Cisco's Chambers Speaks Out About Megadeals, According to Exclusive Report on Computer Reseller News Online (www.crn.com)PRNewswire Cisco Systems Inc. (Nasdaq-NNM: CSCO) chief executive, John Chambers, said rivals 3Com Corp. and Ascend Communications, Inc.(Nasdaq-NNM: ASND) will have their hands full with their respective forthcoming mergers. In an exclusive report posted on CMP's Computer Reseller News Online site (http://www.crn.com/) at 2:45 p.m., Chambers indicated that he probably would not have agreed to either deal. "In mergers among fairly equal companies with different geographies, more than 50 percent will fail," Chambers told CRN Online. "Both (Ascend and 3Com) did their acquisitions for very logical reasons, but both merged with companies of similar size and similar head count and with dramatically different geographies. The challenges they have will be much tougher than the challenges we face in our acquisitions with small technology companies or even with StrataCom -- a company that was about one-fifth of our size [and] located about 35 minutes away." Chambers added: "Both mergers were ones that would have been extremely aggressive for us. We probably would not have merged with equals." Ascend announced this week its agreement to purchase Cascade Communications Corp. in a deal estimated at $3.7 billion. The move follows 3Com's pending merger with U.S. Robotics Inc. for a whopping $6.6 billion. "Chambers believes both transactions were spurred, at least in part, by the long list of networking companies that his own giant networking vendor has acquired," writes Ken Presti, Computer Reseller News Associate Editor. "The most recent addition to the network market leader's hit list was last month's purchase of Telesend Inc., previously a privately held xDSL company in Cupertino, Calif." "Once Cisco moved and 3Com saw how we were pulling away, they had to move, and once they moved, it became even more important for Ascend to move," Chambers added. "Think about it in terms of musical chairs. You almost have to move to stay a player, but if you move ineffectively, you miss having a chair to sit on, and if you move too slowly, there are no chairs left when the music stops." Chambers believes that the industry already has voted in favor of fewer vendors, or perhaps even a single vendor in major corporate enterprises. Published by CMP Media Inc., Computer Reseller News has a circulation of more than 115,000 and reaches influential readers from Wall Street to Silicon Valley with the product trends and industry news needed to sell comprehensive technology solutions. CMP Media Inc. provides publishing, marketing and information services to the broad high-technology spectrum -- the builders, sellers and users of technology -- through print and electronic media. All of CMP's publications and online products can be accessed through the company's TechWeb® site on the World Wide Web (http://www.techweb.com/). Along with Computer Reseller News, print titles include EE Times, Computer Retail Week, InformationWeek, and WINDOWS Magazine. -0- 4/1/97 SOURCE: CMP Media Inc. CONTACT: Catherine Jarrat Koatz, 516-562-7827, or ckoatz@cmp.com or |