Ed Paulson – Inside Cisco: The Real Story of Sustained M&A Growth

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Exploring the Essential Features of “Ed Paulson – Inside Cisco: The Real Story of Sustained M&A Growth”

An insider reveals the core strategies behind Cisco’s phenomenal successMost savvy business observers agree that the major component in Cisco’s phenomenal growth has been their unwavering commitment to expanding their product line through aggressive acquisitions. Since 1995, the “New Goliath,” as Cisco is known throughout the business and finance communities, has acquired more than sixty companies. In this groundbreaking book, a Silicon Valley veteran, Ed Paulson, uses his strong connections to Cisco’s management to reveal the M&A gospel according to Cisco.

Paulson explores how Cisco has used acquisitions to stay ahead of its competitors, analyzes their strategies and proven methods for incorporating new companies seamlessly, positively, and profitably. Paulson reveals the centerpiece of Cisco’s acquisition strategy-one that is company-focused, culturally compatible, and retains staff. He examines how Cisco executives determine if a target company is compatible with Cisco’s corporate culture and strategic outlook and describes the extraordinary lengths to which these executives will go to gain the loyalty of acquired people. This book details the Cisco methodology and illustrates how it can be applied to companies across industries.

Ed Paulson (Chicago, IL) is President of Technology and Communications, Inc., a business and technology consulting firm and a visiting professor at DePaul University’s School for New Training. He is a Silicon Valley veteran with more than two decades of experience and the author of numerous business and technology books, most recently, The Technology M&A Guidebook (Wiley: 0-471-36010-4).

Editorial Reviews
Amazon.com Review
No matter what happens in the future with the tech sector in general or to Cisco Systems in particular, the company that made the router almost a household name will be known forever as a bellwether behemoth in the networking industry–and one who got that way largely through a shrewd acquisition strategy. Inside Cisco, by veteran Silicon Valley entrepreneur Ed Paulson, examines how the company nimbly absorbed 70 firms since 1993 and, at least until the postmillennial tech crash, managed to leverage the people and technology it added into impressive, continual advancement. “In fact,” Paulson writes, “the company has been so successful with its acquisitions that the industry created a new term for Cisco’s type of research and development approach: acquisition and development.” With an eye toward making this agile, adaptive strategy accessible to others, Paulson analyzes the practice and rationale behind it and then assesses how portable its elements are to other companies and industries. Explorations of everything from due diligence to the integration of personnel, products, and production are supplemented by specific examples, comments from people directly involved, and Paulson’s own experienced perspective. –Howard Rothman

From Publishers Weekly
Once the gold-plated standard for how to succeed on the Internet, Cisco Systems has since lost some of its luster. But even though the company’s stock price has dropped, Paulson (The Technology M&A Guidebook) makes a convincing case for still using Cisco as a model for how other companies can manage their M&A (merger and acquisition) growth. For one, Cisco buys companies not just when it is trying to expand or protect itself against potential competitors, but rather “as an integral part of its system,” thus looking ahead for future growth. Indeed, Cisco’s acquisitions have been prolific, and the author explains who the company targets for acquisitions and why. Unlike many acquirers, Cisco tries to retain most of the personnel during an acquisition, and Paulson shows how that makes good sense. According to Cisco CEO John Chambers, “If you pay $500,000 to $2 million per person… and you lose 30 to 40 percent of those people in the first two years, you’ve made a terrible decision.” Paulson shows most of Cisco’s major acquisitions and the buying price per employee, which is appropriate for a book on M&A’s, of course, but he is too meandering to offer specific, helpful information. Those interested in refining their company’s M&A strategies won’t find too much here to help them; Paulson makes a great case why Cisco is good at what it does, but aphorisms like “[Cisco] listens closely to its customers” are less than effective. Such lines suggest that the book is targeted more at a general business audience, but how many of those readers actually need advice on how to buy companies?Copyright 2001 Cahners Business Information, Inc.

Review
Once the gold-plated standard for how to succeed on the Internet, Cisco systems has since lost some of its luster. But even though the company’s stock price has dropped, Paulson (The Technology M&A Guidebook) makes a convincing case for still using Cisco as a model for how other companies can manage their M&A (merger and acquisition) growth. For one, Cisco buys companies not just when it is trying to expand or protect itself against potential customers, but rather “as an integral part of its system,” thus looking ahead for future growth. Indeed, Cisco’s acquisition have been prolific, and the author explains who the company targets for acquisitions and why. Unlike many acquirers, Cisco tries to retain most of the personnel during an acquisition, and Paulson shows how that makes good sense. According to Cisco CEO John Chambers, “If you pay $500,00 to $2 million per person–and you lose 30 to 40 percent of those people in the first two years, you’ve made a terrible decision.” Paulson shows most of Cisco’s major acquisitions and the buying price per employee, which appropriate for a book on M&A’s, of course, but he is too meandering to offer specific, helpful information. Those interested in refining their company’s M&A strategies won’t find too much here to help them; Paulson makes a great case why Cisco is good at what it does, but aphorisms like “[Cisco] listens closely to its customers” are less than effective. Such lines suggest that the book is targeted more at a general business audience, but how many of those readers actually need advice on how to buy companies? (Publishers Weekly September 10, 2001)

From the Inside Flap
Networking giant Cisco Systems is a dominant technology company with $19 billion in fiscal revenues and 30,000 employees. Yet, despite its size, Cisco retains its entrepreneurial spirit, responding to marketplace demands with remarkable speed using a combination of product innovation and technological advances. Inside Cisco provides a Silicon Valley insider’s view of the company’s core strategies with emphasis placed on Cisco’s “Gold Standard” acquisition practices.

