Competitors Beware: Cisco’s Dawn is Hot and Bright

Perhaps it’s just me, but it seems that it is in vogue to root against large and powerful companies like Cisco, Microsoft, Google, Oracle, and more.  Looking back through the years, I haven’t always been complimentary of these companies but I’ve tried to remain objective yet present my opinion on their visions, strategies, and execution.

With the release of John Chamber’s memo to Cisco’s employees, Cisco is clearly under the microscope.  People are actually calling Cisco “Too Big To Succeed” and pointing towards an impending investor upheaval.  Could you imagine these statements made toward GE, Boeing, IBM, Facebook, or Google?

As Jack Welch famously said, “Willingness to change is a strength, even it means plunging part of the company into total confusion for a while.”

Given that the entire world of IT is within a major inflection point, Chamber’s email must be seen as strength not weakness.  To respond to this rapid change, Cisco needed to reprioritize and refocus the company ala Google’s reorganization.  Furthermore, I’d like to see Chambers firmly take the reigns at Cisco to forcibly guide them through this next phase of technology.

Always remember that Cisco isn’t a “one-hit-wonder” as they have diversified products and services that address consumers, service providers, and enterprise customers.  The reality is Cisco plays a vital role within the IT industry and they are re-inventing the company to solve new and complex challenges manifested by this new IT inflection point.  Great ideas and execution are not limited to young companies and these companies have much to learn from Cisco.

Finally, rather than focus on Cisco’s reorganization and stagnant stock price, let’s look towards their new products within storage (MDS), switching (Nexus), compute (UCS), and datacenter fabric (FabricPath), as they are revolutionary, disruptive, and competitive.  My only suggestion to Cisco is that they need to fill additional product gaps (hardware/software/services) via strategic acquisitions of healthy, growing, and visionary companies.

Competitors beware, as the old proverb goes, “It’s always darkest before the dawn” and Cisco’s got a blazing hot and bright light.

Dell Avoids Aster and Dodges a 296 Million Dollar Mistake

Another one bites the dust as Teradata has acquired Aster Data for a reported $263 million.  This represents 89% of Aster Data shares as Teradata already owned 11% of Aster bringing the true acquisition cost to $296 million or $275 million after subtracting Aster’s $21 million in cash.  In any case, that’s a lot of money for a company of Aster’s age and size.

For Teradata this acquisition makes sense as they continue to compete against HP (Vertica), IBM (Netezza), EMC (Greenplum), Oracle, and SAP (HANA).  Teradata is faced with an age-old question for technology companies; hold on to their proprietary ways of the past or reach for the open and commoditized ways of the future.  It is not clear to me which direction Teradata will choose. However, it is clear to me that, unlike Dell, Teradata is the right company in the right industry to make such a gamble on Aster; the database guru’s at Aster, Tazo Argyros and Mayank Bawa, will find themselves at home within the halls of Teradata.

While I applaud Dell for continuing to blaze their own path, it seems others within the technical community are harder to please.  Per Gigaom’s Stacey Higginbotham’s article posted on March 3, 2011:

So for Dell, and any other big data wannabes out there, the only proven options left to
start
fulfilling this niche are ParAccel, Infobright, and Ingres’s VectorWise Platform.”

I’d hardly call Dell a “big data wannabe” and perhaps some have misconstrued their attempted acquisition of 3Par as a precursor to Dell entering this space.  In fact, Dell has been quite clear that any software acquisitions must have an impact on their strategic lines of business.  While Aster and other big data start-ups have the potential of driving Dell’s server and storage sales, their valuations and competitive landscapes make them a risky move for Dell.

Dell is quickly becoming the king of “Cloud Neutrality” as they are providing key pieces of the solution to their customers while working with various infrastructure providers such as Juniper, Cisco, and more. By purchasing disruptive Cloud software companies within the areas of management, orchestration, security, and monitoring, Dell could further their leadership in this market.  Think the completion of UEC; very exciting!

Since I’ve never started a billion dollar company from my dorm room, I’ll defer to Michael Dell to make the right moves for his company.  Perhaps they’ll enter the big data market with a smaller software acquisition and integrate it into other cloud offerings thereby indirectly attacking the market.  For now, Teradata has gotten a bit stronger while Dell has avoided a $296 million mistake.