Tomahawk, WI 01/30/2014 (BasicsMedia) – With each passing day, older technology firms such as Cisco Systems, Inc. (NASDAQ:CSCO) face a major battle to remain relevant in the face of intense competition from newer entities. If you look at Cisco in the current setting, you may not think that this is what is happening, because all that you will see is a Silicon Valley giant making newer acquisitions. However, a closer look at these companies beyond what is clear for all to see will show you that Cisco Systems Inc and other major but older Silicon Valley giants are doing this in an effort to hide their weaknesses.

As long as the current level of competition continues, CSCO will feel the urge to enter into new deals with other companies, no matter how desperate it makes them to appear. Cisco recently posted news to the effect that its revenues will keep dropping deep into the middle of 2014. As it is often the case with such projections, the bad news could end sooner or go beyond the period that CSCO issued. However, Cisco is not alone in this regard, since it is in good company in the form of IBM, HP, Oracle, and even the mighty Google, as well as Apple to mention a few.

When a company starts posting consistently poor financial results, especially where sales are concerned, this can only mean one thing; that its best days are behind. This is the perception that Cisco has to work hard to reverse, lest it suffers loss of investor confidence, which would then come with its own challenges. If you want a case study in whether this is true for technology-based firms, you need not look further than BlackBerry, which believed it would never be affected by the huge volumes of iPhone sales, and when it realized, it was too late to do much.

Cisco can still reverse some of the losses it has been experiencing by making newer acquisitions and embarking on cost-cutting measures, which are very popular with technology firms. Takeovers are never the best way to show the market that you are doing well, no matter how hard you try. Take HP for instance, which has been forced to write down close to $18 billion worth of M&A, in the last three to four years. Therefore, even if Cisco was to take this route, it is not a guarantee of success, nor does it create as much assurance as it would like to investors.

In summary, Cisco Systems Inc may yet embark on this train of thought and take actions that make it appear younger and vibrant than it is. The challenge for investors is to find ways of cushioning their investments in case by action that CSCO takes fails to produce the desired results. Cisco should not ignore what is happening in the tech world. It owes its clients a determined effort to keep giving them good returns on investments. If the right deal comes along, Cisco should not be afraid to take it, as long as the long-term returns are good for investors.

DISCLAIMER: This content is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.