Last month, Network World reported that Cisco lost market share across the board.
Meanwhile earlier this week, network security vendor Enterasys, issued a press release revealing that its NAC sales revenue grew 317% in 2009 compared to the same consecutive quarter in 2008.
This growth rate contradicts many security industry analysts and pundits, who say that NAC will never get off the ground with enterprise users because it’s complicated, expensive and requires too much up-front investment.
Naturally, I felt it was an opportune time to get a "feel" for why the Enterasys NAC solution is doing so well.
Interestingly, Enterasys security expert Dennis Boas believes that end users can and do invest in NAC – if the product is the right fit. So in the below Q & A session, Boas shares his insight on the most prevalent threats to the enterprise network, customer-proven best practices of network access control (NAC), enterprise concerns about the financial and management aspects of NAC, and why the Enterasys NAC solution is in such high demand. Boas also led an educational session at the Gartner Security Summit this week too.
1. As alarmingly described in the video below, a Black Hat attack on Cisco's network admission control (NAC), compromised the Cisco agent installed on the end system. So Dennis, what do you have to say about this video and the Cisco NAC design flaws that the folks at Black Hat so alarmingly described?
| Dennis Boas: | Security mechanisms are used to validate the integrity and authenticity of the Enterasys agent for all server/agent communications. Additionally, with Enterasys NAC, the end system agent can be downloaded dynamically from the assessment server – and only after the end system is successfully authenticated. Another option with Enterasys NAC is agent-less assessment based on a network scan, which eliminates agent compromise-type attacks. Also note that Enterasys uses multiple criteria beyond end system health assessment to assign and limit access granted to an end system, including device type, authentication method, authenticated role, location of the end system (switch, port, SSID), and time of day. Customers who have concerns about these type of attacks have strong, secure, and flexible options with Enterasys NAC. |
2. Well, with all the security solutions from anti-virus to next-generation firewalls available – why in the bejesus would an enterprise need a NAC solution in the first place? Pardon my skepticism, but I love to hold vendor's feet to the fire.
| Dennis Boas: | Firewalls and AV are nice and they are part of the solution, but they aren’t a complete solution. Firewalls and DMZs only protect you from external threats. Your AV and your firewalls don’t give you the visibility you need to control your network and be secure. AV and firewalls won’t tell you what and who is connecting to your network, where they are connecting from, and whether their status meets your security policy requirements. NAC fills in these gaps. |
I blogged last April about how Cisco was working overtime AGAINST the Buy America provisions of the $7.2B broadband stimulus fund.
Fast-forward to June 19, the National Telecommunications and Information Administration (NTIA) granted Cisco its coveted Buy American Exemption, allowing Cisco to sell to recipients of the $7.2B broadband stimulus fund all of the products that it has outsourced to contract manufacturers located overseas (it's my opinion this "exemption" rewards the behavior that the stimulus fund was passed by Congress to change).
Fast-forward a week later to June 26, Larry Strickling is confirmed as the new Administrator of the National Telecommunications and Information Administration (NTIA).
However, most alarming in my opinion, a financial disclosure document filed March 31 2009, showed that Stickling owned a large Cisco stock position (a minimum of at least $100K according to the document itself, page 3 - line 6.
So why would I find this most alarming?
Well, its been proven that a government official can be bribed with free dinners, so in my mind a government official in possession of a large corporate stockholding while that corporation is subject to administrative rulings by that same government official, raises a "mighty big red flag" in my opinion.
Finally, I found the following statement (page 3 - 2nd paragraph) made by Strickling during his March 19, 2009 confirmation testimony before the U.S. Senate, exceptionally noteworthy:
"Since 2000, I have worked for a handful of telecommunications companies of varying sizes, each with their own product offerings and business strategies. None survives as a stand-alone company today. I believe these experiences with an assortment of communications companies and my previous government service at the FCC provide me a unique background for the position of Assistant Secretary."
I voted for President Obama seeking change, I did not help elect Obama as President because I wanted to see the "status quo" maintained. Read more
From personal experience I've learned that individuals not polite and respectful enough to remove their hat while indoors, also never get the job done.
