A Cloud Space Acquisition Spree?

Cisco has employed a strategy of diversifying its operations by focusing more on SDN (software defined networks) and security services and by reducing its dependency on specialized routers and switching equipment. In fiscal 2Q16, Cisco’s Security segment rose by 11% to $462 million.

To improve its position in the networking space, in November 2015, Cisco Systems and Ericsson ParStream(ERIC) announced a strategic partnership that could help both companies realize synergies of $1 billion by 2018. In fiscal 2015, Cisco announced acquisitions of Lancope, OpenDNS, Pawaa Software, Portcullis, and in November 2015, Cisco Systems and Ericsson ParStream to boost its position in security, data analytics, and video space. Given the growth in these segments in recent fiscal 2Q16, it appears that Cisco’s strategy is on its way to yielding results.

To promote its presence in video cloud space IBM acquired Clearleap, a video services company. Clearleap’s technology has been put to use by Time Warner’s (TWX) HBO, Sony Movie Channel, BBC America, and Time Warner Cable (TWC).

Investors looking to gain exposure to Cisco Systems can consider investing in the iShares Core S&P 500 ETF (IVV), which has an exposure of ~7.5% to application software and invests ~0.8% of its total holdings in Cisco.

View more information: https://marketrealist.com/2016/03/cisco-2016-cloud-space-acquisition-spree/

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