Retired Cisco chairman gives $175 million to Wisconsin students

The Associated Press reports that retired Cisco Systems Inc. (NASDAQ: CSCO) chairman John Morgridge and his wife have given $175 million to help Wisconsin students pay for their college education at any public university in the state.

Morgridge is generous with his time as well. He gave me several interviews for my book, The Technology Leaders, explaining the logic behind Cisco's very successful acquisition strategy. Before he worked at Cisco, Morgridge was employed at Honeywell -- then a minicomputer company. Morgridge noticed that salespeople, say, those responsible for selling to New England banks, were loyal to their commissions, not their employer.

So when a new company came up with a product that those New England banks wanted to buy, the salespeople would go work for the new company so they could keep their commissions flowing. Cisco's acquisition strategy was designed to keep that from happening to Cisco. So if a Cisco customer wanted to buy a piece of networking equipment from a company other than Cisco, Cisco would buy the company. This proved to be a brilliant strategy for Cisco and its shareholders.

In my judgment, Morgridge is a really good person and I have no doubt that Wisconsin students will be proud beneficiaries of his generosity and the acquisition strategy that made it possible.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Cisco Systems.