As many of you have noticed, this blog is changing things up a tad. Just before we began coverage for Parallels Summit 2009, the name changed from “Virtualization Inc.” to “Between the Lines.”
So what does “Between the Lines” mean? Well, as you can see in the summary above, it’s an inside look at what Parallels thinks about the world of virtualization. We’ll tell you what we see coming down the line; what we have in the works; and basically how we, as a company, can help individuals, businesses and service providers optimize computing in their world.
A new recurring segment of this blog will be ‘Serguei Says’ – where we share the thoughts and opinions of Parallels’ CEO Serguei Beloussov. There are no limits to the topic of conversation. You may be wondering how we acquire these personal thoughts and opinions from Serguei, and the answer is simple: We’ve tapped his phone line.
This segment’s topic: Will Cisco attempt to buy EMC?
This was a question recently brought up in a Reuters article here:
The article explains that there has been talk; mutterings; whispers in the dark from an unknown origin, that maybe possibly perhaps Cisco is building up funds in preparation for a large purchase, and that there had been informal meetings between the two companies where they discussed the above issue.
The article also mentions that Cisco may specifically look to target VMware, a large part of EMC’s business which you may have heard of. This would significantly drop the $30 billion price tag, and give Cisco what is possibly of the most value to them: virtualization technology to include with all their hardware.
So the question everyone is asking is “Will this thing happen any time soon?”
Serguei Says: Unlikely
While there might be some truth to the rumor, and it might make sense for Cisco from a general outlook, Serguei explains such a deal is unlikely to happen soon due to the current economic climate and resulting low prices. EMC is not going to be in any rush to sell when it is still growing quickly, generating cash and generally performing well on its current track. Selling in a hurry just complicates the deal.
In fact, Serguei doubts that EMC would separate VMware and sell it by itself anyway since it’s the main growth engine and technology asset for EMC. On the other hand, Cisco is unlikely to want to own EMC’s high end storage business, so the two parties may fail to reach an agreement anyway.
If it does happen, though, it will make Cisco a very dangerous entity for IBM, HP, Dell and others. More significantly, it will also give Cisco an integrated network, hardware and software (OS?) offering that would put them in serious competition with Microsoft (kind of like Apple is now, but on the enterprise level). At present, Cisco already competes with IBM, HP and Dell, but it partners with Microsoft, so this would be a major about-face for them.
In fact, if the acquisition went ahead, the most momentous change overall would probably be in the landscape of their potential partnership deals. There are loyalty conflicts to consider when taking on new business rivals.
Cisco has done an amazing job integrating various assets into their business model in the past though. The most impressive was the integration of the telephony companies recently. With this in mind, Serguei feels that if they did wind up owning VMware and/or EMC – the IT industry would change in a big way. Plus, if it did happen, it would be great for Parallels, since we’d be an ideal partner for IBM, HP, Dell and others!
PS – What would happen then if Cisco were to team up with Apple? Wow…