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Cisco's Ultimate Data Center Dream: Buy EMC and you have storage and virtualization in your pocket!

No, I am down with Migraine and will be coming up with loads of my own M&A series which will not only do analysis on the possible mergers and acquisitions but also why some mergers and acquisitions may be fatal to some companies. I have already mentioned it before that they will all fall under my "Funnel Strategy and Puddle Convergence" M&A framework.

Rich Tehrani has some pointers and we all know that when Cisco and Intel were laying their bets early in the investment game of VMware, they had a "strategic intent". And we may all try to deny the fact but its purely a battle of getting fully equipped with all ammo in your data center.

When I spoke to the Intel team, who were on its own consolidation spree and bringing down 130 data centers to 8 international hubs, I knew that they were onto the "Estuary-Funnel" Global Delivery Model. An approach which will not only help Intel (or any other firm that seeks the Global stage) spread its risk but also create an opening for the emerging "Village System" where they can operate glocally.

Cisco on the other hand too is not shy of its Data Center dreams, with HP's initial attempt to achieve a near "SW-HW-SI" model, Cisco might be wanting to up the ante with a fully ready HW (Storage, Network, ...) pre-business bulk packet or part of the business bulk (I have used this term several times in the IT/Business Convergence in my several speeches, please Google to find the last slides).

Consolidation is coming and as I've been saying, the recent plateauing of BPO is a mere sign of maturity and that we are off the hype. We must thrive for sustainable GDM business models. Trust me short circuiting is not far away, spread your risks now!

Here's Rich's opinion:

With a majority stake in VMware and a commanding lead of the storage space, what's not to like about EMC. If you are Cisco, it makes sense to pick up EMC now because the stock is down a bit and moreover Cisco would be able to immediately expand its product line beyond networking, telepresence and networking.

Overnight, Cisco could become a leader in storage and a very strong security player.

Remember that Cisco was an early VMware investor and they likely want to expand their ownership of the company.

Remember also that Cisco is doing some amazing things with virtualization in their routers and owning a premiere name in the virtualization space can only help their core offerings.
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