Thankfully and most fortunately for me, Dual CCIE #18532 Routing and Switching/Security - George Morton (who always politely and respectfully removes his hat while indoors), gets the job done and in record time too.
For example, Cisco released its new worldwide CCIE count late Friday and by this afternoon, George delivered to my email box his complete analysis of the new CCIE count:
"We've passed the 20,000 threshold in the total number of CCIEs.
"My last report was in May, covering a 3 month time frame, February to May. However this time, we are only 39 days out and Cisco has produced a new CCIE count.
"Why?
"My guess is that Cisco published so soon because it passed the 20,000 mark in total worldwide CCIEs, big news and a major milestone as well as accomplishment for Cisco. Noticeably, the growth in CCIE numbers is slowing. For example, in the last 39 days we've had an average of only 6.44 CCIEs minted per day. Years past the numbers were as high as 10 per day. In my last report, the number per day had slid to 8. So the trend is continuing lower during this recession:
"My forecast for the stock market - not a good sign, (a lower stock market lies ahead).
"I've taken note that the change in the CCIE Security track has had a major impact on new security CCIEs. Back in April the CCIE Security track changed, no more 2612’s running 12.2T, no more VPN-3000’s and no more PIX’s. I think we will start to see the number grow again later this year, but for now the IOS 12.4 track with ISR routers is slowing down the Security CCIE track.
"Interesting numbers this month, only 66% of all applicants who passed were for the CCIE Router and Switch track. The Service Provider track was second at 32% with Voice coming up from behind with 25%. We're also now starting to see the CCIE Wireless track, which only had 6 passing applicants and we've experienced a new low for the CCIE Security track, with only 1 passing applicant.
"Yes, Reese pointed out to me that the numbers in the chart below don’t jive. True, Cisco only counts your CCIE number once. So we had 251 new CCIEs, but 318 applicants passed a lab in the last 39 days, the difference is for a second, third, etc. lab:"
Source: Dual CCIE #18532 George Morton
"Multiple certificates numbers really don’t add up. In May we did not get the new numbers from Cisco for multiple certificates. So the multiple numbers reflect from February 23 to June 26, (123 days). R & S + Security is still the most popular dual CCIE track, but I'm betting that R & S + SP will over take R & S + Security this year as the most popular dual CCIE track. In this report, R & S + Service Provider was 49% of the successful attempts for dual CCIE or better:"
Source: Dual CCIE #18532 George Morton
"I have two friends that are studying for SP this summer. Joe is just nuts, (R&S + Security CCIE), Jason just passed R & S and figures he is almost ready for SP. So why not try?
"This is why I see SP as the new king of dual-CCIEs.
"Interesting CCIE news from around the world, however, the Pacific Rim CCIE numbers didn't change over the last 39 days. I think this is a typo, because last month Cisco missed the multiple CCIE numbers and this month it appears it has missed the Pacific Rim numbers. So the ranking looks like last month with the Pacific Rim adding the most number of CCIEs and EMEA in second place:"
Source: Dual CCIE #18532 George Morton
"The ranking of the double digit countries show China in first, USA second, Canada and India tied for third. New to the list was Egypt. As a percentage of change, Egypt was the most dramatic of all countries:"
Had an interesting conversation earlier this week with a famous networking industry journalist and the subject of Cisco's senior executive team came up.
Remarkably, we both were wondering aloud about what the average tenure would be of the 61 executives listed on Cisco's Mount Rushmore (i.e. Cisco's executive biographies web page).
Obviously, my curiosity got the best of me and I'm proud to report that the average tenure of 59 of the 61 executives is 11.5 years, I omitted the years of Cisco service for both John Morgridge and Richard Justice because they are no longer full-time Cisco executives.
Amazingly, only one CCIE is a member of Cisco's 59 strong senior executive team, Manny Rivelo - Senior Vice President of Cisco's Development Organization Operations.
Furthermore, the Chairman and CEO of Cisco China - Jim Sherriff, left out of his biography the fact that he was CEO of Dallas based Stonebridge Technologies for a very short year.
