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
Digital Transformation is much more than a buzzword. The radical shift to digital mechanisms for almost every process is evident across all industries and verticals. This is often especially true in financial services, where the legacy environment is many times unable to keep up with the rapidly shifting demands of the consumer. The constant pressure to provide complete, omnichannel delivery of customer-facing solutions to meet both regulatory and customer demands is putting enormous pressure on...
The best way to leverage your CloudEXPO | DXWorldEXPO presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering CloudEXPO | DXWorldEXPO will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at CloudEXPO. Product announcements during our show provide your company with the most reach through our targeted audienc...
DXWorldEXPO LLC announced today that All in Mobile, a mobile app development company from Poland, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. All In Mobile is a mobile app development company from Poland. Since 2014, they maintain passion for developing mobile applications for enterprises and startups worldwide.
"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.
JETRO showcased Japan Digital Transformation Pavilion at SYS-CON's 21st International Cloud Expo® at the Santa Clara Convention Center in Santa Clara, CA. The Japan External Trade Organization (JETRO) is a non-profit organization that provides business support services to companies expanding to Japan. With the support of JETRO's dedicated staff, clients can incorporate their business; receive visa, immigration, and HR support; find dedicated office space; identify local government subsidies; get...
"We view the cloud not as a specific technology but as a way of doing business and that way of doing business is transforming the way software, infrastructure and services are being delivered to business," explained Matthew Rosen, CEO and Director at Fusion, in this SYS-CON.tv interview at 18th Cloud Expo (http://www.CloudComputingExpo.com), held June 7-9 at the Javits Center in New York City, NY.
DXWorldEXPO LLC announced today that the upcoming DXWorldEXPO | CloudEXPO New York event will feature 10 companies from Poland to participate at the "Poland Digital Transformation Pavilion" on November 12-13, 2018.
The current age of digital transformation means that IT organizations must adapt their toolset to cover all digital experiences, beyond just the end users’. Today’s businesses can no longer focus solely on the digital interactions they manage with employees or customers; they must now contend with non-traditional factors. Whether it's the power of brand to make or break a company, the need to monitor across all locations 24/7, or the ability to proactively resolve issues, companies must adapt to...
As data explodes in quantity, importance and from new sources, the need for managing and protecting data residing across physical, virtual, and cloud environments grow with it. Managing data includes protecting it, indexing and classifying it for true, long-term management, compliance and E-Discovery. Commvault can ensure this with a single pane of glass solution – whether in a private cloud, a Service Provider delivered public cloud or a hybrid cloud environment – across the heterogeneous enter...
DXWorldEXPO LLC announced today that ICC-USA, a computer systems integrator and server manufacturing company focused on developing products and product appliances, will exhibit at the 22nd International CloudEXPO | DXWorldEXPO. DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, in New York City. ICC is a computer systems integrator and server manufacturing company focused on developing products and product appliances to meet a wide range of ...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smart...
Major trends and emerging technologies – from virtual reality and IoT, to Big Data and algorithms – are helping organizations innovate in the digital era. However, to create real business value, IT must think beyond the ‘what’ of digital transformation to the ‘how’ to harness emerging trends, innovation and disruption. Architecture is the key that underpins and ties all these efforts together. In the digital age, it’s important to invest in architecture, extend the enterprise footprint to the cl...
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 ...
Headquartered in Plainsboro, NJ, Synametrics Technologies has provided IT professionals and computer systems developers since 1997. Based on the success of their initial product offerings (WinSQL and DeltaCopy), the company continues to create and hone innovative products that help its customers get more from their computer applications, databases and infrastructure. To date, over one million users around the world have chosen Synametrics solutions to help power their accelerated business or per...
Dion Hinchcliffe is an internationally recognized digital expert, bestselling book author, frequent keynote speaker, analyst, futurist, and transformation expert based in Washington, DC. He is currently Chief Strategy Officer at the industry-leading digital strategy and online community solutions firm, 7Summits.
We are seeing a major migration of enterprises applications to the cloud. As cloud and business use of real time applications accelerate, legacy networks are no longer able to architecturally support cloud adoption and deliver the performance and security required by highly distributed enterprises. These outdated solutions have become more costly and complicated to implement, install, manage, and maintain.SD-WAN offers unlimited capabilities for accessing the benefits of the cloud and Internet. ...
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...
Bill Schmarzo, author of "Big Data: Understanding How Data Powers Big Business" and "Big Data MBA: Driving Business Strategies with Data Science," is responsible for setting the strategy and defining the Big Data service offerings and capabilities for EMC Global Services Big Data Practice. As the CTO for the Big Data Practice, he is responsible for working with organizations to help them identify where and how to start their big data journeys. He's written several white papers, is an avid blogge...
Founded in 2000, Chetu Inc. is a global provider of customized software development solutions and IT staff augmentation services for software technology providers. By providing clients with unparalleled niche technology expertise and industry experience, Chetu has become the premiere long-term, back-end software development partner for start-ups, SMBs, and Fortune 500 companies. Chetu is headquartered in Plantation, Florida, with thirteen offices throughout the U.S. and abroad.
Bill Schmarzo, author of "Big Data: Understanding How Data Powers Big Business" and "Big Data MBA: Driving Business Strategies with Data Science," is responsible for setting the strategy and defining the Big Data service offerings and capabilities for EMC Global Services Big Data Practice. As the CTO for the Big Data Practice, he is responsible for working with organizations to help them identify where and how to start their big data journeys. He's written several white papers, is an avid blogge...