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Cisco's Timing Good
Zeus Kerravala, principal analyst at ZK Research, told us he's not surprised that Cisco would sell off Linksys, given Cisco's stated intention to stick to its core business. Linksys, he said, stuck out like a sore thumb.
"Cisco likes to sell architecturally -- that means multiple products make up the solution -- and even the set-top box is part of the cable architecture, but Linksys isn't really part of anything," Kerravala said.
Although Kerravala understood Cisco's reasoning for buying Linksys in 2003 -- there was plenty of debate 10 years ago about how the home network would be built, and talk about PCs being at the center of home entertainment systems -- the reality is that many assets are moving to the cloud. The only role the Linksys router plays right now is one of connectivity.
"Linksys is rapidly becoming a commodity. From Cisco's standpoint the timing was good. They still have a large share and a premium product," Kerravala said. "But I don't think that would have lasted forever, especially for a company that de-emphasized the consumer business. So it was time to move along and it served its purpose and now the company is heading in a different direction."
The transaction is subject to various standard closing conditions and is expected to close in March.