The longest tenure of a current senior Cisco executive is 20 years, held by Joel Bion - Senior Vice President of Cisco's Product Resiliency Research, who is responsible for Cisco's IOS Software. I find that fact interesting because Cisco is celebrating its 25th anniversary this year, so it appears not too many senior executives are around from Cisco's early days. Read more
Pejman Roshan - Chief Marketing Officer of enterprise fixed mobile convergence (eFMC) vendor Agito Networks, gave the following Q&A session regarding Agito's RIM BlackBerry support announcement earlier this week.
In my opinion, it appears that with this announcement, Agito has surpassed competitors on mobile handset technology (see Agito's answer to question 5).
Agito, which partners with Cisco, as well as other major PBX and WLAN companies, is fusing enterprise wireless LANs, carrier cellular networks, IP telephony and location technology to mobilize voice and UC applications.
Furthermore, Agito adds that its enterprise fixed mobile convergence (eFMC) platform enables low-cost in-building voice coverage, reduced cellular costs, improved enterprise visibility and control over cellular usage, and better accessibility and responsiveness for mobile workers, so let's cut to the chase:
1. What exactly has Agito Networks announced this week?
| Pejman Roshan: | Agito introduced Agito for BlackBerry, which brings enterprise VoIP over WiFi for dual-mode BlackBerry smartphones. It enables BlackBerry to be integrated into corporate PBXs and Unified Communications systems, while reducing the expense of mobility, particularly around international charges. It is available as a software upgrade to new and existing customers. |
It appears Cisco has successfully made the market transition to selling refurbished Linksys directly to end users, according to Cisco:
Linksys by Cisco Certified Refurbished Product
Refurbished product are mostly customer returns that meet original factory specifications. These products have been fully tested, upgraded to latest firmware, and certified by Cisco-Linksys technicians via Linksys ISO certification procedures. These products may have minor cosmetic blemishes that do not impact their performance or overall product look integrity. Limited warranty and technical support period is ninety (90) days for refurbished product sold in the United States.
3 months after Cisco registered the shoplinksys.com domain name to sell refurbished Linksys, Cisco merged the Linksys channel partner program into Cisco's registered partner tier. Read more
Vik Desai - President and Chief Executive Officer of unified computing infrastructure vendor - Liquid Computing, describes below in the following Q & A session his complete "data center in a chassis" blade system.
Interestingly, Desai previously served as Chief Operating Officer of Radware (NASDAQ: RDWR), where he led the company to $400M of market cap growth and a 140% increase in shareholder equity.
Network World readers may recall that Radware recently purchased Nortel's application delivery business (Alteon) for the cut-rate price of $18 million. Amazingly just 9 years earlier, Nortel had purchased Alteon for $7.8 billion.
Earlier this month, Network World's Data Center Derby story acknowledged Liquid's first-mover advantage with its unified data center concept having had time to build up a multisourcing capability and community effort around its core technology.
With Cisco losing market share across the board, I thought it was an opportune time to find out from Desai how Liquid intends to pour cold water over Cisco's ambitious unified computing system:
1. Cisco made a lot of noise about its unified computing system (UCS) back in March. Please describe what Liquid Computing means by a UCS?
| Vik Desai: | Liquid Computing's definition of unified computing (LiquidIQ) is a flexible, standards-based and secure system that enables complete software-based control of all application IT infrastructure, including servers, networking, and storage. By standards-based, we mean that the system should be able to run out-of-the-box standard operating environments - whether bare metal or virtualized - without the need for any special software or other proprietary technologies from the UCS provider. |
How LiquidIQ Works:
Read more
Source: Liquid Computing
Before Cisco CTO Padmasree Warrior was hired by Cisco, she was the CTO of Motorola and dismissed in her blog the introduction of the Apple iPhone. However within 9 months of the Apple iPhone's introduction, Motorola sales had collapsed by more than $4 billion (Page 1) and Motorola operating earnings dropped $3.8 billion to a loss of $534 million, leaving Warrior with absolutely no future as the CTO of Motorola.
