Cisco's New Era of Internal Venturing

Last Updated Aug 20, 2007 7:04 PM EDT

Cisco's New Era of Internal VenturingThe average consumer doesn't pay much attention to the fact that people actually have to build the Internet. But that's all Cisco thinks about, and it takes a constant stream of new ideas and technologies to keep the Internet moving forward. How does the $30 billion company keep ideas streaming and -- more importantly -- turn them into new products? Cisco must have taken a hint from the BNET Feature Package: Cultivating New Ideas, because it just announced a new internal venturing group whose charter, simply, is to develop billion-dollar businesses inside the company:
At a pivotal point in its 23-year history, the San Jose, Calif., networking equipment manufacturer has launched its first formal "internal venturing" operation, a group dedicated to hatching all-new billion-dollar businesses from within the company. The concern, known as the Emerging Technology Group (ETG), is an unprecedented effort for Cisco, which has traditionally expanded through acquisitions, partnerships, and by augmenting existing product lines.
The company has always emphasized research and development, now with a $4 billion annual budget and dedicated facilities throughout the world. But these efforts aim to invent the technologies of the future. ETG focuses on the alchemy of quickly turning today's ideas into tomorrow's moneymaking products. [...]
Cisco hopes ETG's success will also put to rest what Cisco executives see as a damaging misconception. Despite its two decades of historic business and technological achievements some industry observers tend to discount the networking leader's in-house innovations because of its many acquisitions.
"Many acquisitions" may be an understatement. The networking titan has acquired more than 115 companies, and just last month it completed the assimilation of online collaboration firm WebEx. For years Cisco has been the tech industry leader in acquisitions, but Google recently took the most-prolific-gobbler award as it snapped up Peakstream and Feedburner. How does this relate to Cisco's new ETG? It may indeed be the sign of a new focus on internal growth.

(Image of Cisco Telepresence Meeting by Cisco Systems)