The “Acquisition Master,” said Cisco has recently announced a new deal.

The acquisition of cloud security company CloudLock, the total transaction price of $ 293 million. This is Cisco’s fifth launched this year were acquisitions.

As the world’s largest network equipment maker Cisco pioneered the “all things Internet” cloud computing, big data, and so is an important part of its business to digital transformation. Including the acquisition, including the acquisition is more than the industry believe that Cisco plot self “salvation” another move. However, for this performance, Cisco’s market capitalization pulling is not obvious.

Leaving many industry insiders worried that Cisco has chosen a “congestion” on the road, filled with a rival. It has not yet formed its own competitive advantages Cisco wants destined not easy to break.

The acquisition of more and more “soft”

Cisco’s development process has always been associated with the acquisition. Public information, Cisco almost every six weeks will launch a takeover.

Before the acquisition of cloud security firm CloudLock, Cisco has gradually acquired Things startups Jasper Technologies, hybrid cloud service providers CliQr, chipmakers Leaba, cloud search technology start-ups Synata.

It is worth mentioning that Cisco in February to $ 1.4 billion income shopping network platform provider Jasper Technologies, Cisco is not only the past two years, the biggest deal, also considered to be the largest merger in the field of things a lot of people in the industry one. After the acquisition, Jasper can not only provide Cisco networking platform that can expand Cisco’s security, advanced analytics and other networking services.

The recent acquisition of cloud security company CloudLock, are mainly used to strengthen security technology cloud. Acquired in March cloud search technology start-ups Synata, is used to support Cisco’s cloud-based collaboration services “Cisco Spark” end to end encryption services.

Also in early March launch of CliQr USD 260 million acquisition of its technical essence is to help customers select the most suitable cloud service providers.

“Not only these five acquisitions, Cisco’s recent multi acquisitions revolves around cloud computing, software and services large data, expand the” Cisco’s cloud computing and insiders digital service sector pointed out that with the hardware more standardized software gives hardware the soul, innovative IT industry increasingly occur in the software field. By hardware such as routers and switches, Cisco fortune, acquisitions are occurring more and more in software and services.

Typically, it is determined whether or not the acquisition is successful venture is nothing less than whether the acquisition of a controlled and whether the acquisition fit the company long-term development and the interests of the two standards.

The source admitted that the subject must meet Cisco acquired by the transformation direction. The senior vice president of Cisco’s global cloud business two years ago, Nick Earle told the media made it clear that, in recent years, Cisco launched the acquisition of up to 173, all with cloud computing, big data correlation.

In fact, half of this year’s five acquisitions, Leaba acquisition only semiconductor company, is one of the few in recent years, a Cisco hardware acquisitions. It is reported that, Leaba products will become part of Cisco’s core hardware acquisition. In this regard, while the person also said that the final acquisition of the hardware but also software and services in order to expand the extension.

Specific to the mode of acquisition point of view, compared to many companies adopted “She Tunxiang” acquisition mode, willing to spend billions of dollars, will inevitably produce integration in place, rejection reactions. Cisco’s acquisition of more than trace amounts generally less than two digits, like “chipping away” “ism” appear to be more prominent.

“Not only is Cisco’s acquisition model, but also foreign IT enterprises generally acquisition of style ‘Alliance founder Wang Yanhui China Mobile, frankly, a relatively small amount of controlled acquisitions, integration of the difficulty, the risk of failure coefficient; and in view of the technology giant in the field of hardware has become oligopolies and barriers to entry, a large Zaixun find suitable acquisition targets difficult. And software, services and other areas are full of small businesses everywhere, and the software is derived from services, which also fit the needs of the present with Cisco as the representatives of international IT giants from hardware to “software and service” orientation transformation.

And He Jun, general manager of Cisco Greater China Cloud computing and digital media services sector last year had publicly stated that “a new era of IT really can not use the traditional thinking, innovation comes from small US companies, shares of Cisco do not want to stifle this innovation . ”

More and more difficult nut to “bone”

Behind the frequent acquisition is Cisco’s strategic transformation.

According to Cisco’s John Chambers soul-type figure division, from 2010 to 2030 it will no longer be the information age, but the digital age. He made it clear that “all things Internet” will promote the growth of Cisco’s next decade.

Cisco at the end of 2012 for the first time that “all things Internet” strategy. It is also the first dedicated to “all things Internet IOT” of the company. Then put forward the vision of all the global cloud joined together to establish a unified data platform –Intercloud worldwide. By Intercloud, Cisco wants to isolate the cloud together, to break down barriers to data, promoting the arrival of a new wave of all things Internet. It is seen as Cisco’s strategic transformation engine of development.

Around the “all things Internet” strategy, Cisco’s business structure has also changed. Data center virtualization, software, security, and other cloud by Cisco as a key growth area, especially in the data center business is placed Cisco’s expectations.

“Cisco’s strategic transition path is clear, but the performance boost is not obvious.” An IT industry observers have pointed out, Cisco in May 2011 after the reorganization of the transition, clearly aware of the need in addition to the traditional hardware and software to find, new growth pole of services and other areas.

However, nearly three years of earnings data show that the traditional product category still accounted for over 70% of income, no service revenue is always less than 30%. 2015 fiscal year report shows that service class income share holding of 23.2%, compared to fiscal 2014 decreased 0.1%. Specific to the business income, routers, switches and other still occupy nearly half of total revenue. The data center business is only $ 3.22 billion, accounted for only 6.55% of total revenue, in fiscal year 2014 also accounted for only 5.60%.

At the same time, “all things Internet” Cisco’s strategy to enhance the market value is not significant. As of July 5, Cisco shares closed at $ 28.43, the market value of about $ 142.995 billion, less than March 28, 2001, Cisco peak of $ 555.44 billion 1/3.

Many people in the industry view, the current “cloud computing”, “big data” are two major trends in the IT industry innovation, but are two sides of the same coin. Cisco selected transition road no doubt, but a lively, bustling and full of rival.

According to the latest data for the first quarter Synergy Research Group released: AWS with 31% market share, still dominate the cloud services market; Microsoft, IBM, Google in the second echelon, a total of 22% of the market share. Industry consulting firm Gartner published last August in the analysis report, AWS has a computing power of 14-bit computing the sum of the competitors ability 5 times. The second tier of Microsoft and Google, also by more than 100% annual growth rate of struggling to catch up.

“Right now occupies the tip of cloud computing are defended by the enemy and doing my part. Cisco does not fear layout contrary to industry trends, but finding a place of their own lack of differentiated competitive advantage.” Societe Generale Securities (7.690, -0.02, -0.26%) iT industry analyst who asked not to be named, said the Amazon in 2006 took the lead in the layout of cloud computing, e-commerce and its computing capacity has become an absolute advantage. Microsoft in personal and business software, Google in Web search and advertising algorithms form their own competitive barriers.

Clearly, Cisco recognizes its own cloud computing software platform to build on and opportunities have been missed, and the lack of killer embarrassment identity. After it raises all Internet strategy, it represents itself will focus on cloud computing software and hosting services.

However, it also appears to be too perfect.

“IT enterprise cloud computing business had not split, but mutual integration.” The analyst said, Amazon, Microsoft, in addition to providing a platform software, accompanied provide hosting services; on the other hand, Cisco is hoping to open up the Amazon, Microsoft , Google and other cloud their closed environment, “Cisco so directly out of” the analyst said, valuable imaginative cloud computing market, the opportunity to leave a little striking.

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