Welcome!

Log Management Authors: Dana Gardner, Pat Romanski, Elizabeth White, David H Deans, Carmen Gonzalez

RSS Feed Item

M&A Real-Time Analysis: Why would Cisco want to buy EMC

Because they have to get into the adjacent markets. Well it is still IT and eventually how does it matter, to even the IT geeks, if the stuff is in the network or storage or some sort of abstraction layer (which you and I fondly call virtualization). Cisco's chief John Chambers has said again and again, as if to convince the board members that "a mega-acquisition has just gotta happen or else we'll die", that earnings will erode over time as the world goes to a much on-demand computing.

The obvious dangers of the on-demand computing is that the sales guys will not be able to sell anymore, at least not the kind of stuff that they sold in the past. The real, tangible stuff, we call hardware with all those processors and disks all jammed in. Obviously the stuff to be sold will be done by some smarter folks, meaning the versatile consultants or what I often call here versatilists (coined by Gartner, to be fair here). So good-bye sales guys and welcome the savvy consultant (a hard find by the way). This is again not going to be enough in a market where competition is rising, cost-cuts intensify and customers are too busy looking for quick gains and even tying up with newcomers.

Anyways so the problem (err..challenge) is pretty much clear. Cisco (and others as well) knew this long time ago. Cisco has gone for a bid long time back. Looking at this news article from July 2005:

From Cisco's perspective
The San Jose-company has saturated the networking market, but still has to grow. However, its choices are limited. Microsoft owns the desktop. The server market is commoditized by IBM, Dell and HP with IBM taking the lion's share of the services business. This leaves storage, which happens to be the only growth area left.

Buying EMC would give Cisco another chunk of the enterprise and tremendous sway with customers. Its mantra for some time has been that users want fewer suppliers to deal with and products from companies that they can be sure will be around a year from now.

Cisco would also like to see as much functionality as possible moved into the network, including storage applications, which it has slowly been tapping away at for a while. With 10 Gigabit Ethernet on the horizon, Cisco might also have its sights set on finally nailing the coffin on Fibre Channel, to bring storage networking and data networking together over the same pipe. Buying EMC could put an end to Fibre Channel diehards Brocade and McData in one fell swoop. There'll be no such thing as a SAN company anymore. Cisco would probably say who cares if it's IP or FC or telephony anyway, as long as it's always available, secure and runs everything?

From EMC's perspective
The company's shareholders get a healthy premium. Looked at another way, what is EMC's risk in not doing this deal? It may be at the top of its game right now, but what does the future hold? Can it really be a major software player outside its customer base in an industry where proprietary barriers to heterogeneity are still significant? Can it ultimately triumph in the midrange, which is clearly going to be the heart of the market for at least 5 years, against more technically and commercially aggressive players?

Before the going gets tough, EMC CEO Joe Tucci has the chance to sell the company to Cisco, exit on a high note and probably earn himself a fat $200 million or so in the process.


So the dilemma here is simple. Cisco gets into yet another fast-becoming commodity market and EMC's five-year long flat revenue gets a 4-week long boost. I think the change in management and eventually someone standing up and doing something worthwhile with some great technologies and acquisitions (including VMware) may be the key to such an acquisition initiative.

Virtualization is a very rich market and a lot will happen as well move towards the clouds. Evnetually firms like Microsoft too are prone to go for some mega-aquisitions such as that of Symantec (I'll explain in another article why that may be interesting for Microsoft and Symantec). Reactive and poor judgement has led to several firms starting to gnaw away at the market share of VMware and EMC as well. That needs to be injected with some fresh blood and visionary leadership.

There is enough to be done. Funny thing is if you compare the analysis of way back then and now, nothing much has changed. Maybe the overgrown bubble, the credit crisis owing to housing sham has only aggravated the spending, surge in oil prices has killed the buying power of the consumers and a devaluation of US dollar against currencies such as euro, 0.99 in 2002 to 1.6 now has made the consumer hard to find a way out of the conventional spending they did way back in past. When HP-EDS deal was announced we knew something had changed. I drew the HW-SW-SI-Sourcing circle quickly to explain why completing the circle is crucial to feed the global market.


