back to article Cisco refuses to deny it will sell off Linksys

Cisco is understood to be planning to sell off its consumer router Linksys business. The company has declined to squash the rumour. According to people familiar with the situation, the network giant is mulling over letting go of its WebEx brand, too. The moves could come as soon as next week. A Cisco spokesman told The Register …

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Happy

the company was not willing to "comment on rumour and speculation".

That's the stock standard answer for a "Yes" then.

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Yes, Minister

On the contrary, conventional wisdom has it that "you should never believe a rumour until it's officially denied"

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FAIL

Logic

Flip I can understand - they had a lot of cash and bought it on a whim.

WebEx - well, it's related but it's not a physical product. Compared to how much they paid for it, I'm not sure how much profit is generated and what they would get for it on the open market.

Linksys - hey, they make lower cost domestic/SME networking kit - there is affinitity with the core CISCO offerings.

John Chambers lost his way, there's no need to over-correct now...

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Alien

focus our attention and resources?

How about focusing on a vertical stack of products and forming an alliance with the telecoms and content owners. Provide a low cost consumer media center and license the servers to the content providers - that's where the real money lies. It's the difference between the iPhone and Nokie. Nokie sells bricks while Apple provides a total online experience. Sun could have been doing this years ago before they self destructed. AOL-Time Warner could have been doing it also but didn't seem to know what to after the merger.

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Claud Cockburn said:

"Never believe anything until it has been officially denied."

Seems to apply in ever so many situations.

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WebEx a consumer business?

Errr... I don't think of WebEx as a consumer business. It's a business that generates products used primarily by end users (as opposed to the IT dept.), but it's not really a "consumer product."

That said, it was a strange acquisition for them to make. I know Cisco is always looking for new applications that will inhale network bandwidth, but screen sharing and/or low-end video conferencing are not one of them. Nor, for that matter, is IP telephony these days. (Compared with total corporate bandwidth use.)

If I were Cisco, I would sell or spin-off WebEx, Linksys, IP Phone Endpoint, and the end-use parts of Sci Atlanta. (Does Sci Atlanta do head-end equpment? I don't know... that would be a business worth keeping.) High-vol, low margin HW manufacturing is a tough business for an enterprise IT HW provider to be in (just ask IBM about this.) And certainly the end-user support with WebEx and Linksys is no fun. (Although admittedly HP seems to manage... sort of.)

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Anonymous Coward

yes they do.

My ex-brother-in-law used to design their head-end systems. As he's now 'ex', I don't know if they still do.

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well......

They're clearly in the process of folding all the Linksys range into Cisco branding (same part numbers, now with Cisco labels, etc)

If they sell the brand, I suspect it'll be the name only.

OTOH the bottom end of the market is being creamed by cheap'n'chirpies - it may be time for Linksys to go upmarket a little.

(Looks at long-time competitors D-link and Netgear, now both selling gear which competes head-on with Cisco's lower end Enterprise range, with ZyXEL joining the fray too.)

ADSL gear might well be a dead end market for endusers. VDSL and fibre gear isn't exactly widely available for resale, nor will telcos let endusers connect their own kit (yet).

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WebEx sale would make little sense

Cisco had a web conferencing solution, called MeetingPlace, prior to the WebEx acquisition. MeetingPlace was more limited compared to the emerging hosted solutions at that time (Microsoft LiveMeeting, WebEx, GoToMeeting, and WebDialogs). It seemed Cisco likely acquired WebEx so it could keep its MeetingPlace customers from going to hosted solutions.

If Cisco gave up its many WebEx customers to someone else, they could lose some control of their VoIP installed base.

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Anonymous Coward

Also...

...Cisco is now almost certainly WebEx's biggest customer. Pretty much all internal meetings are conducted via WebEx as well as a significant portion of internal training. It's integrated into a number of applications and has become an intrinsic part of how business is conducted at CIsco (far more than the old meetingplace ever was). Selling it off would mean then having to license it back or find another solution. For the level of use either could be costly.

