Building to a Crescendo
Cisco's first acquisition occurred in September of 1993 when it bought networking start-up Crescendo for about $90m. Since 1993, Cisco has bought close to 110 companies.
Out of that 110, it would be tough to find a better buy than Crescendo.
Crescendo opened up the LAN (local area network) switch market to Cisco, and the company has since turned the Catalyst line of products acquired from Crescendo into a multi-billion dollar per year business. Beyond the hardware, Cisco also acquired some key talent when it bought Crescendo - namely Mario Mazzola, Luca Cafiero, Prem Jain and Buck Gee.
The case of Mazzola and his relationship to Cisco's Chambers is of particular interest to our tale.
According to our sources, Chambers, then a vice president of sales at Cisco, had the entire Crescendo team report directly to him, forming a tight bond with the group. As the Catalyst gear took off, the former Crescendo executives rose through Cisco's ranks and made Chambers look good on their way. Mazzola surged to the post of chief development officer, while Chambers went on to become CEO.
In 2001, Mazzola announced plans to retire from Cisco and an internal memo circulated to that effect, according to a BusinessWeek story titled "Cisco's Comeback" written in late 2003. The story, along with other press accounts, claims that Chambers begged Mazzola to "come back" to Cisco before he even left. Chambers proved persuasive, and Mazzola stayed.
Mazzola had been shepherding a group of about 30 engineers who were working on an extension to Cisco's switch product line. Those engineers and executives Gee, Cafiero and Jain would break off to form Andiamo. As stated before, the folks involved with Andiamo were turned into multi-millionaires by Cisco, although the company has maintained that Mazzola, still at Cisco, did not profit from the deal.
Our sources indicate that the Andiamo staff did not even leave Cisco's campus. They, in fact, maintained Cisco security badges through the spin-in process.
In 2005, stories broke saying that Cisco's storage brass - the Crescendo and Andiamo crew - had retired en masse. Mazzola, Cafiero and Jain departed as did Soni Jiandani, the VP of storage marketing, who reported to Cafiero. Ah, but the executives didn't really retire, they went off to form Nuova - then called Nuova Impressa - according to a report in Byte and Switch.
Already wealthy, this group of Cisco veterans had enough cash to self-fund Nuova, stopping greedy venture capitalists from diluting their shares. They also managed to leave Cisco's offices this time and set up a new office in Santa Clara.
Our sources indicate that Nuova Impressa - notice the Italian name again following Mazzola around - actually rebuffed Cisco's initial attempts at an investment. Such hesitation didn't last long though, as you can see by yesterday's announcement. Once again, the Crescendo and Andiamo crowd will be getting rich.