It makes sense that a major shake-out is going to occur as Cisco, IBM, HP and Oracle/SUN all try to create full HW/SW portfolios. Will Brocade, Juniper, F5 Networks, Riverbed or BlueCoat be around on their own in the next few years? Probably not. Will IBM, HP, Oracle/SUN buy the networking guys to attack Cisco? Would you? Yep. Cisco has the most wood to chop from that perspective. Can Cisco truly ramp its data center stack and gain share before HP, IBM and others snap-on the networking acquisitions to hammer Cisco? I’m guessing the momentum is against Cisco in that regard. In addition, when a CIO considers upgrading data center infrastructure, they don’t call the networking guy, they call the server guy. If I’m a CIO, I’m calling HP, IBM and Dell that own the market. Not Cisco. If Cisco bought Dell, they would immediately have street cred in the x86/64 market which they need more than anything. Also, Dell’s primary strength is in the commercial market and has the ability to dent IBM and HP. I think Sun has too many headwinds going against it. Nice try Oracle? You’re also too expensive.

A few things are going to happen in the future. First, Networking will commoditize and there’s nothing Cisco will be able to to about it. Can they gain scale in their 30 adjacencies before HP and others dilute their dominance on the networking side? That’s one heck of a tough bet when the top OEMs now want to hand your wazoo to you on a platter. Second, I think it would make more sense for Cisco to acquire a Dell over EMC. Why? Because Microsoft’s Hyper-V is going to hammer VMWare in the future and Dell is going to continue making acquisitions on the SAN/NAS front to hammer EMC. Therefore, I think Cisco will eventually become an IT services/software company similar to IBM and HP (they’re hoping). Also, if you’re Cisco, if cloud computing takes off the way everyone believes it will, thin-clients and notebooks will rule the world (HP’s vision). Cisco will not only be able to sell the storage, server, software, but will also be able to sell the information worker stuff. Also, John Chamber’s replacement will have to be an operations guy like Mark Hurd to squeeze every basis point out of every division and process. Then again, I did have way too much to drink at the BBQ tonight ;^)

Best,

-M

Its been a long time since the Cisco Network Management VT, hope all is well.

Got to disagree with you on this one fairly strongly. Reasons are many. I see little to no alignment of the vision of Dell with Cisco’s. John has laid out a fairly long term strategy on where Cisco is going and how they plan to get there – exactly what is Dells business strategy (need a washing machine – specials today at Dell.com).

Cisco is somewhat consumer (Linksys – but the brand grows weaker), Enterprise (they own the space) and SP focussed (but they seem to be surrendering this space). Dell does well in Consumer, but is loosing in ever other of these spaces. Dell offers Cisco nothing in Enterprise. They have none of the high touch resources that these customers demand aligned to drive business and have never successfully changed there sales models to achieve this. Effectively they offer Cisco nothing in terms of market.

I do not see any cultural alignment between Dell and Cisco? Dell a culture of ego? Cisco a culture of technology/sales? Have you looked at the leadership at Dell vs Cisco – how do you see this happening?
Certainily while Cisco culture has evolved from its origianal technology/entreprenial one over the years, it is still radically different from the culture of Michael Dell that pervades and stagnates that company.

When you look at the product mix from Dell, how is it radically different from any other player in this space. Frankly why would Cisco want to play in such a commodotized low margin business and put its future in the hands of Microsoft? If they really really had to go into this space they would be better looking at companies with some growth potential in Asia – Acer or Lenovo, than Dell.

Cisco have a really tough path to tread with the “new” relationships or lack thereof they will be having with IBM and HP. Dell is not going to help them here one iota.

Paul

What is happening between Cisco and HP are 1 billion dollar skirmishes in a third of a trillion addressable market for these two. Our Hollywood culture attuned minds always want to see Megatron take on Optimus Prime. It aint so. It aint so.

Cisco’s entry was in the virtualized server space a part of the market growing almost 100% a year. It does not matter how much sense a merger makes. If it is to acquire a company whose market is barely growing like enterprise servers Cisco is not interested unless it feels its survival is at stake. Which it is not.

Cisco will use this downturn as it has used all downturns to invest in companies that give it an edge when the economy comes roaring back. Virtualized DC is a seismic IT shift it had to leap into to remain significant in the future to its current mega end users. Similarly it moved into Unified Communications to remain relevant to how the people with those end users interacted. Now I suspect you will see Cisco moving into an area that allows it to understand how these end users think while making budgets.

So think Accenture if you wnat to think of a radical acquisition for Cisco. Not Dell.

cisco will buy netapp first. dell much later after they sink further