Technology heavyweights Cisco Systems and EMC Corp dampened speculation the two companies would merge as they announced on Tuesday a broad partnership to develop data centre technology, taking on rivals IBM and Hewlett-Packard. The two have spent three years developing technology and ironing out details of a deep partnership through which they will bundle Cisco’s networking equipment and server computers with EMC’s storage and virtualization technology.
Their goal is to become a top provider of data centre products as the industry switches to technology focused on providing socalled “cloud” computing services from central data centres that can be accessed over the internet and corporate networks.
As they announced that partnership, top executives from both companies suggested that persistent speculation Cisco plans to acquire EMC has been unfounded.EMC chief executive Joe Tucci said in an interview that the rumours may have been sparked as investors got wind of the close talks between the two companies that led to the partnership over the past few years.
Cisco CEO John Chambers said in the same interview, that “Our tendencies are to partner together. I think we do that remarkably well.” When specifically asked if he was interested in buying EMC, as investors have long speculated might be the case, Chambers said: “You buy big-tosmall. You partner big-to-big.”
The Wall Street Journal reported that the partnership will sell and provide maintenance and service support for a product called “V-Block,” combining EMC’s storage equipment, Cisco’s virtualized servers and networking gear and VMWare’s virtualization technology.
The partnership, the paper said, will have two components. It will be responsible for marketing and providing maintenance and support for V-Block. But the actual cloud infrastructure will be constructed by a coalition of the three companies.
The publication noted that technology giants had breached new markets, “turning once stalwart allies into competitors”.
The move by Cisco, EMC and VMWare, it said, comes amid a wave of consolidation among companies that provide hardware, software and services to corporate data centres.“Following the actions of IBM and HP to create one-stop IT shops, Dell announced in September it will purchase IT services firm Perot Systems. Software giant Oracle Corp, meanwhile, is awaiting European antitrust approval for its acquisition of Sun Microsystems,” The Journal said.
Agencies
Showing posts with label Cisco. Show all posts
Showing posts with label Cisco. Show all posts
Wednesday, November 4, 2009
Thursday, October 29, 2009
Cisco to strenghten Web security with ScanSafe acquisition
Cisco Systems has announced to buy the privately held Web security company ScanSafe for about $183 million, a move that will intensify its battle with security giants Symantec and McAfee. ScanSafe sells Web-based services that protect business computer networks and PCs from hackers, saving companies the cost of buying and installing software on their own equipment.
The top two security software companies, Symantec and McAfee, already sell such products, which are known as "cloud" services and whose sales are growing at a far faster clip than traditional software. As reported by Reuters, Cisco announced the deal on Tuesday, saying that the transaction is expected to close in its fiscal second quarter that ends in January 2010. The $183 million price tag includes cash and retention-based incentives, as per Cisco.
The deal helps Cisco expand its security portfolio, which includes email and Web security software company IronPort that it bought in 2007. San Jose, California-based Cisco has recently stepped up its pace of acquisitions. It announced deals for wireless equipment maker Starent Networks for $2.9 billion and Norwegian video conferencing maker Tandberg for $3 billion. Chief Executive John Chambers has said that he was looking to do more.
Agencies
The top two security software companies, Symantec and McAfee, already sell such products, which are known as "cloud" services and whose sales are growing at a far faster clip than traditional software. As reported by Reuters, Cisco announced the deal on Tuesday, saying that the transaction is expected to close in its fiscal second quarter that ends in January 2010. The $183 million price tag includes cash and retention-based incentives, as per Cisco.
The deal helps Cisco expand its security portfolio, which includes email and Web security software company IronPort that it bought in 2007. San Jose, California-based Cisco has recently stepped up its pace of acquisitions. It announced deals for wireless equipment maker Starent Networks for $2.9 billion and Norwegian video conferencing maker Tandberg for $3 billion. Chief Executive John Chambers has said that he was looking to do more.
