It’s Dead End for Cisco Systems, Inc. (CSCO) after Dell-EMC Corporation (EMC) Deal

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One of the key points for tech giants like Cisco Systems, Inc. (NASDAQ:CSCO) is whether it can survive the changing environment even in the tech sector to remain a dominant force as before. While survival and being in the news will not make much of a different for them, it is a fact that they will find the going to be tough to be proclaimed as ever before. The acquisition of EMC Corporation (NYSE:EMC) by privately-held Dell has more or less driven the network equipment maker to the wall.

To Hunt For Similar Company

The acquisition has virtually driven Cisco Systems, Inc. (NASDAQ:CSCO) to scout for storage acquisition immediately. Following the admission of Invicta being dead, the company has no other option but to go for a storage solution, according to a partner and top executive of the solution provider. The partner was in the 500 list of CRN 2015 Solution Provider. The person indicated that after the closure of its storage business in July, its partners were questioning the networking equipment maker’s role in the space. As a result, partners are now forced to look at Dell.

If Cisco Systems, Inc. (NASDAQ:CSCO) needs to prevent its partners exiting and preferring to go with the Dell-EMC Corporation (NYSE:EMC), then it will be a writing on the wall. Partners believe that the networking giant might look to arrest the trend by going in for the acquisition of storage operator to stay competitive in the converged marketplace. The company’s Gold partner said that the company will not stand idle and look at things to go as it was. As the coming together of storage, as well as, computing is growing, Cisco cannot remain to be content with a pure player to be relevant in the marketplace like its rivals.

Compelling Offer

The partner’s executive believe that Dell and Hewlett-Packard Company (NYSE:HPQ) have much more compelling offers than Cisco Systems, Inc. (NASDAQ:CSCO). The person was categorical that if the networking giant needs to demonstrate its relevance in the compute space in the data center, then the company should b equipped with a combination of computing and storage offering. The company would also face an issue where the solution providers would not like a partnering firm like NetApp Inc. (NASDAQ:NTAP). That would mean any chances of plugging the gap will be elusive. Instead, they would like SolidFire, an all-flash storage vendor, and Scality, an object storage software developer.

Cisco Systems, Inc. (NASDAQ:CSCO) Gold partner said that they may like something on the lines of International Business Machines Corp. (NYSE:IBM) buying Cleversafe. IBM disclosed its acquisition only recently to add to its cloud, as well as, on-premise data centers. Cisco may have to think beyond the traditional offering to be more competitive in the space. A part of EMC, as well as, Cisco said that the acquisition would eliminate a potential barrier on the networking firm. That meant it would dive into the storage market anytime.

Competition Is Heating Up

Cisco Systems, Inc. (NASDAQ:CSCO) has already lost its top position in the cloud infrastructure position to Hewlett-Packard Company (NYSE:HPQ). Amazon.com, Inc. (NASDAQ:AMZN) is providing its own infrastructure to the businesses at a competitive price. Alphabet Inc (NASDAQ:GOOGL) is also doing the same thing.

Now, the company needs to act quickly on storage acquisition, its partners believe. The combination of Dell – EMC Corporation (NYSE:EMC) can offer something for the next six or nine months. Within an 18-month period, they could also have a hyper-converged solution. Therefore, Cisco Systems, Inc. (NASDAQ:CSCO) will be hard pressed to indulge in acquisition failing which it might only lead to a dead end.

Viraj Shah

Viraj Shah has completed M.Com (Finance) and is currently pursuing his CFP. He tracks US markets along with other global markets like India very closely. He is very passionate about stocks, real estate, and technology. He also believes that money can always be made in the market.

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