Cisco tipped for Nutanix buy
Deal would give Cisco 'mutual adversary' in datacentre battle with VMware, analyst claims
Outgoing Cisco boss John Chambers is preparing to make one last big acquisition in the form of storage outfit Nutanix before he steps down, according to an analyst.
Writing on StorageNewsletter, Jared Rinderer, senior research analyst at Equity Capital Research Group, predicted Cisco may announce a deal with the hyperconverged datacentre solutions specialist Nutanix on 8-10 June at its user and partner conference in Miami.
Chambers will relinquish CEO duties in July after 20 years in the hotseat, stepping back to the post of executive chairman.
The rumoured deal would mark the latest escalation in Cisco's battle with former ally VMware, Rinderer said. The duo's partnership around x86 server virtualisation adoption turned sour in 2012 when VMware strayed onto Cisco's turf by outbidding it to buy software-defined networking outfit Nicira.
Of all the hyperconverged systems players, Nutanix would give Cisco the most strategic value as it is the "clear market leader thus far", Rinderer wrote.
"By acquiring Nutanix, Cisco gains a conspirator with a mutual adversary, VMware," he added.
"For more than a year now, VMware and Nutanix have been in numerous highly heated, public skirmishes. VMware is threatened by Nutanix's one-stop shop for datacentre infrastructure and its potential to disrupt VMware's objective of the complete automation of the datacentre. Nutanix dislikes VMware's strategy tax (known as the "vTax") and vendor lock-in agenda."
Cisco's acquisition rate has slowed a little in recent years. In 2012, it made 11 acquisitions, including Meraki, and in 2013 it bought 10 firms, including Whiptail and Sourcefire. That slowed to six last year and so far in 2015, Cisco has acquired just two firms.
Nutanix would not come cheap, however, with its valuation exceeding $2bn (£1.3bn) as of August 2014, Rinderer pointed out. He said Cisco will issue debt to complete the purchase because only $3.2bn of its cash as of January 2015 was based in the US.
Nutanix said it does not comment on rumours.