Critical to Cisco’s historical success has been its powerful commitment to expanding its product line and level of expertise through smart acquisitions. With Inside Cisco, Silicon Valley veteran Ed Paulson delivers the unique M&A philosophy of Cisco Systems and outlines the management and financial procedures used to create these acquisition successes.

Beginning with an examination of a corporate culture specifically designed to acquire and assimilate other companies, Inside Cisco explores every aspect of the firm’s acquisition and development (A&D) process, refined through Cisco’s deals with over seventy corporations. Through extensive research as well as access to current and former Cisco executives, Paulson reveals how Cisco buys companies for their people, technology, products, and intellectual capital and not simply as a financial operation.

Inside Cisco gives the business and finance world an inside peek at how Cisco has consistently profited from its acquisition strategy, as have the companies it has purchased. The book deciphers the company’s primary growth and profitability strategy and reveals the three key elements of Cisco’s approach:
* Using acquisitions as a strategic weapon for increasing market share while enhancing customer satisfaction
* Targeting companies that provide the best fit for Cisco’s own strategic direction and corporate culture
* Determining success based on the level of post-purchase retention and the integration of newly acquired personnel and intellectual capital

Paulson’s detailed examination of Cisco’s acquisitions process provides excellent background for business and finance executives intending to use acquisitions as part of their company’s growth strategy. Insightful and comprehensive, Inside Cisco reveals one of the most successful acquisition approaches in the business world today and provides an M&A best practices guidebook that can be applied in any industry.

From the Back Cover
According to Cisco CEO and President John Chambers, when a company acquires technology-any technology-they are also acquiring people. In order for an acquisition to succeed, a company not only needs to be careful in the selection process, but also needs to have a culture in place that accepts the acquisition as quickly as possible.

Buying a company is easy. Making a success of that company post-acquisition is something else altogether and often meets with costly failure. No other company has used mergers and acquisitions as a strategic weapon more effectively than Cisco Systems. Throughout its acquisition of over seventy companies, Cisco avoided significant employee turnover and successfully leveraged the acquired firm’s products and technologies to enhance Cisco’s revenue growth.

In Inside Cisco, Silicon Valley insider Ed Paulson profiles Cisco’s growth-by-acquisition strategy and the key people who molded Cisco into a business designed to acquire and assimilate other companies. By providing a behind-the-scenes perspective of its acquisitions, Paulson’s investigative analysis of Cisco outlines a strategic and operational M&A framework that can be applied in any industry.

About the Author
ED PAULSON is the President of Technology and Communications, Inc. He is a ten-year Silicon Valley start-up veteran who previously worked with several executives instrumental to Cisco Systems’s incredible success story. He is the author of over ten business and technology books, his most recent being The Technology M&A Guidebook (Wiley). Currently a Visiting Professor of Business at DePaul University in Naperville, Illinois, his professional background spans over twenty years as a business manager, engineer, and entrepreneur in both Silicon Valley and Austin, Texas. He can be reached at www.edpaulson.com.
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Product details
Publisher ‏ : ‎ Wiley; 1st edition (September 14, 2001)
Language ‏ : ‎ English

 

About the author
Ed Paulson
Read my books to learn what is needed to put the odds of success on your side. MY MISSION is to help readers improve their business and personal lives by simplifying the complicated – making it useful in everyday life. I continually ask one question while writing: “Why would anyone care about this?” Concepts are useful and powerful but only as they can be applied to improve the quality of life.

The combination of advanced technology and business management education (too many degrees according to my family and friends) with 30+ years of practical experience (yes – gray hair is involved) in a wide variety of fields and places such as Silicon Valley and Austin, TX enable me to speak science, technology, finance, entrepreneurship, management, engineering, sales and marketing “geek” (partial listing) while always trying to answer the question, “Why would anyone care about this?”

IT IS AN HONOR to serve my readers, clients, students, colleagues and friends in the successful pursuit of their own best lives. I promise to keep reinventing myself and hope that you occasionally invite me into your life along the way.

MY LATEST BOOK is “Getting Through: A Systematic Approach To Being Understood” which is published my own imprint, ProChango Publishing. This book offers a communication approach that makes sure that your business messages are understood as you intended. It represents over 30 years of communication experience based on media richness theory, a powerful method for choosing the right media for delivering the right message to the right audience. A powerful yet simple technique that will change how you communicate into the future.

MY PRIOR BEST-SELLER was the Sixth Edition of “The Complete Idiot’s Guide to Starting Your Own Business” which in prior editions has sold over 200,000 copies. This edition has been substantially revised to address the questions that readers have told me they need to answer today. Feedback from prior readers who have started their own successful businesses let me know if I am on the right track in my mission. I hope to hear from you.

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