Cisco CEO Chambers: We don't need to own VMware

ORLANDO -- It's not incumbent upon Cisco to own a company like VMware to broaden its presence in the data center, CEO John Chambers said this week.

Speaking during a roundtable discussion with reporters at the Cisco Live! customer conference, Chambers essentially dismissed speculation that Cisco would make a run at storage titan EMC or virtualization software vendor VMware, of which EMC owns 84%, as it deepens its penetration into the data center.

"Our ideal acquisition is 100 engineers with a product just about to come to market," Chambers said. "Margins aren't good in storage devices."

Cisco will, however, deepen its relationships with data center stalwarts like EMC and VMware (Read our Q&A with VMware CEO Diane Greene), and would like to with IBM, Chambers said. IBM has been reluctant to partner more tightly with Cisco in the data center, Chambers said, perhaps because of Cisco's broadening ambitions and competitive challenge.

"We're still at the altar," Chambers said. "We think [a tighter IBM/Cisco partnership] is in the best interests of employees, shareholders and customers" not only in the data center, but in the home and with service providers. "We want to make the pie bigger instead of smaller."

Chambers said Cisco's partnership with Microsoft is a model worth emulating. The companies acknowledge each other's ubiquity in the network and on the desktop and maintain interoperability, but also compete hotly in areas like unified communications. 

As for the data center transformation opportunity – virtualizing resources and converging them onto a single network – Chambers says he's not sure whether Cisco's larger opportunity is in greenfield or legacy data centers immersed in infrastructure that outdates Cisco.

"We'll play aggressively in both," he said. "But the traditional players have not brought innovation [to the data center] in years."

On the consumer side, Chambers said the price for a residential version of Cisco's TelePresence virtual conferencing system, expected within the next year, will be less than $10,000.

"We think $10,000 is very fair but it will be below that," he said.

Previously, Cisco had said that a consumer version of a TelePresence system would cost about $1,000. TelePresence systems currently range from $34,000 for the small office/home office version, to $300,000 for a larger enterprise conference room.

Also on the consumer side, Chambers said he expects Ned Hooper, Cisco's senior vice president of consumer and small businesses, to deliver a proposal to him for replacing the Linksys brand on low-end devices with the Cisco brand within 12 months. Cisco stated previously that it planned to replace the Linksys brand with its own.

Chambers also said Cisco's WebEx and MeetingPlace collaborative conferencing tools will be integrated; and that the Cisco Live! conference will be virtual in the next five to six years.