Microsoft's present is Cisco's future. Cash rich but without any innovation. Just copying whatever the new kid on the block is doing. It's just one paradigm-shift away from obsolescence.
There's just a huge difference between the way those two companies do business. Microsoft builds things. Cisco buys them. They may have comparable positions in their respective sectors, but they have utterly unrelated business development models.
Cisco does build things. Lots of switches and routers, they are all built in China by Foxconn. I think what you mean to say is that Microsoft is a software company while Cisco is a hardware company. Two different ways of doing business.
No: what he means is that Cisco buys other companies - its growth has been fueled by continual acquisition of other companies. See the 170 references at the end of http://en.wikipedia.org/wiki/List_of_acquisitions_by_Cisco_S... most of which are about single companies acquired by Cisco.