Cobalt Networks was a maker of low-cost Linux-based servers. Founded in 1996, the company pioneered easy-to-use server appliances featuring secure web user interfaces, designed for Internet service providers (ISPs) and small to medium-sized businesses.
When Sun Microsystems acquired Cobalt Networks in 2003, Sun ended up with a portfolio of 40 products. The resulting brand portfolio was massive and required excessive and redundant manpower, resources, and budgets to maintain. Therefore, the company launched the dual brand "Sun Cobalt" and ultimately, reduced the portfolio to just 28 products. Some were combined. Others were sold. In the end, the new Sun product portfolio was stronger overall.
Dual branding helps a lesser known acquired brand like Cobalt gain quicker recognition, consumer trust, and recall. It's also less expensive to market a lesser known or unknown brand under an established brand name.
Brand merger and acquisition decisions are ones that shouldn't be made without adequate market research to better understand how consumers perceive both brands post-merger.
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