Could Cisco be the next company to split?

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Could Cisco be the next company to split?

Just hours after Hewlett-Packard confirmed plans to split itself in two, investment firm and analyst group RBC Capital Markets urged Cisco Systems to do the same.

According to Mark Sue, managing director and senior technology equity research analyst at RBC, the US$48 billion networking giant is simply too big for its own good and lacks the agility needed to compete with "an onslaught of nimble players".

"Our surveys show Cisco has too many people, often takes too long to get things done and has become reactive to changing market dynamics," Sue wrote in a research note, according to a report Monday US time from Barron's.

"Big layoffs and restructuring have become routine for the past four years. A more proactive change may kick Cisco's underperforming stock into gear."

Sue specifically suggested Cisco separate its core routing, switching and services business from its cloud computing division. He said the core networking and services group could operate as "Cisco Solutions," while the cloud unit, or "Cisco Cloud," could house the company's cloud wireless, security and data center offerings.

"Cisco Cloud could pursue bold deals to acquire early stage tech companies and invest in R&D to drive growth from new technologies and solutions without concerns about cannibalizing Cisco’s legacy platforms," Sue wrote.

Cisco in March created a dedicated business unit around its Intercloud hybrid cloud strategy, called the Cisco Cloud Sales and Go-To-Market division. The new group is head by Nick Earle, Cisco's former senior vice president of Worldwide Services Operations, and sits within its broader services group.

Cisco did not immediately respond to CRN US' request for comment.

HP's split into two independent companies - one focused on its PC and printing business and one its Enterprise Group - is one of several recent breakups in the high-tech world. Just last week, eBay revealed plans to spin off its PayPal business, while networking vendor Juniper Networks just completed the sale of its Junos Pulse mobile security group.  

This article originally appeared at crn.com

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