Globally Deliverable, Converged Services


What happens in such an acquisition spree is that firms have to take major risks to advance towards the converged business model. This has to then be delivered over the internet, via Cloud Applications and Services or whatever we'll call it when we get there. As you can see clearly that Cisco is just looking at that very single quadrant we call HW, just in this case, with VMware and other software houses such as RSA, Documentum etc it also sneaks gradually towards the SW quadrant. HP-EDS's deal has been scorned at and a lot of dropouts were/are expected but eventually we don't know that may be the best thing that HP ever did.

It is not so much about making a statement by doing the multi-billion dollar deal but it is about the walling-in that firms have to watch out for. The market cruch and continued consolidation eventually means that too many players will be a thing of the past.

So should Cisco buy EMC, the answer maybe yes and maybe, but the eventual answer may still be yes. It is not easy to be found naked in the alley where things are being sold dime a dozen, the commoditization of services will eventually render stuff like networking, OS, etc hardware absolutely irrelevant. The talks could very well mean to take ownership of VMware but EMC may want all of it to be sold, to which Cisco may have objections.

Bottom line: No matter what the issues may be, it is time to realize that the consolidation is the law. Should you be driving it or be driven by it. The goal is far greater, it is to serve the community driven, highly aspirational global market.

Read the original blog entry...

