Zeus Kerravala
Zeus Kerravala is the founder and principal analyst with ZK Research. Kerravala provides a mix of tactical advice to help his...
Read Full Bio >>

Zeus Kerravala | January 24, 2013 |


Cisco Says Goodbye to Linksys

Cisco Says Goodbye to Linksys This completes the consumer chapter in Cisco's history. Many looked at Linksys as a distraction to Cisco. It served its purpose and now it's time to move on.

This completes the consumer chapter in Cisco's history. Many looked at Linksys as a distraction to Cisco. It served its purpose and now it's time to move on.

Remember back to 2003? The Iraqi war had started, the movie "Chicago" won an Oscar for best picture, the Buccaneers beat the Raiders in one of the worst Super Bowls I remember, and we were all listening to Norah Jones and Michelle Branch. In tech though, March of 2003 was when Cisco stepped into the consumer market with the $500 million acquisition of Linksys.

For the record, VMWare was acquired a few months later by EMC for just a couple of hundred million more. What could have been? I remember thinking Linksys was a bit of an odd acquisition at the time, in fact I was quoted as saying so in this article.

While I was initially skeptical, there's no question that Linksys thrived under Cisco, and as home networking grew, so too did the Linksys share. I think it's fair to say that Linksys has been the most successful home networking company in history under Cisco's ownership; but like they say, all good things must come to an end.

Late Thursday, Cisco announced it was divesting of Linksys by selling the business unit to Belkin for an undisclosed amount of cash--although considering how the size of the home networking market has grown, Cisco should have fetched substantially more than the $500 million it paid for Linksys 10 years ago.

The decision to sell off the Linksys business unit makes sense for Cisco. In fact, I'm a little surprised they didn't do this a bit earlier. After Cisco shut down Flip, CEO John Chambers had made a commitment to focus on core areas and shed parts of the business that didn't fit into the company's architectural approach. Soon after, the Umi telepresence product went, and that made Linksys stick out like a sore thumb. Many people thought Scientific Atlanta would be on the chopping block first, but the set top box actually is part of the cable operator's network more so than the home network.

I'm not saying the acquisition of Linksys was a mistake. Far from it. When Cisco bought the company there was a lot of debate in the industry about what the future of home technology would look like and what would be the centerpiece of the networked home. If you remember back, Microsoft was pushing its media center PC and others were vying for that position. There's no reason to think that when content and applications were resident in the home, the Linksys device wouldn't have played a key role.

Also, Linksys filled a gap for years for Cisco in the SMB space. Selling traditional Cisco equipment into SMBs is like trying to recruit Sidney Crosby to come play hockey on my men's league team. It could be done, but it would be far too expensive and overkill for my needs. So too with Cisco; and Linksys filled the gap for a time. Eventually Cisco did release a line of Cisco-branded infrastructure specifically for that level of the business market and Linksys became a consumer-only product.

So Linksys did make sense for a while, but times change. Content is moving to the cloud faster than Bill Belichick ran off the field after losing the AFC championship game. This means the home networking infrastructure plays a more limited role--connectivity and adding a few functions that most people don't use, like time of day access, rate limiting and guest access. Of all the extended features, a small percentage will enable guest networks but that's still the minority of the deployments.

Additionally, the proliferation of Apple devices has made functionality like Bonjour support in the home a must, so many buyers have just turned to the Apple products. Sets up easy, extends easy and Apple tells you to buy it, so why not? This means the rest of the home networking market is facing commoditization, since the role is now limited; and Cisco doesn't really like commodity markets, so selling the business is well timed.

For Belkin, the combined share gives them about 30% of the overall home market, and Belkin plans to maintain the Linksys brand, at least in the near term. This fits nicely into the large portfolio of consumer products Belkin already has, and the company should be able to leverage the Linksys products better than what Cisco would have been able to.

The companies did state they would maintain a strategic relationship between the two on a number of initiatives, the most obvious one being products that are sold through service providers into the home.

So this completes the consumer chapter in Cisco's history. This should be well received by investors and customers, as many looked at Linksys as a distraction to Cisco. It served its purpose and now it's time to move on.

Follow Zeus Kerravala on Twitter and Google+!
Zeus Kerravala on Google+


March 7, 2018

Video collaboration is experiencing significant change and innovation-how can your enterprise take advantage? In this webinar, leading industry analyst Ira Weinstein will present detailed analysis

February 21, 2018

Business agility has become the strongest driver for enterprises to begin migrating their communications to the cloud-and its a benefit that enterprises are already realizing. To gain this benefit

February 7, 2018

Enterprises are starting to grasp the critical importance of security and compliance in their team collaboration deployments. And once the risks are mitigated, your enterprise can integrate these n

