Buying Talent Doesn't Always Pay Off

It's almost automatic now, after any high-tech acquisition: The CEO of the purchasing company will say "we didn't do this deal to buy a product, we did it for the people." On its face, that sounds honorable and respectful, but it doesn't answer the question of whether or not those people wanted to move.

In the latest example, Cisco's purchase of router startup Procket Networks seems to make good business sense. Even though Cisco strutted its home-grown expertise with the recent introduction of its CRS-1 core router, you can never have enough smarts when you're in a market where the battles are for multimillion-dollar sales.

But there have got to be at least a few ticked-off employees today, both at the former Procket and at Cisco itself. While I don't actually know anyone who works at Procket, it's not a far reach to suggest that some of the allure of working there was that it wasn't Cisco -- a big company with lots of bureaucracy, and internal wars for resources and attention.

On the Cisco side, if you're a router engineer, you have to feel a tad annoyed at the fact that your boss went out and hired a whole bunch of other router geeks, less than a month after your best effort was introduced. Hardly a vote of confidence in your work.

Over time, Cisco has made many of its acquisitions work, but it's also seen its share of flops. From a business standpoint, acquiring the assets of Procket right now might make good sense. But was it as strategic a move as Juniper's acquisition of NetScreen earlier this year? A lot of that depends on whether or not those "people" that Cisco wanted to acquire stay and help out. Until we hear from them -- and not just the smooth-talking CEOs -- we won't know how good or not this deal was.