Partners: Dell-EMC Deal Could Force Cisco To Buy Storage Vendor
Partners say a Dell acquisition of EMC would rattle Cisco's cage, forcing the networking giant to go hunting for an immediate storage acquisition.
"They're going to have to have a storage solution after they admitted Invicta was dead," said a top executive solution provider and Cisco partner ranked on the CRN 2015 Solution Provider 500 list, who declined to be named. "If Dell buys EMC, Cisco seriously has got to do something."
Since Cisco closed its storage business Invicta in July, partners have been questioning what the San Jose, Calif.-based networking giant's play would be in this space. Partners are now looking at Dell, saying a Dell-EMC merger would require Cisco to immediately seek out a new acquisition in order to stay competitive in the converged marketplace.
"There's no way they're going to be able to stand by, because as the convergences of storage and compute come together, you're going to need to be relevant in that space, and if you're just a pure compute [entity], you're not as relevant as your competitors," said a solution provider and Cisco Gold partner who declined to be identified.
"As it gets down to Dell, HP and Cisco, both of those guys [Dell and HP], as those things converge, have a much more compelling offer than what Cisco could do unarmed. If Cisco's going to want to be relevant in the compute space in the data center, they're going to need to have a combined compute and storage offering," he said.
Solution providers said they wouldn't like to see Cisco seek out a partnering company such as NetApp, but rather an "immediate play" for vendors like object storage software developer Scality or all-flash storage array vendor SolidFire.
"I wouldn't see them making an immediate play for NetApp; rather, I would see them [seeking] something like ... what IBM just bought with Cleversafe," said the Cisco Gold partner. "I just don’t see them going into it with just buying a traditional array manufacturer -- that's the old way of thinking."
IBM announced plans to acquire object-based storage software company Cleversafe this week in order to bring object storage technology to IBM's cloud and on-premise data centers.
Robert Keblusek, chief technology officer of Downers Grove, Ill.-based Sentinel Technologies, a Cisco and EMC partner, said an EMC-Dell deal would remove a possible barrier holding Cisco back from diving into the storage market.
"If this becomes more of a competitive, combative situation with EMC, I think there's less reasons for Cisco not to go directly into the storage business," said Keblusek. "It's one barrier that probably no longer exists."
Speed would be of the essence in such a Cisco storage acquisition, partners said.
"Dell would have something to market with EMC within six to nine months, and within 18 months they'll have a hyper-converged solution, and Cisco will have to come to market within that one-month period," said the solution provider ranked on CRN's SP500 list. "I just don’t see them waiting around very long."
Rumors were swirling in May that Cisco was looking to buy hyper-converged specialist Nutanix, which were later squashed by Nutanix CEO Dheeraj Pandey. Pandey said Dell, which has a partnership with Nutanix, would have "a front-row seat" if they ever decided to become part of another company.
"If Dell buys EMC, they really don't need Nutanix anymore," said the executive ranked on the CRN SP500 list. "As much as I want Cisco to buy EMC, I think Cisco wants to skip that step because it’s a speed thing now and Cisco is watching the market looking at SimpliVity and Nutanix and some of these other hyper-converged vendors to see who's going to pop up as No. 1, but I think some of this other stuff with EMC and Dell, it might have Cisco buy quicker than they'd like."
Cisco is partners with hyper-converged software developer SimpliVity, where Cisco sells the Westborough, Mass.-based startup's software and hardware card on UCS servers.
In an interview with CRN in August, Cisco CEO Chuck Robbins said his company is content partnering with companies for hyper-converged solutions instead of creating its own product line.
"If Dell bought EMC, that would definitely change what [Pandey and Robbins said], and who knows, maybe Dell is a little angry Nutanix is talking to Cisco," said the CRN SP500 executive.
PUBLISHED OCT. 9, 2015