Should Cisco Buy EMC?

This week John Chambers said, “It is not incumbent upon Cisco to own a company like VMware to broaden its presence in the data center.”  Who’s he kidding?  Or is Mr. Chambers simply testing market reaction for the inevitable takeover of EMC by Cisco?

As Cisco has its sights on the data center, EMC and its RSA and VMware subsidiaries would be a natural fit.  EMC, known for their storage expertise also maintains products in other areas of interest for Cisco.  These areas include Archiving, Backup and Recover, Content Management, Intelligent Information Management, IT Operations Management, Replication, Security, Storage and Virtualization.

For example, EMC is quietly assembling a management alternative to the Big 4.  They have acquired SMARTS, nLayers, Voyence, and RSA (their enVision Platform).  These products would compliment the CiscoWorks Suite of Products as well as augment other Cisco products such as MARS.  Not to mention the myriad of other security products that RSA maintains. 

Other products such as eRoom compliments Cisco’s WebEx division, Documentum extends Unified Communications, Connextrix, CLARiiON, and Celerra give Cisco a stranglehold on storage and could be combined with Cisco’s Storage Switches and FCoE ambitions for a true end-to-end data center solution.  Finally, VMware gives Cisco a new distribution channel and access to the data center, enterprise, and consumer markets.

A combined Cisco/EMC would be a formidable competitor for HP and may enhance IBM’s relationship with the networking giant.  The potential downside would be weakening their channel in HP, a fact that did not stop HP from purchasing Opsware earlier this year or continuing to develop networking equipment to compete with Cisco. 

If anyone could pull of such a mega merger it would be Cisco.  John Chambers and his executive team will never be known to back down from an emerging market or creating a new challenge for them to overcome.  Only time will tell, but it’s the battle for the data center is definitely in full swing.