March 12, 2018
An effective E-911 implementation doesn't just happen; it takes a solid strategy. Tune in for tips from IT expert Irwin Lazar, of Nemertes Research.
March 9, 2018
IT consultant Steve Leaden lays out the whys and how-tos of getting the green light for your convergence strategy.
March 7, 2018
In advance of his speech tech tutorial at EC18, communications analyst Jon Arnold explores what voice means in a post-PBX world.
February 28, 2018
Voice engagement isn't about a simple phone call any longer, but rather a conversational experience that crosses from one channel to the next, as Daniel Hong, a VP and research director with Forrester....
February 16, 2018
What trends and technologies should you be up on for your contact center? Sheila McGee-Smith, Contact Center & Customer Experience track chair for Enterprise Connect 2018, gives us the lowdown.
February 9, 2018
Melanie Turek, VP of connected work research at Frost & Sullivan, walks us through key components -- and sticking points -- of customer-oriented digital transformation projects.
February 2, 2018
UC consultant Marty Parker has crunched lots of numbers evaluating UC options; tune in for what he's learned and tips for your own analysis.
January 26, 2018
Don't miss out on the fun! Organizer Alan Quayle shares details of his pre-Enterprise Connect hackathon, TADHack-mini '18, showcasing programmable communications.
December 20, 2017
Kevin Kieller, partner with enableUC, provides advice on how to move forward with your Skype for Business and Teams deployments.
December 20, 2017
Zeus Kerravala, principal analyst with ZK Research, shares his perspective on artificial intelligence and the future of team collaboration.
December 20, 2017
Delanda Coleman, Microsoft senior marketing manager, explains the Teams vision and shares use case examples.
November 30, 2017
With a ruling on the FCC's proposed order to dismantle the Open Internet Order expected this month, communications technology attorney Martha Buyer walks us through what's at stake.
October 23, 2017
Wondering which Office 365 collaboration tool to use when? Get quick pointers from CBT Nuggets instructor Simona Millham.
September 22, 2017
In this podcast, we explore the future of work with Robert Brown, AVP of the Cognizant Center for the Future of Work, who helps us answer the question, "What do we do when machines do everything?"
September 8, 2017
Greg Collins, a technology analyst and strategist with Exact Ventures, delivers a status report on 5G implementation plans and tells enterprises why they shouldn't wait to move ahead on potential use ....
August 25, 2017
Find out what business considerations are driving the SIP trunking market today, and learn a bit about how satisfied enterprises are with their providers. We talk with John Malone, president of The Ea....
August 16, 2017
World Vision U.S. is finding lots of goodness in RingCentral's cloud communications service, but as Randy Boyd, infrastructure architect at the global humanitarian nonprofit, tells us, he and his team....
August 11, 2017
Alicia Gee, director of unified communications at Sutter Physician Services, oversees the technical team supporting a 1,000-agent contact center running on Genesys PureConnect. She catches us up on th....
August 4, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, has lately been working on integrating enterprise communications into Internet of Things ecosystems. He shares examples and off....
July 27, 2017
Industry watcher Elka Popova, a Frost & Sullivan program director, shares her perspective on this acquisition, discussing Mitel's market positioning, why the move makes sense, and more.
July 14, 2017
Lantre Barr, founder and CEO of Blacc Spot Media, urges any enterprise that's been on the fence about integrating real-time communications into business workflows to jump off and get started. Tune and....
June 28, 2017
Communications expert Tsahi Levent-Levi, author of the popular blog, keeps a running tally and comprehensive overview of communications platform-as-a-service offerings in his "Choosing a W....
June 9, 2017
If you think telecom expense management applies to nothing more than business phone lines, think again. Hyoun Park, founder and principal investigator with technology advisory Amalgam Insights, tells ....
June 2, 2017
Enterprises strategizing on mobility today, including for internal collaboration, don't have the luxury of learning as they go. Tony Rizzo, enterprise mobility specialist with Blue Hill Research, expl....
May 24, 2017
Mark Winther, head of IDC's global telecom consulting practice, gives us his take on how CPaaS providers evolve beyond the basic building blocks and address maturing enterprise needs.
May 18, 2017
Diane Myers, senior research director at IHS Markit, walks us through her 2017 UC-as-a-service report... and shares what might be to come in 2018.
April 28, 2017
Change isn't easy, but it is necessary. Tune in for advice and perspective from Zeus Kerravala, co-author of a "Digital Transformation for Dummies" special edition.
April 20, 2017
Robin Gareiss, president of Nemertes Research, shares insight gleaned from the firm's 12th annual UCC Total Cost of Operations study.
March 23, 2017
Tim Banting, of Current Analysis, gives us a peek into what the next three years will bring in advance of his Enterprise Connect session exploring the question: Will there be a new model for enterpris....
March 15, 2017
Andrew Prokop, communications evangelist with Arrow Systems Integration, discusses the evolving role of the all-important session border controller.
March 9, 2017
Organizer Alan Quayle gives us the lowdown on programmable communications and all you need to know about participating in this pre-Enterprise Connect hackathon.
March 3, 2017
From protecting against new vulnerabilities to keeping security assessments up to date, security consultant Mark Collier shares tips on how best to protect your UC systems.
February 24, 2017
UC analyst Blair Pleasant sorts through the myriad cloud architectural models underlying UCaaS and CCaaS offerings, and explains why knowing the differences matter.
February 17, 2017
From the most basics of basics to the hidden gotchas, UC consultant Melissa Swartz helps demystify the complex world of SIP trunking.
February 7, 2017
UC&C consultant Kevin Kieller, a partner at enableUC, shares pointers for making the right architectural choices for your Skype for Business deployment.
February 1, 2017
Elka Popova, a Frost & Sullivan program director, shares a status report on the UCaaS market today and offers her perspective on what large enterprises need before committing to UC in the cloud.
January 26, 2017
Andrew Davis, co-founder of Wainhouse Research and chair of the Video track at Enterprise Connect 2017, sorts through the myriad cloud video service options and shares how to tell if your choice is en....
January 23, 2017
Sheila McGee-Smith, Contact Center/Customer Experience track chair for Enterprise Connect 2017, tells us what we need to know about the role cloud software is playing in contact centers today.