@ThingsExpo Stories
DX World EXPO, LLC, a Lighthouse Point, Florida-based startup trade show producer and the creator of "DXWorldEXPO® - Digital Transformation Conference & Expo" has announced its executive management team. The team is headed by Levent Selamoglu, who has been named CEO. "Now is the time for a truly global DX event, to bring together the leading minds from the technology world in a conversation about Digital Transformation," he said in making the announcement.
"Space Monkey by Vivent Smart Home is a product that is a distributed cloud-based edge storage network. Vivent Smart Home, our parent company, is a smart home provider that places a lot of hard drives across homes in North America," explained JT Olds, Director of Engineering, and Brandon Crowfeather, Product Manager, at Vivint Smart Home, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that Conference Guru has been named “Media Sponsor” of the 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. A valuable conference experience generates new contacts, sales leads, potential strategic partners and potential investors; helps gather competitive intelligence and even provides inspiration for new products and services. Conference Guru works with conference organizers to pass great deals to gre...
The Internet of Things will challenge the status quo of how IT and development organizations operate. Or will it? Certainly the fog layer of IoT requires special insights about data ontology, security and transactional integrity. But the developmental challenges are the same: People, Process and Platform. In his session at @ThingsExpo, Craig Sproule, CEO of Metavine, demonstrated how to move beyond today's coding paradigm and shared the must-have mindsets for removing complexity from the develop...
In his Opening Keynote at 21st Cloud Expo, John Considine, General Manager of IBM Cloud Infrastructure, led attendees through the exciting evolution of the cloud. He looked at this major disruption from the perspective of technology, business models, and what this means for enterprises of all sizes. John Considine is General Manager of Cloud Infrastructure Services at IBM. In that role he is responsible for leading IBM’s public cloud infrastructure including strategy, development, and offering m...
"Evatronix provides design services to companies that need to integrate the IoT technology in their products but they don't necessarily have the expertise, knowledge and design team to do so," explained Adam Morawiec, VP of Business Development at Evatronix, in this SYS-CON.tv interview at @ThingsExpo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
To get the most out of their data, successful companies are not focusing on queries and data lakes, they are actively integrating analytics into their operations with a data-first application development approach. Real-time adjustments to improve revenues, reduce costs, or mitigate risk rely on applications that minimize latency on a variety of data sources. In his session at @BigDataExpo, Jack Norris, Senior Vice President, Data and Applications at MapR Technologies, reviewed best practices to ...
Widespread fragmentation is stalling the growth of the IIoT and making it difficult for partners to work together. The number of software platforms, apps, hardware and connectivity standards is creating paralysis among businesses that are afraid of being locked into a solution. EdgeX Foundry is unifying the community around a common IoT edge framework and an ecosystem of interoperable components.
Large industrial manufacturing organizations are adopting the agile principles of cloud software companies. The industrial manufacturing development process has not scaled over time. Now that design CAD teams are geographically distributed, centralizing their work is key. With large multi-gigabyte projects, outdated tools have stifled industrial team agility, time-to-market milestones, and impacted P&L stakeholders.
"Akvelon is a software development company and we also provide consultancy services to folks who are looking to scale or accelerate their engineering roadmaps," explained Jeremiah Mothersell, Marketing Manager at Akvelon, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
"IBM is really all in on blockchain. We take a look at sort of the history of blockchain ledger technologies. It started out with bitcoin, Ethereum, and IBM evaluated these particular blockchain technologies and found they were anonymous and permissionless and that many companies were looking for permissioned blockchain," stated René Bostic, Technical VP of the IBM Cloud Unit in North America, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Conventi...
In his session at 21st Cloud Expo, Carl J. Levine, Senior Technical Evangelist for NS1, will objectively discuss how DNS is used to solve Digital Transformation challenges in large SaaS applications, CDNs, AdTech platforms, and other demanding use cases. Carl J. Levine is the Senior Technical Evangelist for NS1. A veteran of the Internet Infrastructure space, he has over a decade of experience with startups, networking protocols and Internet infrastructure, combined with the unique ability to it...
22nd International Cloud Expo, taking place June 5-7, 2018, at the Javits Center in New York City, NY, and co-located with the 1st DXWorld Expo will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud ...
"Cloud Academy is an enterprise training platform for the cloud, specifically public clouds. We offer guided learning experiences on AWS, Azure, Google Cloud and all the surrounding methodologies and technologies that you need to know and your teams need to know in order to leverage the full benefits of the cloud," explained Alex Brower, VP of Marketing at Cloud Academy, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clar...
Gemini is Yahoo’s native and search advertising platform. To ensure the quality of a complex distributed system that spans multiple products and components and across various desktop websites and mobile app and web experiences – both Yahoo owned and operated and third-party syndication (supply), with complex interaction with more than a billion users and numerous advertisers globally (demand) – it becomes imperative to automate a set of end-to-end tests 24x7 to detect bugs and regression. In th...
"MobiDev is a software development company and we do complex, custom software development for everybody from entrepreneurs to large enterprises," explained Alan Winters, U.S. Head of Business Development at MobiDev, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
Coca-Cola’s Google powered digital signage system lays the groundwork for a more valuable connection between Coke and its customers. Digital signs pair software with high-resolution displays so that a message can be changed instantly based on what the operator wants to communicate or sell. In their Day 3 Keynote at 21st Cloud Expo, Greg Chambers, Global Group Director, Digital Innovation, Coca-Cola, and Vidya Nagarajan, a Senior Product Manager at Google, discussed how from store operations and ...
"There's plenty of bandwidth out there but it's never in the right place. So what Cedexis does is uses data to work out the best pathways to get data from the origin to the person who wants to get it," explained Simon Jones, Evangelist and Head of Marketing at Cedexis, in this SYS-CON.tv interview at 21st Cloud Expo, held Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that CrowdReviews.com has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5–7, 2018, at the Javits Center in New York City, NY. CrowdReviews.com is a transparent online platform for determining which products and services are the best based on the opinion of the crowd. The crowd consists of Internet users that have experienced products and services first-hand and have an interest in letting other potential buye...
SYS-CON Events announced today that Telecom Reseller has been named “Media Sponsor” of SYS-CON's 22nd International Cloud Expo, which will take place on June 5-7, 2018, at the Javits Center in New York, NY. Telecom Reseller reports on Unified Communications, UCaaS, BPaaS for enterprise and SMBs. They report extensively on both customer premises based solutions such as IP-PBX as well as cloud based and hosted platforms.