In my opinion, Warrior is now repeating her Motorola failure at Cisco. For example, during the first 9 months of Cisco's 2009 fiscal year under Warrior's leadership as CTO, Cisco sales plummeted $1.6 billion (Page 4) and operating income nose-dived $1 billion. Additionally, a UBS analyst is reporting that Cisco's losing market share across the board.
Today, Apple will begin selling its new iPhone 3G S and in my opinion, it will kill the Cisco Flip video camera.
How so you may ask?
Well, lets do a comparison of which device makes it easier to upload a video to YouTube. Read more
Dual Cisco CCIE #18532 Security/R&S - George Morton, argues that by moving from high-end T1 MPLS-VPN services to DSL/Cable access services, a company's monthly network communications cost will be reduced.
At the same time, Morton believes with DSL/Cable services having up to 18Mbps of download availability, the move to cloud computing is more reasonable and will impact the entire IT business case for cloud computing.
Morton also reasons that by offering multiple paths to branches with download availability up to 18Mbps per circuit, you could move Active Directory, Exchange services, file sharing, digital training and database services over multiple links to the cloud, reducing both edge operating and network access services costs.
For those networks that require all Internet traffic to be managed at the data center, Morton says DSL/Cable with the Cisco 1811 makes sense.
Morton's design would route all requests over the DMVPN-mGRE. With download speeds of 18Mbps, Internet access at the branch would run faster than traditional T1 services. For those companies that need Quality of Service there are many options, multiple pipes with QoS for voice dedicated to one uplink and data services on the second link.
According to Morton, the end game is to evaluate DSL/Cable for all remote connections to the data center and headquarters. The savings he believes, will not only be on hardware and network services, but also the ability to expand data center options in order to reduce costs while increasing productivity in branches.
Finally, to make any progress in reducing T1 costs, Morton believes the following DSL/Cable myths need to be busted once and for all:
Myth 1: DSL and Cable are only for homes and small businesses, because they don't scale and aren't reliable. Read more
This week I've added the following nifty subnet calculator to the Cisco Tools web page:
The NetQoS Subnet Calculator offers a view of every bit in the IP address to help network engineers understand how IP subnetting works, according to network performance management vendor NetQos, and it also has a feature allowing entry of a real address mask of your own to test if it is on the same or remote network.
"Until one takes some real addresses and experiments with how the mask affects the address bits, it is challenging to understand," said Bill Alderson - NetQoS Technology Consulting Officer. "Most people don’t know or use binary math. It is simple, yet non-intuitive. I developed the Subnet Calculator to make learning more demonstrative and fun."
Alderson continued, "Dotted decimal was originally created to try to make network addresses appear in decimal form that more people could understand, with each eight bits being converted to decimal.
"Below are two addresses broken out from dotted decimal to binary and then redisplayed with dots separating octet boundaries:"
1.1.1.1 is 00000001000000010000000100000001 or 00000001.00000001.00000001.00000001
2.2.2.2 is 00000010000000100000001000000010 or 00000010.00000010.00000010.00000010
Alderson expounded, "Applying a Mask of 11111111.11111111.11111111.00000000 adds to the complexity and introduces binary addition required to understand the result. The result in the cases above would be: nnnnnnnn.ssssssss.ssssssss.hhhhhhhh where:"
n= network
s=subnet
h=host
Alderson added, "In the subnet calculator the binary and the n, s, and h are clearly defined for easy understanding in different scenarios. For example, start by entering your address and mask in the calculator. Then add another target destination address you might want to send a packet to and calculate the result. The calculator will tell you if it is on your segment (switch) or if it must be sent to the router for forwarding beyond your segment."
Alderson concluded, "Once the basics are understood, it will help you understand the more complex. For instance, let’s say you want to know all the dotted decimal addresses that end up falling under a non-octet boundary subnet mask. Just enter the mask and address, hit calculate and a list of networks will be shown."
Screenshot of the NetQoS Subnet Calculator:
View more Cisco Tools. Read more
Earlier this week, Greentech Media Editor Michael Kanellos created the rumor that smart grid technology vendor Silver Spring Networks was getting ready to hire a "somewhat high-level executive from Cisco Systems."
