What Cisco Won't Buy
Granted, it's an outlier. A Mercury News column over the weekend listed 10 predictions for Silicon Valley -- your usual New Year's kind of story for the Sunday business section -- and added a longshot as the tenth one.
And seriously, kudos for that. Most of the other nine were pedestrian: Intel Corp. (Nasdaq: INTC) settling its legal squabbles; Facebook not going public; Apple Inc. (Nasdaq: AAPL) actually producing the mythical tablet. But a list like this ought to generate some conversation, so Cisco/Dell got added at the end.
The theory is that, as Cisco competes more closely with HP Inc. (NYSE: HPQ), Cisco will need to look more like HP. Add to that the fact that Dell has been struggling, and you have an M&A recipe, right?
Thing is, Cisco insists it doesn't make business moves just to match a competitor. That's not a literal truth; Cisco sometimes makes acquisitions to fill product gaps -- gaps created by the fact that someone else sells the stuff. (You could put Starent in that category.) But when it comes to long-term strategy, I think Cisco does stick to that creed.
CEO John Chambers seems to think Cisco is transmogrifying into a new type of company entirely, something that's at the next level of evolution beyond Cisco the Router Company. Mimicking someone else doesn't jibe with that plan, especially when we're talking about HP, which isn't the role model it once was.
It's true that Cisco likes the idea of offering complete packages. A prime example would be its Unified Computing System (UCS) for almost the entire data center. But UCS leaves out the storage itself -- because storage is too vanilla for Cisco to exploit.
Servers and PCs seem to be in the same position. Yes, UCS famously includes Cisco's first servers, marking direct competition with HP, but I don't think it logically follows that Cisco would want to run a full-scale PC business. It's fun to think about, though.
— Craig Matsumoto, West Coast Editor, Light Reading