Cisco Acquisition Machine Back In Business

When we asked last week in our online voting booth if enterprise users would rather wait to buy startups' products until Cisco bought the company, we didn't expect such an immediate response from the networking giant. Could it be a sign that the once-voracious Cisco acquisition machine is back in business?

Monday, Cisco snapped up another networking smallfry, adding Riverhead Networks' security smarts to its ever-expanding portfolio. In case you're counting (and we are), that's two acquisitions so far this year, following the March 12 purchase of another security vendor, Twingo Systems.

(A quick aside: Twingo? Riverhead? Are there really no good names left for startups anymore?)

While the Cisco Borg hasn't yet found a target as large as Juniper's industry-shaking acquisition of NetScreen Technologies, there's no reason to think that Cisco won't make some equally large purchase sometime in the near future. With almost $20 billion available in cash or short-term investments, Cisco's war chest is ready and able to accommodate any snapup its executives deem worthy.

Though startup valuations are starting to increase (one VC at the recent Network Outlook conference said his firm has actually lost a few recent deals by being outbid), it's still a buyer's market for big companies like Cisco, as they seek the innovative technologies that just never seem to emerge from huge conglomerates. Sure, if you want cutting-edge technical equipment you can still purchase from the startups directly, but in what seems like the beginning of an era of rapid consolidation, you may not have to wait too long to buy that same technology as a blade in a bigger company's switch.