So I wondered this morning whether that executive was Steve Nye - the Vice President and General Manager of Cisco's Service Provider Network Management Business Unit whom a Cisco source had said was leaving his position.
Well, the first comment to that blog story stated:
"Another Exec Judy Lin is leaving Cisco. She only joined a year ago and is leaving for Silver Spring Networks. Cisco is a like a BANK with 500 VPs, and 9 to 5pm work hours"
So I immediately went to Cisco's Executive Biographies web page and read the biography of Judy Lin (PDF version).
Around 2:00PM Eastern Standard Time I started phoning and emailing Cisco PR executives for a response to our Network World reader's comment and received no reply.
At 3:12PM emailed Greentech Media Editor Michael Kanellos with a link to our reader's comment and Kanellos' source then confirmed Judy Lin's name. Read Kanellos' blog story:
Update: Silver Spring Nabs Cisco’s Ethernet Queen
Lazy guy that I am, didn't close the web browser window that I had opened for Cisco's executive biographies web page. So imagine my surprise to read that Kanellos was reporting Judy Lin's photo, name and biography had already been removed from Cisco's Mount Rushmore (borrowed from Kanellos' ancient Egypt monument theme).
And sure enough, Lin is missing from Cisco's executive biographies page.
I find it interesting that our Network World reader's comment was at 1:00PM, I contacted Cisco at 2:00PM for confirmation (no response) and by 4:07PM Kanellos' confirmed and reported Lin's name missing from Cisco's executive biographies.
Below is the screenshot of Judy Lin's photo, name and biography link as it appeared before 2:00PM on Cisco's executive bio page, and amazingly in my opinion, less than 3 hours later Lin was totally wiped off Cisco's Mount Rushmore: Read more
Steve Nye - the Vice President and General Manager of Cisco's Service Provider Network Management Business Unit is leaving his position and a headhunter has been hired to seek a replacement for Nye according to a Cisco source.
Earlier this year, Network World reported that Nye outsourced the U.S. jobs of 3 Cisco groups he managed to Tech Mahindra in India. Nye managed Cisco's service provider network management applications serving wireline, mobile wireless and cable providers.
I can't help but wonder if Steve Nye is the Cisco executive that according to a rumor by Greentech Media Editor Michael Kanellos, is set to join Silver Spring Networks - which is a major smart grid competitor of Cisco. Read more
It appears the October 2007 tax fraud investigation of Cisco by Brazilian authorities regarding an alleged evasion of $830 million in taxes is still simmering. According to Cisco's most recent Form 10-Q filed with the U.S. Securities and Exchange Commission:
"Brazilian authorities are investigating the Company’s Brazilian subsidiary and certain of its current and former employees, as well as a Brazilian importer of the Company’s products, and its affiliates and employees, relating to the allegation of evading import taxes and other alleged improper transactions involving the subsidiary and the importer. The Company is conducting a thorough review of the matter. In December 2008, Brazilian authorities asserted claims against the Company for calendar year 2003 and the Company believes claims may also be asserted for calendar year 2004 through calendar year 2007. The Company believes the asserted claims are without merit and intends to defend the claims vigorously. The Company is unable to determine the likelihood of an unfavorable outcome on any potential further claims against it. While the Company believes there is no legal basis for its alleged liability, due to the complexities and uncertainty surrounding the judicial process in Brazil, and the nature of the claims asserting joint liability with the importer, the Company is unable to reasonably estimate a range of loss, if any. In addition, the Company is investigating the allegations regarding improper transactions, the Company has proactively communicated with United States authorities to provide information and report on its findings, and the United States authorities are currently investigating such allegations."
In the filing, Cisco admits Brazilian authorities have asserted claims against it for 2003 and expects further claims for 2004, 2005, 2006 and 2007.
Below, view a document describing the investigation from the Federal Court of Sao Paulo that has been translated from Portuguese: Read more
The Dallas Morning News reported today that Cisco may invest more than $500 million over the next 10 years in its new data center located in Allen, Texas.
According to Jennifer Grimm - director of business development for the Allen Economic Development Corp:
"It's huge for us, we've been working for several years to market sites up there for data centers. We couldn't have won any better than this. They really wanted to be in Allen and liked the things that we had to offer. This project has been under way for almost two years, and we are excited to see it become a reality."