Agencies
Monday, September 14, 2009
Indian IT firms see return of hiring, salary hikes
Many were predicting six months back that the Indian IT industry would be entering its twilight zone, but now there are indications that these predictions may go wrong. Several IT companies have restarted hiring and are giving salary hikes to their employees.
"That phase of drastic downturn is behind us," says S Ramadorai, CEO of Tata Consultancy Services (TCS). "There's stability now. The deal pipeline is encouraging, but the time it takes to close a deal remains long. And many customers are yet to fully open up their IT budgets," Ramadorai added.
While IT majors like TCS, Wipro and Cognizant have started promotions and salary hikes, Kris Gopalakrishnan, CEO and Managing Director of Infosys feels that things are looking better now, however the company prefers to wait and watch before giving any promotions or hikes, reports The Economic Times.
The recovery of the defamed Satyam Computer Services under the new owner Mahindra Satyam has also proved to be a boon for nearly 28,000 employees across all levels, with the restoration of the variable pay. The variable component is 10 percent at the entry level, 20 percent at the middle level and 30 percent at the senior management level. IT bellwether Wipro has lifted its freeze on hikes and promotions, at least for some employees.
Manpower supply company TeamLease, which saw its open positions drop significantly from 10,000 a month to 800 post-recession, has in the past couple of months seen those numbers rise to 3,500.
With the current trend companies have also started showing more confidence in the Indian market. Information infrastructure company, EMC has announced that it will invest $1.5 billion in India over the next five years, a level of investment from a single company that the sector has not seen in close to two years. Partha Iyengar, Regional Research Director in Gartner India, says the number of calls the company gets from customers for directions and consulting has gone up sharply in the last 3-4 months.
The Indian IT industry was one of the worst hit by the recession on account of its dependence on international markets - especially the U.S. and European markets. The freeze on IT budgets by companies around the world meant that new orders dried up. Industry association Nasscom initially forecast that IT exports would grow by 22-24 percent in 2008-09, but as the recession deepened, this was revised down to 16 percent. For this fiscal, the association has projected a 4-7 percent growth to $48-50 billion.
Agencies
"That phase of drastic downturn is behind us," says S Ramadorai, CEO of Tata Consultancy Services (TCS). "There's stability now. The deal pipeline is encouraging, but the time it takes to close a deal remains long. And many customers are yet to fully open up their IT budgets," Ramadorai added.
While IT majors like TCS, Wipro and Cognizant have started promotions and salary hikes, Kris Gopalakrishnan, CEO and Managing Director of Infosys feels that things are looking better now, however the company prefers to wait and watch before giving any promotions or hikes, reports The Economic Times.
The recovery of the defamed Satyam Computer Services under the new owner Mahindra Satyam has also proved to be a boon for nearly 28,000 employees across all levels, with the restoration of the variable pay. The variable component is 10 percent at the entry level, 20 percent at the middle level and 30 percent at the senior management level. IT bellwether Wipro has lifted its freeze on hikes and promotions, at least for some employees.
Manpower supply company TeamLease, which saw its open positions drop significantly from 10,000 a month to 800 post-recession, has in the past couple of months seen those numbers rise to 3,500.
With the current trend companies have also started showing more confidence in the Indian market. Information infrastructure company, EMC has announced that it will invest $1.5 billion in India over the next five years, a level of investment from a single company that the sector has not seen in close to two years. Partha Iyengar, Regional Research Director in Gartner India, says the number of calls the company gets from customers for directions and consulting has gone up sharply in the last 3-4 months.
The Indian IT industry was one of the worst hit by the recession on account of its dependence on international markets - especially the U.S. and European markets. The freeze on IT budgets by companies around the world meant that new orders dried up. Industry association Nasscom initially forecast that IT exports would grow by 22-24 percent in 2008-09, but as the recession deepened, this was revised down to 16 percent. For this fiscal, the association has projected a 4-7 percent growth to $48-50 billion.
