Why do some companies thrive and others wither and die no matter how big they are? The answer depends on who you ask but one thing is for sure you can’t sit on your laurels just because you are big. You will find countless companies who thought they were invulnerable no longer in business.
Cisco on the other hand has been growing and making strategic acquisitions to stay in the forefront of network traffic. Their first acquisition in 2012 was Lightwire a company with the right technology for Cisco to deal with the soaring increase of network traffic.
The Purchase
This was a very smart buy for Cisco and for $271 million it is a bargain considering how much the technology will help Cisco maintain its lead as the world’s largest networking equipment maker. Lightwire was purchased at a devalued price. The optical technology Lightwire brings to the table is designed for super fast networks for the next generation. Once the purchase goes through it will be part of Cisco’s Transceiver Modules Group Business Unit and Supply Chain Operations Group.
Benefit To CISCO
When Lightwire is fully integrated with Cisco it will add multiple high speed active and passive optical functions on chips. These silicon chips are small and they will allow Cisco to offer high density optical connectivity at a lower price. The lower price means they will be able to provide their product to new emerging markets as well as keeping their existing customers by offering competitive rates for the newest available technology. It will supply large data centers with cost effective high speed networks as the number of traffic increases daily challenging existing bandwidth.
The Technology
Lightwire uses a propriety process to make a new type of high speed transceivers to transmit information using an accurate beam of light. They manufacture optical transceivers using CMOS (Complementary Metal Oxide Semiconductor) Photonics technology. This allows for high degree integration and density while sustaining very low level of power dissipation. The low power dissipation makes it possible to make smaller modules improving the bandwidth density of network equipment.
The Strategy
According to Cisco their strategy in acquiring Lightwire will strengthen their commitment to networking as well as providing the most reliable, efficient as well as cost effective optical transport, switching and routing solutions.
Is Lightwire The Right Choice?
By all accounts this is one of the best choices Cisco has made regarding its core business and their future in it. Lightwire guarantees Cisco will be a player in the networking equipment sector for sometime to come. Cisco sees no problem integrating Lightwire with their existing module and silicone engineering teams. The knowledge base of both companies in silicon design from Cisco and CMOS Photonics from Lightwire will introduce products to maximize the potential of data center market and service providers around the world.
The Future
The future in computing as most companies see it lies in cloud services, which means networks and data services have to provide large volumes of information with reliability. This will place a lot of demand on the companies supplying this service and the company poised with the right technology and pricing structure will be able to control a substantial portion of the market share.
Companies acquire new assets for a variety of reasons, some logical and others incomprehensible. Companies which make purchases based on what will keep them alive in the future have a better chance of not winding up obsolete.
