Partners: Cisco 'Needs' A Nutanix-Like Purchase To Compete With Dell, HP And EMC

Cisco partners are disappointed the networking giant's rumored acquisition of Nutanix is off the table, saying it leaves Cisco without a solid product to compete against Dell, Hewlett-Packard and EMC in the fast-growing hyper-converged market.

Nutanix CEO Dheeraj Pandey ended speculation about a possible acquisition Monday, saying there was "no truth" to any deal in a statement addressed to "Team Dell." Dell began shipping late last year a series of XC Series Nutanix appliances under the Dell brand. Under that deal, Dell is pre-integrating the Nutanix software with its own PowerEdge servers.

In a separate statement Monday addressed to Nutanix's "Channel Community," Sudheesh Nair, senior vice president of worldwide sales and alliances, said, "While we don't usually respond to rumors, … we want to be clear -- we are not in discussions to be acquired."

[Related: Nutanix: 'No Truth' To Cisco Acquisition Rumor; 'Committed' To Dell]

Sponsored post

Cisco partners say they want to see the San Jose, Calif.-based networking leader snatch up a company similar to Nutanix sooner rather than later to better compete in the hyper-converged infrastructure space, where Cisco is lacking its own offering.

"There's definitely a need to go in that direction, whether they do that through an alliance or acquisition, because both converged and hyper-converged [are] definitely hot in the market," said Robert Keblusek, senior vice president of business development at Sentinel Technologies, a Downers Grove, Ill.-based Cisco partner. "They already have offerings through partnerships and architectures with VCE and a hyper-converged partnership with SimpliVity, but I haven't seen a lot of activity around that."

Keblusek said Nutanix would have given Cisco "immediate credibility" in the "rapidly growing" hyper-converged market.

"As Cisco goes forward, they're no longer invested in [EMC's] VCE, I think they need to have something in their portfolio, because it is definitely the evolution of the data center," said Keblusek. "[The Nutanix acquisition] would have changed the game a bit and put Cisco right there with VCE."

The Nutanix acquisition would have also matched Cisco up to better compete with storage players such as HP and Dell, according to Shannon Champion, business development manager at Matrix Integration, a Jasper, Ind.-based Cisco partner.

"If you're going to go head-to-head with the other server manufacturers, let's say HP for example, they need storage," Champion said. "It's just Dell and HP in the U.S. I think [Cisco] needs something there."

Jamie Shepard, senior vice president of health care and corporate strategy at Dallas-based Lumenate, a Cisco partner, said Cisco has the ability to lead innovation in the software-defined space through an acquisition such as Nutanix.

"Cisco definitely needs a software-defined play, and they should not be OEMing any software-defined solutions out there -- they should go out there and get their own," said Shepard. "It's better when you own it, because you can actually integrate and then you can innovate off of that integration. I know that's where Cisco is thinking, too."

Shepard said Cisco missed out on the all-flash array market with the "failure" of its UCS Invicta storage appliance from its 2013 acquisition of Whiptail.

"So instead of going after the all-flash, that market is already past them, they're going to leapfrog in[to] software-defined and they won't miss it this time," said Shepard. "I think Cisco has learned from how market shifts can happen a little quicker now, more frequently and they have less of a lifespan then they used to. When they brought in Whiptail, ... they were thinking of riding the wave of all-flash arrays and it didn't pan out. … So if you don't get in at the right time, you'll never get in. ... [Cisco] has to get into software-defined now, because they already missed the all-flash array."

The speculation over a Nutanix acquisition stemmed from a May 15 report by Jared Rinderer, senior research analyst at the independent research firm Equity Capital Research Group, which claimed Cisco was planning to announce the acquisition of Nutanix as soon as next month. Rinderer told CRN in an email that his information came from his personal research and industry contacts.

"The heat's been on -- that's why you're hearing all these rumors," said Shepard. "It's their top initiatives -- software-defined and security."

It was also reported last week that Cisco made a $9 billion bid to buy the advanced threat detection vendor FireEye -- a report that was shot down by Cisco CEO John Chambers during an earnings call May 13.