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Master Plans, Powered by Serendipity

"We actually went to Cisco and let them know there were active parties interested in us. They were surprised. And they said, "We didn't realize you were open to considering that." Once they realized we were interested, it all came to a head." --Subrah Iyar, CEO of WebEx to CNET

In the tech community, no company is more talented than Cisco in acquiring and successfully integrating hardware companies. From smaller startups to more recent big fish like Linksys and Scientific Atlanta, Cisco is highly regarded in its acquisition prowess. But what of the strategy behind the purchase a software-as-a-service provider?

Subrah Iyar's remark above strikes us as amusing in the context of this $3.2 billion dollar deal that took only two weeks from WebEx's overture to the Cisco announcement in buying WebEx. For all the press release positioning by Cisco and the endless analysis of the WebEx acquisition and Cisco's "plans," it appears there was no real deep strategy or master plan on Cisco's part. It's as if at a party the prettiest, most popular high school girl in her sophomore year went up to the most handsome quarterback boy in his senior year and said, "Want to dance?" With the WebEx acquisition representing less than 2% of Cisco's market cap - a drop in the bucket - one would think that the hunky high school quarterback's game plan would have included him asking the pretty high school girl to dance, and not the other way around. That wasn't in the playbook. Apparently there was no plan to acquire WebEx, one of the leading, few software-as-a-service players that we're now told by many fits with Cisco's strategy.

When a transaction occurs because of a happenstance opportunity, as this one evidently did, it makes all of the cocksure analysis and opinion about "strategy" seem a bit hollow, notwithstanding the new rationalizations now seem to make for good reading. "It's part of Cisco's plan to go after Microsoft!" or This is a strategy to sell more routers" or "This is part of their vision for a Unified Communications strategy" are frequently heard comments about this deal.

It's all very human. A fluke of an acquisition opportunity turns into a grand, or at least much grander, plan. It gets all puffed up and makes people call other people "visionary" in executing their top secret, long-planned "strategy." Never mind that it's two weeks old, and was generated by the seller.

This isn't a criticism of the Cisco deal or of their business operations. It's just a reminder that serendipity is often the cause or jumpstarter of a grand plan, even if nobody admits it. And kudos to Subrah Iyar in representing the interests of his shareholders. If you don't have the restriction of a "no-shop clause" by a prospective buyer put around you when selling your company, it's always a good idea to create froth in the market by calling up numerous suitors. You just might find one who's looking for a dance partner, and a master plan.


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