City of Allen, Texas - Home of the New Cisco Data Center Read more
Source: AEDC
Cisco reviewed my March 3, 2009 blog post:
Miercom lab test results: Brocade DCX vs. Cisco MDS 9513 and 9509
And brought to my attention that it has also worked with Miercom on director-class switches from Brocade and Cisco using the same test methodologies but with different 8G line card configurations.
According to a report on ChannelWeb, Robert Lloyd - perhaps the most likely successor to Cisco CEO John Chambers, is goading Cisco channel partners this week at the Cisco Partner Summit in Boston to wallop HP ProCurve:
"I think we've been taking too many punches with regard to the competitive landscape and not punching back ... We'll keep it clean, but for you we need to help define the value proposition on why we're a better choice than HP ProCurve.
"I'm encouraging all of us to punch back-- with a little bit of class -- and if we get it right, it will make a big difference in the market. In hockey, it's called 'the glare' ... Two people make eye contact, and nobody has to say anything: there's going to be a fight."
Also attending the Partner Summit, Cisco CEO John Chambers backed up the call to fisticuffs by his likely heir and successor:
"HP is a competitor, and we're going to have fun competing. We've never had a $110 billion competitor before.
"The last time we had this type of opportunity in front of us was with Nortel, Lucent and Alcatel: great companies, and we held our own pretty effectively."
Perhaps taking inspiration from the Cisco NetFlow Rap by Mix Master Mitch, it appears Cisco might be getting geared to "roll medieval" on HP ProCurve.
How so you may ask?
Well for starters, Cisco just released its first rap video (as seen below) that extolls Cisco channel partners to grow together and lead.
Cisco Video Partner Rap Read more
Six weeks ago, pure IP unified communications systems vendor ShoreTel bragged about winning a unified communications deal from competitors at AT&T Park - the home of the San Francisco Giants.
Yesterday, the San Francisco Chronicle revealed the competitor was Cisco and that the deal was worth $1 million.
The Giants partnered with ShoreTel to roll out a new Voice over IP (VoIP) unified communications system that included a total of 450 ShoreTel IP Telephones. The Giants also purchased the ShoreTel Converged Conference solution as well as the ShoreWare Contact Center application Workgroup, for its ticketing, sales and customer service contact center.
According to San Francisco Giants CIO - Bill Schlough:
"The Giants were seeking a state-of-the-art communications system that would transform the way our front office staff, the media, and our fans connect at AT&T Park, and we were very excited to find that a local leader in IP-based communications offered an outstanding solution coupled with the best customer service in the industry. The ShoreTel system will help us all communicate more efficiently, provide enhanced capabilities for our staff and luxury suite patrons, and ensure the safety of our fans. On top of all that, the system will save us hundreds of thousands of dollars per year. ShoreTel has hit a grand slam for the Giants."
"We love to do demos against Cisco," said ShoreTel Chief Financial Officer - Mike Healy.
"We can't overtake Cisco, but we're aiming to be No. 2," Healy added.
The SF Chronicle article continued that ShoreTel has also installed similar systems for the Verizon Center - home of the NBA's Washington Wizards, and other sports venues, including HSBC Arena - home of the NHL's Buffalo Sabres and NASCAR's Infineon Raceway. Read more
In her research note this week, Boston based Avian Securities Senior Telecom Research Analyst - Catharine Trebnick, gave an update on the broadband initiatives of the American Recovery and Reinvestment Act (ARRA).
According to Trebnick, "Under the ARRA, the Rural Utilities Service (RUS) of USDA and the National Telecommunications and Information Administration (NTIA) of the Department of Commerce, will be dispersing $2.5 billion and $4.7 billion respectively for broadband initiatives. The Department of Energy has $11 billion for ‘smart grid’ projects, of which telecommunications is a key piece."
Interestingly, Trebnick outlined 4 key points:
1. Near term we don’t see ARRA driving incremental CapEx in FY09.
The Office of Management and Budgets (OMB) released the new timeframes for distribution of the funds. Initial grants from NTIA are now expected December 31st, 2009. RUS awards are expected by the end of FY09 and/or distributed during 1Q10.