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Time to stock-up...

... on WRT54GLs.

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what's left of linksys

what I find quite interesting is that they recently re-branded a lot of the Linksys kit as "Cisco Small Business", certainly this happened to all the IP telephony stuff that came with Linksys. So it looks to me like they'll rebrand what they want to keep and then sell off the Linksys brand along with whatever products they don't want.

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Do we really care, when there are quality products from ....

TP-Link? Their products can be patched and all manner of neat 'features' added including high power outputs.

ASUS has it's new WiFi line, too.

Linksys always looked 'clunky' with it's case designs.

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"Linksys always looked 'clunky' with it's case designs."

True...

But it seems to me that the 'clunky-looking' Linksys boxes I've owned have always worked better than their new(er) router/access points which are stuffed into those slim "flying-saucer-wedge' cases.

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Unhappy

"those slim "flying-saucer-wedge' cases" ...

can't be stacked, either, unlike good old square cornered boxes.

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Linksys?

Overpriced tat.

I can't see why Cisco would want to drop something that fits their product strategy so well.

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Troll

lessons never learned

Say, didn't 3Com - many years ago - go and throw a butt load of money into consumer market and by doing so take their eye off the Corproate ball, leading to huge losses (just when they were really breathing down Cisco's neck) and sell offs? Those who fail to learn from history etc

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somewhat understandable

i see why they might want to offload Linksys - after all, their wireless kit is pretty good and makes cisco APs look very very expensive for the same wifi signal that the end user gets. likewise, being in the low-end commodity market isnt getting you same revenues - they should get out of the set top box arena too

WebEx though - that could work well with cisco networks and fully integrated environments - its an end point solution for those that cannot Telepresence natively

Flip video? well, that was because John Chambers just said one day in his office that he'd like Flip camera (just like Intel CEO said go and get me McAfee antivirus for my laptop ;-) )

Cisco have sort of lost the ball - or certainly the focus - on core networking - they are losing out to

the other players and the cheeky new comers. I would welcome Cisco coming back to pure-play in the network (and running eg their VoIP, CCTV, videoconference stuff as spin-offs )

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5 Reasons why I don't think Cisco will sell

1) Cisco has in fact been suffering many publicized challenges recently. CEO John Chambers, made it quite clear they will now focus on 5 key areas:

a. Routing, switching and services

b. Collaboration

c. Data center “virtualization” – servers that handle multiple OS at the same time / Cloud-computing

d. Architectures

e. Video

Webex fits squarely into three of these - collaboration, cloud computing and video) – so selling it would be contrary to Cisco’s stated strategy.

2) Webex has been growing at a pretty good clip. Webex generated $380 million in sales when Cisco purchased them in 2007. I hear they’re now close to $1 billion700 million in sales and holding pretty strong as the clear market leader with around 3465% of the share.

3) Analysts predict strong growth for communication and web-conferencing. Web conferencing was a $1.7 B market in 2009, $2.5 B today, while some analysts forecast close to $20 B by 2015. And Microsoft just spent $8.5 billion to buy Skype. Something is really going on in this market and now doesn’t seem like the right time to jump ship.

4) The Register post positions Webex as a consumer play. I don’t see that at all. Webex is challenging Citrix for the business market while IBM and Microsoft head to the CIO’s office to sell IP-based, hybrid, cloud, and ‘behind the firewall’ communications solutions. Salesforce.com just bought DimDim to integrate tightly with their CRM platform so salespeople can quickly start a web sales meeting. Clearly there is a growing need for business web-conferencing and Webex is very well positioned in this market.

5) And finally – if it were for sale – who would buy Webex? If Cisco paid $3.2 billion a few years ago, and it’s grown very nicely (I assume it’s profitable), who would pay anywhere between $5-8 billion for it?

Given Cisco’s strategy and the state of the web conferencing market, I think Cisco has no intention of dumping Webex. To use your phrase, this is “unfounded hogwash”.

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