Is the Sun rising on Cisco?

Nikos Theodosopoulous, an analyst for the investment firm UBS, issued a bulletin whereby he states that Cisco is likely to enter the blade server market within a year.  Theodosopoulous did not indicate if this entrée into the blade server market would be by acquisition or organic growth.

Given Cisco’s desire to dominate the next generation data center market, the convergence between server, networking, storage, and the rise of virtualization, it is my opinion that Cisco’s only path to success is via acquisition.  Earlier this year, I surmised that Cisco would be wise to acquire EMC to obtain their formidable storage, security, software, and virtualization technologies.  However, recent changes in market conditions and increased competition and uncertainty at VMware have led me to the conclusion that there is another path to data center domination.

With Dell, HP, and IBM off the table, Sun Microsystems stands out like the North Star on a dark clear night.   While Sun’s revenues remain relatively flat at $13.8 billion, their market cap is less than 1/3 of EMC’s and would give Cisco an impressive array of products, services, and software.

Servers: Sun offers an impressive line of x64 Servers including AMD, Intel, and SPARC based processors.  Additionally, Sun offers both mid range and high end servers which compete with systems from IBM and HP.  Cisco could have the best of both worlds as they promote x64 Blade Servers running on Intel and/or proprietary SPARC servers.

Storage: Sun offers a variety of storage servers, network attached storage, datacenter disk, and full line of tape based devices.   Cisco would have the ability to compete with EMC, HP, and IBM on storage and lower there own storage costs for there existing unified communications initiatives.

Software: Sun maintains a full line of enterprise software including; Solaris, OpenSolaris, Java, Identity Management, Systems Management, HPC, Databases, and Virtualization.  Cisco immediately would become a player within virtualization, databases, Java, and systems management.  Additionally, Cisco would become an instant player within the Petabyte-scale analytics by acquiring Sun’s investment in Greenplum.

Finally, if there is any executive team on the planet that can revive Sun it is John Chambers and company.  Purchasing Sun would put the final nail on Cisco’s transformation into a software company.  It would instantly reshape the server, storage, and networking landscape and rock the next generation data center market.  Combining the global reach, R&D, and channel of these two companies would create a rival to HP and IBM but with one key difference; Chambers knows how to integrate and dominate new markets.

For all those naysayers out there, you better seek shade fast because a Sun combined with Cisco is going to burn.

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