For Cisco (NASDAQ:CSCO), 2012 was a big year for acquisitions; in order to aid its small-cell technology development, the company added the enterprise Wi-Fi company Meraki Networks, the Wi-Fi traffic analytics startup ThinkSmart Technologies, Service Provider Information Technology specialist BroadHop, Cariden Technologies, and Cloupia. These purchases will help Cisco use its Wi-Fi hardware, management software, and ASR 5000 routers to gain an upper-hand in the budding small-cell market in 2013.
As the company’s senior director of service provider marketing, Murali Nemani, said in a recent interview with Light Reading Mobile, Cisco has no plans to make any larger acquisitions. Those types of purchases would bring competition from Ericsson (NASDAQ:ERIC) and Alcatel-Lucent (NYSE:ALU) in the traditional base station market, which he described as a “a slow-growing, highly commoditized space we knew we couldn’t create value on.” However, the company may make additional wireless-focused purchases to “fill gaps” in its portfolio.
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With its small-cell strategy, Cisco intends to integrate unlicensed Wi-Fi access points with licensed cellular 3G or 4G networks, according to the publication. This plan will enable carriers to manage both their wireless and cellular small-cell networks as one mobile network and make use of the company’s ASR 5000 mobile multimedia core router.
Forbes contributor Richard Saintvilus noted that Cisco’s acquisitions portend a profitable 2013 for the company because they provide access to the cloud market, which is expected to grow to $177 billion in the next three years, and boost the company’s enterprise LAN management solutions. Raymond James analyst Simon Leopold made a similar assessment on December 10, writing that shares of Cisco have the potential to reach $25, a premium of approximately 25 percent, in the next year.
“We expect Cisco to outline its strategic vision to become a broader IT supplier with a greater software bias, which aids margin,” Leopold said in a research note seen by the publication. “We expect Cisco maintains its 5-7% long term growth target while offering cautious commentary on the near term.”
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