the product-market areas in which it seeks future dominance. Rather than waste valuable time developing in-house solutions in all areas, Cisco selectively acquires technology-rich companies that can then be supplemented with its extensive and sophisticated marketing and support network.

Although the acqusition costs to Cisco might not be significant on a per-deal basis, speedy implementation and integration of these deals within the Cisco framework increase the chances of non-linear returns in attractive product-markets. In addition, Cisco actively partners with large players like Microsoft, EDS, Peoplesoft, HP, and many other industry leaders on projects of joint strategic interest and importance. These projects typically involve more substantial R&D investment and aim to avoid expensive duplication through the development of mutually acceptable (and industry) standards.

Thus, Cisco plays both ends of the spectrum, enabling it to chart and push the broad vision for an emerging industry, and also carry out detailed implemention in specific solution areas. It's critical competence therefore is in bringing new technologies to market in an extremely short time-span, whether it be through collaborative R&D, or the acqusition of R&D from elsewhere.