On Dec. 1 Cisco announced its most recent acquisition.
Tech industry’s M&As in 2010
Unto itself, Cisco acquiring a company is nothing new. Cisco acquires several companies every year. However, as will be explained in this newsletter, what was interesting about the Cisco announcement was the type of company that Cisco acquired.
Cisco has a number of strengths. They are the undisputed leader in enterprise switching and routing. They are a leader in providing VoIP and Unified Communications to enterprise customers and they are also a leader in helping service providers build out next generation networks. They are not a leader, however, in network management. In fact, at times it appears as if Cisco’s enterprise switching and routing business unit is closer to third party network management vendors such as CA than it is to its own Network Management Technology Group.
It is not that Cisco doesn’t believe that network management is important. However, the traditional Cisco thinking is that you don’t win very many deals because of your management capabilities. As a result of that belief, it has historically been Cisco’s stance that its network management capabilities just have to be good enough so that it doesn’t lose deals.
Because of how Cisco has historically approached network management, many of you may be somewhat surprised by the fact that Cisco’s most recent acquisition was Linesider – a network management company. To put the Linesider acquisition into somewhat of a perspective, this is Cisco’s first acquisition of a network management company since 2005 when it acquired Sheer Networks. So, should the Lindsider acquisition surprise you? Not really. As we pointed out in a recent newsletter, Cisco is one of several companies attempting to bring to market solutions that integrate networking, servers and storage. Linesider provides an orchestration system that helps to make that possible. What orchestration does is that it automates the arrangement, coordination and management of computer systems, storage, security and networks in order to efficiently deliver application services to end users.
The way that orchestration works is that it creates an executable process that involves centrally controlled message exchanges among network entities. As part of the orchestration of network services, the orchestration system provides a layer of abstraction between the application services and the infrastructure. This layer of abstraction is sometimes referred to as Network Services Virtualization (NSV).
The bottom line is that Cisco seems to have realized that as opposed to traditional network management functionality, an orchestration system can actually help them land deals in this potentially emerging world of converged infrastructure. In our next newsletter we will talk more about the functionality that Linesider brings to Cisco.
