Light Reading
VMWare reportedly outbid Cisco for the software-defined networking startup

Does Cisco Need Nicira?

Craig Matsumoto
News Analysis
Craig Matsumoto
8/14/2012
50%
50%

Now we know what made Nicira Networks Inc. worth more than US$1 billion: Apparently Cisco Systems Inc. (Nasdaq: CSCO) wanted the company, too.

Bloomberg reported Monday night that Cisco made a failed bid for the software-defined networking (SDN) company.

VMware Inc. (NYSE: VMW) announced a $1.26 billion deal for Nicira on July 23.

Why this matters
Bloomberg mentions Nicira in the larger context of the toughening competition Cisco faces. Systems vendors Arista Networks Inc. and Cyan Inc. also get cited as startups that offer alternatives to Cisco's equipment.

Cisco is trying to convince the world that it takes SDN seriously while also arguing that SDN -- which theoretically could create lower-cost alternatives to traditional routing -- isn't a threat. Cisco CTO Padmasree Warrior summarized the company's position in a blog recently. Analyst Tom Nolle of CIMI Corp. noted that the tone sounded defensive to him.

Cisco is nurturing its own SDN startup, the spin-in company Insieme ("spin-in" meaning Cisco intends to acquire it). But an interest in Nicira might suggest that Cisco sees some value in that company's concept of overlay networks.

For more



— Craig Matsumoto, Managing Editor, Light Reading

(2)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Soupafly
50%
50%
Soupafly,
User Rank: Light Sabre
12/5/2012 | 5:23:54 PM
re: Does Cisco Need Nicira?


Craig, your writing like a newbie.


What about;


a) IPR/ Patents around SDN & Overlay networking?


b) Time-to-market & strategic advantage?


c) Subject matter expertise of the Nicira staff?


All of the above would be more than enough to justify why Cisco should do the deal.


Frankly, I am suprised at John & his team here. Time & again John & his boys have strategically moved to take out competitors or achieve a TTM advantage/ tech edge.


They should have outbid VMware & sent out a clear message that they mean business in the SDN space. This is a dropped ball & a slapped wrist for John Chambers. Maybe letting Ned Hooper leave & promoting Padmasree was a mistake?


Its too early to make the call on Ned & Padmasree, especially when you dont have all the facts. However, Cisco had a deal construction & execution team that made arnie's famous robot blush! They were feared & respected under Ned. Can Padmasree deliver the same intensity & capability?


Given the huge cash stockpile they have offshore... this was a complete no-brainer. Hence my comments.


I am also 100% confident that;


1) Google is working to help & further develop the open source SDN movement & has a team working to contribute towards said objective.


2) Amazon is going to be interested in this area. They have BIG plans to be 1 of the global content hubs. SDN smarts would fit very neatly into a CDN story and that wider strategy.


(The is in bold because this is a 800lb gorilla game, imho. Only the biggest global players will survive because they will have the leverage in networking, customer relationships & content/exclusivity deals.)


Insieme; Putting all your faith in your spin-in is a risky strategy & not 1 that Cisco has ever deployed. They are smarter than that. So I don't think that blocked, stopped or significantly influenced this deal. I just think without Ned's focus & networking finesse they were out-maneuvered by the VMWare team.


 


 

Pete Baldwin
50%
50%
Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:23:54 PM
re: Does Cisco Need Nicira?


I guess another reason for an acqusition would be to take the technology off the market.


That would have been an expensive proposition, though, and it's not as if it would have delayed SDN and overlay networks.

Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Interviews
CenturyLink: Building the Case for NFV

12|19|14   |   02:14   |   (0) comments


At the 2020 Vision Executive Summit, James Feger, VP, Network Strategy & Development at CenturyLink, talks about how the US operator is approaching virtual network functions from an operational and business case perspective.
LRTV Interviews
Liberty Global Sees Business Goldmine

12|18|14   |     |   (0) comments


Steen Sorensen, VP of business services for Liberty Global, explains where the giant international MSO sees growth potential.
LRTV Documentaries
EE: The Road to 5G

12|16|14   |   16:02   |   (1) comment


Andy Sutton, the principal network architect at UK mobile operator EE, explains how his company is using Wembley stadium as a wireless test bed and how that's helping EE to plan the evolution to 5G.
LRTV Huawei Video Resource Center
Highlights of Huawei's NFV Open Cloud Forum 2014

12|16|14   |     |   (0) comments


Huawei hosted its inaugural NFV Open Cloud Forum during the SDN & OpenFlow World Congress 2014 in Düsseldorf, Germany. The Forum brought together technology thought leaders, senior executives and telecom professionals from global carriers, industry associations, as well as other partner companies in the ecosystem, to exchange views on and collectively explore how ...
LRTV Custom TV
Realizing Operators' Digital Vision

12|16|14   |   5:23   |   (0) comments


Leveraging technology is fundamental to digital transformation but understanding customers and serving them really well is at the heart of digital businesses. TM Forum lists the following as the strategic pillars of the digital business: business agility and rapid innovation, operational agility and effectiveness, IT and data centricity, plus customer centricity. ...
LRTV Documentaries
US Cellular Injects Analytics Into LTE

12|16|14   |   2:57   |   (1) comment


US Cellular's Mario Vela explains how the operator uses analytics for network planning and what comes next as the carrier looks to eke more value out of its metrics.
LRTV Interviews
How Cox Biz Plans to Keep Growing

12|15|14   |     |   (2) comments


Steve Rowley, SVP of Cox Business, details how the third-biggest US MSO intends to boost its revenues to $2 billion and beyond over the rest of the decade
LRTV Huawei Video Resource Center
Interview With Bill Zhang, Director of SoftCOM Product Management, Huawei

12|15|14   |   2:50   |   (0) comments


Bill Zhang elaborated on Huawei's open philosophy in NFV solution development and network architecture design at the SDN & OpenFlow World Congress 2014.
LRTV Huawei Video Resource Center
Event Highlights: Huawei at SDN & OpenFlow World Congress 2014

12|15|14   |   3:43   |   (0) comments


Huawei joined the 2014 SDN & OpenFlow Congress as one of the key sponsors and contributors. At the event, Huawei reinforced the openness and flexibility of its network infrastructure strategies, and provided updates on its SDN and NVF innovations. Through participations at the exhibitions, forums and speeches, Huawei encouraged the industry to "think bigger and ...
LRTV Interviews
How Cable Biz Services Hit $10B Mark

12|12|14   |     |   (1) comment


Cable operators reached $10 billion in annual business services revenues by delving deeper into their vertical markets and expanding beyond the smallest firms.
LRTV Documentaries
Mediacom Aims to Test Connected Tractors

12|11|14   |   05:07   |   (3) comments


Cable business service provider is taking its services to the 'agribusiness' sector in partnership with farm equipment specialist John Deere and is getting involved in Gigabit Cities developments.
LRTV Interviews
TWC Business Looks Beyond $3B

12|10|14   |     |   (0) comments


TWC Business Services chief Phil Meeks explains how his unit has reached $3 billion in annual revenues and what its plans are for next year.
Upcoming Live Events
February 10, 2015, The Westin Peachtree Plaza, Atlanta, GA
March 17, 2015, The Cable Center, Denver, CO
April 14, 2015, The Westin Times Square, New York City, NY
May 6, 2015, McCormick Convention Center, Chicago, IL
May 13-14, 2015, The Westin Peachtree, Atlanta, GA
June 9-10, 2015, Chicago, IL
Hot Topics
T-Mobile, BlackBerry Flirt With Reuniting
Sarah Reedy, Senior Editor, 12/17/2014
1-Gig: Coming to a Small Town Near You
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 12/17/2014
Comcast Launches 4K Streaming Service
Alan Breznick, Cable/Video Practice Leader, 12/18/2014
US Carriers, You're Going to Cuba!
Mitch Wagner, West Coast Bureau Chief, Light Reading, 12/18/2014
T-Mobile Lights Up 27 Wideband LTE Cities
Sarah Reedy, Senior Editor, 12/15/2014
Like Us on Facebook
Twitter Feed
Webinar Archive