Round Table: 2009 in the rearview mirror, Pt. 3

Rafael Ruffolo (Staff Writer, ComputerWorld Canada): Another company out there is Cisco, which sits on so much money. You could see them next year or the year after just going on a spending spree.

Dave Webb (Editor, ComputerWorld Canada): I was looking for that this year, because they floated that bond issue back in February and ended up with like $6.5 billion more, which took them to about $40 billion. Forty billion in walking-around money, and I haven’t seen a big buy-out.

Jeff Jedras (Senior Writer, Computer Dealer News): They haven’t been doing major buys, but they have been doing a lot of smaller buys that have probably have been off the radar. One of the big acquisitions this year for Cisco was the acquisition of Pure Digital, the makers of the Flip video camera, that’s placed into their focus on the home market and building the home network, and the home play that we’ve heard talked about for years in the channel, but it’s never really taken off. Cisco, with Linksys, with Pure Digital, with their smaller plays, seems set to make a major play in the home.

DW: Cisco is another company that is branching out and moving into computing, as opposed to simply switching and routing, and I’m wondering if Cisco could be the company that not only ends up with its own stack, but a stack that’s one tile bigger than the other stacks.

Kathleen Lau (Senior Writer, ComputerWorld Canada): Well, the already issue there is Cisco Unified Computing this year; there was this whole idea of convergence for structure that I think we’ll see more of next year, where the data centre isn’t just a bunch of siloed components: we have servers, storage, and networks. It’s all integrated, and you have the whole idea is that you’re flexible and have provisioning and all that great stuff. I know that Cisco was talking a lot about that strategy and so was HP, so I think we’ll see a lot of other companies really offering a broader

DW: So one big box with that Bay Bridge logo on it?

RR: Here’s a really out-of-the-box prediction: Cisco, VMWare, and EMC (EMC owns most of VMWare) — what about a huge merger there? They work together so often; they put out press releases all the time of them making sure their hardware and software works together well. I can easily see them getting together and becoming one company.

JJ: No, I think that’s a bit much. I think that it speaks to the difference in strategy and outlook between a company such as Cisco and a company such as Oracle. Oracle is buy, buy, buy, and Cisco is partner, partner, partner. You can get a lot of those same advantages through alliances; Cisco has built a very strong alliance program around its UCS announcement this year. Unfortunately, they couldn’t get HP on board, which led to a lot of friction in the companies that do partner in other areas, but no, I think that Cisco will continue to make some small acquisitions to round out its portfolio, but it’ll continue with the partnering strategy, rather than make more acquisitions. For them it’s all about the network; it’s very much about the network for John Chambers. The network is the platform. If it goes across the network, if it eats up bandwidth, they see that as good for them, and part of their core routing and switching business. It means more bandwidth, more switches, more routers. So if it’s more bandwidth, it’s good for Cisco and they want it and they want a piece of it.

DW: I’d almost be willing to agree with you if they hadn’t floated that bond issue in February. What’s the $6.5-billion for?

JJ: John Chambers wanted a yacht that was as big as Larry (Ellison)’s.

RR: Just sitting on so much money, I just see something happening in the near future with a huge acquisition for them.

Brian Jackson (Staff Writer, $6.5-billion, huh?

DW: It was supposed to be $4-billion. The subscription went so quickly that they decided to…

BJ: They’re going to build the first data centre on the moon!

JJ: If they do look at acquisition, we should look outside of North America. The Asian market is a huge focus for much of the major vendors.

DW: A huge focus for Cisco.

BJ: I like that segue. “Not the moon, but Asia…”
Next: We roundup the other big stories: Conficker, the death of Nortel, the cloud and more.

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