Is Cisco eyeing BMC?

On February 10, 2009, Cisco sold $4 Billion of debt for “general corporate purposes.” Cisco used a similar debt offering to finance their take-over of Scientific-Atlanta in 2005. Additionally, Cisco has over $29 billion of cash and has been aggressively cutting costs and improving efficiencies throughout the various organizations.

The question is not if Cisco is eyeing an acquisition, but who are they eyeing and when will they pull the trigger? With EMC making defensive moves against Cisco, could Cisco have eyes for BMC? After-all, BMC fits a similar profile to Scientific-Atlanta and plugs a series of glaring holes in Cisco’s portfolio. Namely, trouble ticketing, CMDB, application management, virtualization management, and datacenter management including; servers, network, business process automation, and more.

Cisco could fold BMC into a newly formed datacenter automation or cloud computing division that would also include CiscoWorks and the old TopSpin products currently know as vFrame. Much like HP’s purchase of Mercury Interactive and Opsware, a Cisco purchase of BMC would signal to the world that Cisco is serious about the datacenter and is finally getting serious about software.

With a market cap of just under $6 Billion, a BMC purchase would have minor impact on Cisco’s balance sheet and it would buy them a proven software executive management team with good products and a growing business. The only question is whether Cisco wants to “go to the mattresses” against IBM? Only Chambers knows the answer to that question, but he may just have the guts, vision, and market power to make it a reality.

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