Cisco Systems is to go on a shopping spree, accelerating its company-acquisition efforts at a time when the Meltdown has depressed equity values worldwide. Tech companies are a bargain these days. IBM, meanwhile, is unhappy that the Cisco networking giant has turned its attention to server blades - witness IBM's interest in …
Could Cisco have been the alternative buyer of Sun?
Cisco could make a lot out of Sun. Considering that they want to get in to the server arena.
Depending on which report you've read, one of the rumored reasons why the IBM/Sun merger talks failed was that IBM wanted to be the only bidder.
If Cisco steps up to the plate, you can bet IBM will be quick to counter.
West Coast companies. Complimentary product lines. Sun has been doing a lot of identity management projects for large companies. This could get Cisco to their consolidated network services platform very quickly. But what to do with all those extra Sun sales folks and managers?
"But what to do with all those extra Sun sales folks and managers?"
You really think that is what's worrying anyone involved or did you forget to put the joke icon on your post.
As you (should) know the extra Sun sales folks and managers will become assets to be used in driving down costs after realising the many synergies which exist between the disparate parts of both companies.
CISCO need to diversify
Despite the bluster about the downturn being good for them, CISCO need new money-making opportunities and fast. Their traditional networking business is under a lot of pressure. Hp claim ProCurve has swiped 26+% of the installed CISCO LAN switch bizz, which will mean a big drop in revenues; Brocade seem to have defeated CISCO's attempts to take over the SAN switch market; and FCOE has not arrived yet and it looks like Brocade will have a good enough counter to stop it being the clean-sweep CISCO planned it to be, and may end up being a new threat to that installed LAN switch bizz. The move into virtualised blades is getting lots of press but it still has to prove itself against the big three blades vendors - hp, IBM and Dell - and CISCO is new to selling servers.
CISCO does have a big pot of cash, but with falling revenues they may want to keep a chunk of that as rainy-day money until the recession lifts. So they will look for companies that have developed new tech but haven't had the money or presence to take it to market. Tech that would give CISCO an edge, be quick and easy to integrate, and not cost the Earth. Which is why I don't think they'll be looking at Sun.
Anyone looking to buy Sun is going to have to go through a mountain of painful assessment and whittling away of the deadwood - or just the unwanted wood - before they get down to the stuff they want. Any bit they can't sell on they are lumbered with, and will have to resort to expensive redundancies and closures to get rid of. ID management is a tiny bit of Sun, as is any of the other software. CISCO don't need Slowaris, they already have the ability to write their own full OS if required, but are much more likely to want to work with the real key x64 OS vendors like Microsoft, Novell and RedHat. They already have x64 blades and no need for the M series, Niagara or even Galaxy. They need an x64-experienced services business to try and push California into the market, which a Sun purchase wouldn't give them. They may want StorageTek, but again they may decide it is smarter to stay neutral in the storage arena so they don't allienate EMC.
No, I think if CISCO do buy any bit of Sun, it is going to be at the either the firesale stage if IBM walk away, when CISCO can afford to out-bid other parties for the scraps it wants without incurring the pain of having to deal with the rest, or it will be after IBM has bought Sun, when CISCO and other parties queue up to bid for bits that IBM will sell off. At this point there seems little gain in CISCO paying out possibly up to half their reserve cash to lumber themselves with the whole mess that is Sun. In the meantime, they're unlikley to flatly deny it as any press attention is a good opportunity for CISCO to bang on about what a secure investment they are (big cash reserve) and how they are moving into new market areas (California solution).
Sorry, Sunshiners, but trying to make CISCO your new daydream knight-in-shining-white-armour to replace FSC is probably just as unrealistic as the old "Solrais on SPARC and nothing else" dogma.
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