Report: Cisco Shopping Linksys, WebEx Units8:16 AM EST Thu. May. 19, 2011
Cisco is reportedly close to selling off its Linksys home networking business as part of an ongoing corporate restructuring, and the sale of its WebEx collaboration platform may follow.
Citing unnamed sources said to be familiar with the situation, The Register on Wednesday reported that the moves could come as early as next week.
Industry watchers are closely scrutinizing Cisco following several quarters' worth of disappointing earnings reports and a number of recent public relations headaches.
Cisco has said it will look to eliminate $1 billion in expenses over the next fiscal year and make cuts in underperforming business units. It has also promised layoffs, in numbers most analysts expect to be between 3,000 and 5,000 employees.
Cisco already began its restructuring effort several weeks ago, shuttering its Flip camera business as part of sweeping changes to its struggling consumer unit. Cisco has also changed its much-criticized management structure of councils and boards and re-organized its worldwide field operations and services organizations.
The changes to Cisco come following a candid memo from Cisco Chairman and CEO John Chambers in early April, in which Chambers said Cisco had disappointed investors, confused employees and lost credibility in the marketplace.
Both the Linksys and WebEx businesses came to Cisco via acquisition: Linksys in 2003 for $500 million in stock and WebEx Communications in 2007 for $3.2 billion.
The Linksys unit is no longer of much material interest to the channel; Cisco rebranded its small business-focused products as Cisco in 2008 and the Linksys moniker has since been used exclusively for consumer- and home-focused products.
WebEx, on the other hand, is a key piece of Cisco's collaboration strategy and an increasingly important sales opportunity for many Cisco solution providers. WebEx is currently available to any Cisco Small Business or Express Foundation specialized partners, and also those partners designated Express-UC or Advanced-UC. According to Cisco, that partner base comprises over 10,000 solution providers.
Earlier this spring, Cisco made WebEx sales available eligible for profitability payments under Cisco's Partner Development Funds (PDF) and Value Incentive Program (VIP).
Cisco did not immediately respond to a request by CRN seeking comment. According to The Register, a Cisco spokesman said Cisco would not "comment on rumor and speculation."