2. Who is expected to apply for grants?
States, local counties, non-profit organizations, cable, fixed and mobile service providers are all likely to apply for grants. RFPs likely to succeed are those that have already secured funding, such as Vermont’s Telecommunication Authority (VAT).
3. Rural Operators with a large rural customer base are likely to benefit.
Fixed and Mobile operators such as DigitalBridge, Embarq (NYSE :EQ) Frontier (NYSE: FTR) and Qwest (NYSE: Q) all have rural customers and could benefit from NTIA and/or RUS grants. Verizon (NYSE: VZ) maybe able to apply depending upon markets designated for LTE and the final language adopted in the NoFAs (Notice of Funds Availability).
4. We estimate approximately 50-60% or approximately $3.9 billion of ARRA funding will go to pay equipment vendors.
Suppliers most likely to directly benefit are those tied to FTTx and 3G/4G with a tangible benefit to VoIP. FTTH networks reach 13% of North American households, with end-to-end fiber connections used by 4% of the residential market. (Source: FTTH Council).
It appears that EMC has successfully "rustled away" Data Domain from not only NetApp, but perhaps HP and Cisco too.
How so?
Well, EMC offered this week $300 million more than NetApp to acquire deduplication storage solutions vendor Data Domain. Additionally, EMC's all cash deal has no finance or due diligence contingencies because it's using existing cash to launch an immediate tender offer for Data Domain stock, giving EMC the formidable competitive advantage of speed on top of its premium offer.
It also appears that timing is everything, especially since HP's new storage star - former longtime EMC executive David Donatelli, conveniently has had his "storage hands" successfully cuffed by EMC's non-compete court victory for perhaps the entire upcoming year.
Meanwhile, Cisco lost almost 10 percentage points in overall SAN market share in Q109 according to The Dell'Oro Group and Cisco's acquisition strategy appears no longer focused (in my opinion) on adding value for its channel partners.
Overview of the EMC Offer for Data Domain: Read more
In a brilliantly played game of legal brinkmanship, the Suffolk County Superior Court of Massachusetts has masterfully called the "bluff" made by HP's new networking boss David Donatelli.
The "bluff" you may recall concerned the ludicrous argument (in my opinion) made during his May 1 court hearing (page 13) in Massachusetts:
"Storage-related responsibilities will make up only about 20% of Donatelli's position at HP, the majority of his responsibilities will relate to servers and networking gear - two areas EMC does not occupy."
So calling Donatelli's "bluff," the Massachusetts Court entered an order on May 21 that allowed Donatelli to begin working at HP earlier this week, but with the "caveat" that Donatelli doesn't have HP storage-related responsibilities for an entire year (the length of his non-compete agreement with EMC).
However, it is also interesting to note that during the earlier May 1 court hearing (page 13), EMC argued that the "integration of EMC's storage products with servers and networking equipment gives EMC's products a competitive edge; in counsel's words, it's all linked."
Well, apparently EMC's argument must be true (in my opinion) as Donatelli's famous Boston employment lawyer - Jay Shepherd responded to last week's court order:
"All the ruling says is that David can start working at HP, and it limits what he can and cannot do there for the time being. It remains a preliminary injunction, and both the Massachusetts and California cases are proceeding."
In the meantime, rather then report to Donatelli as had originally been planned, Dave Roberson - senior vice president and general manager of the HP StorageWorks division, will now report directly to Ann Livermore - executive vice president of the HP Technology Solutions Group, until the order is lifted or modified in future court proceedings or until the 1 year non-compete agreement with EMC expires.
EMC's response to the modified court order:
"We are pleased with the court's ruling upholding the terms of the EMC key employee agreement. The judge has entered an order as proposed by EMC that precludes Mr. Donatelli from being engaged in any aspect of HP's business that overlaps or competes with EMC's storage business for a 12-month period."
Read more
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Brad Reese cofounded BradReese.Com Cisco Refurbished which offers one year warranties on Cisco Refurbished and Cisco Repair.
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