>Would it be fair to say that WIND is using the same business model
>as Cisco in terms of trying to grow the company?
No, it would not. Cisco has institutionalized acquiring companies to enhance top-line growth and to obtain the technology. Somehow, Cisco is able to reap more benefits than most companies from acquisitions. Computer Associates also has made an art of cheaply acquiring companies and surgically slicing away unneeded parts.
Most companies, particularly small companies like WIND, go through enormous turmoil following major acquisitions. You might recall all the warnings I gave for INTS stock, following its rash of acquisitions. INTS has yet to fully recover from management taking its eye off the Tornado challenge in order to focus on resolving organizational problems following numerous acquisitions. For example, in their last quarterly report they explained that newly acquired Epilogue's sales were down because the company essentially shut down business in order to move operations from New Mexico to California, to be near headquarters.
Consequently, without compelling reasons, full-scale (sizable) acquisitions should be avoided by most companies. There are many other, less demanding and risky, ways to participate in opportunities that present themselves to most companies. This was the gist of my previous post, which I somehow failed to convey properly. Otherwise, you would see the Cisco acquisition strategy as being diametrically opposed to the technology investments I was championing.
Incidentally, Intel, Microsoft, Motorola and many other aggressive companies pursue technology investments along the line I tried to explain. I suspect they pursue these investments at a far greater rate than out-right acquisitions.
Allen |
