Cisco Systems hopes to bring its advanced networking technology to products from its upcoming acquisition of Linksys Group when it can do so without charging a premium over Linksys' low-end prices, a Cisco executive said Tuesday.
Cisco, the dominant provider of network equipment to large enterprises, last month agreed to buy Linksys, a major vendor of network gear for homes and small businesses. The deal will let it reach small companies and make them Cisco customers when they need more sophisticated networks, said James Richardson, Cisco's senior vice president and chief marketing officer, in an interview at the Cisco Partner Summit in Las Vegas.
The acquisition is not expected to be formalized until Cisco's fourth fiscal quarter, which ends in July, and Linksys will continue to operate as an independent unit after the deal closes. It will remain a low-priced networking brand for small offices, home offices and consumers, Richardson said. However, Cisco is eyeing opportunities to both expand the business and link its products to Cisco's, he added.
Richardson sees Linksys as carrying a label that associates it with Cisco, such as "Linksys, a Cisco company," but the products will remain low-priced and relatively simple to appeal to the company's current customer base. As small companies using Linksys grow into larger enterprises that want more sophisticated capabilities such as higher security, IP (Internet Protocol) telephony or content networking, they'll make the connection and step up to Cisco products, he said.
However, where it doesn't add to the cost, Cisco also is likely to beef up the capabilities of Linksys products, he said.
"I'm never going to put a 10,000-gate ASIC (application-specific integrated circuit) in my Linksys router, because it drives the cost out of whack ... However, where we may come up with a chipset that does secure wireless, that code can be shared and it's no incremental cost to Linksys, my assumption will be that we will integrate that technology into that platform," Richardson said. That sort of technology would make the Linksys product compatible with Cisco's wireless product line and also be a strong differentiator for Linksys in the low-end market, he said.
"We're going to leverage as much of Cisco at a low cost as we can," Richardson said.
Cisco also intends to expand the line into countries outside North America where possible, working through Cisco's foreign units, he said.