Agencies
Sunday, September 13, 2009
Cisco expands campus; Likely to increase headcount
Cisco will be adding two additional office blocks totaling a floor area of 70,000 square feet. The expansion will happen around its 2.1 million square feet campus at Cessna Business Park on the Outer Ring Road in Bangalore.
This expansion might be by far the biggest in the commercial space market in this region in the last one year. Although Cisco declined to comment on the expansion, it issued a statement saying, "We have designated Bangalore as our Globalization Centre East and indicated that we will have 10,000-12,000 employees based here over the next three to five years. The idea is for 20 percent of the top talent in Cisco to be based here." At present, Cisco has 4000 Indian employees.
Agencies
This expansion might be by far the biggest in the commercial space market in this region in the last one year. Although Cisco declined to comment on the expansion, it issued a statement saying, "We have designated Bangalore as our Globalization Centre East and indicated that we will have 10,000-12,000 employees based here over the next three to five years. The idea is for 20 percent of the top talent in Cisco to be based here." At present, Cisco has 4000 Indian employees.
Agencies
Saturday, July 18, 2009
Will Cisco layoff another 600+ jobs?
Another round of employees at Cisco Systems reportedly got pink slips Thursday, as the company laid off several hundred employees as part of its plan to cut costs and realign its business.
The Wall Street Journal reported Friday that between 600 and 700 Cisco employees were laid off at the company's headquarters in San Jose, Calif. The company also cut jobs at branch offices in other parts of the U.S. The Wall Street Journal cited sources close to the company.
A spokesman for the company told the Wall Street Journal that Cisco was "doing everything possible to minimize the impact on employees affected by the limited restructuring."
Like all companies, Cisco, which makes networking equipment that runs the Internet and provides communications for large companies, has seen sales slump as a result of the global recession. The company said earlier this year that it would likely cut between 1,500 and 2,000 jobs as it realigned its business to focus on newer more profitable business segments. The cuts were expected to be completed at the end of the company's fiscal year, which ends this month.
In February, Cisco said it cut about 250 jobs at its San Jose headquarters. Cisco had 66,558 employees at the end of April. Despite the cuts, Cisco's CEO John Chambers has said publicly that he believes the worst of the recession is over. But he noted that it could take some time before spending returns to high levels. Wall Street will be watching the company's next earnings call very carefully to see signs that the bottom has been reached. Cisco will report fiscal fourth quarter and end of year earnings on August 5 after the market closes.
CNet.com
The Wall Street Journal reported Friday that between 600 and 700 Cisco employees were laid off at the company's headquarters in San Jose, Calif. The company also cut jobs at branch offices in other parts of the U.S. The Wall Street Journal cited sources close to the company.
A spokesman for the company told the Wall Street Journal that Cisco was "doing everything possible to minimize the impact on employees affected by the limited restructuring."
Like all companies, Cisco, which makes networking equipment that runs the Internet and provides communications for large companies, has seen sales slump as a result of the global recession. The company said earlier this year that it would likely cut between 1,500 and 2,000 jobs as it realigned its business to focus on newer more profitable business segments. The cuts were expected to be completed at the end of the company's fiscal year, which ends this month.
In February, Cisco said it cut about 250 jobs at its San Jose headquarters. Cisco had 66,558 employees at the end of April. Despite the cuts, Cisco's CEO John Chambers has said publicly that he believes the worst of the recession is over. But he noted that it could take some time before spending returns to high levels. Wall Street will be watching the company's next earnings call very carefully to see signs that the bottom has been reached. Cisco will report fiscal fourth quarter and end of year earnings on August 5 after the market closes.
CNet.com
Sunday, April 26, 2009
SAP Unviels Co-Innovation Lab in Bangalore
SAP AG formally launched its Co-Innovation Lab in Bangalore, the third such lab in the world by the company. The lab that started its operation in October last year, joins the league of similar labs in Palo Alto and Tokyo. "The main goal of this lab is to create a platform for collaboration between SAP and its customers and partners on solutions to different challenges in the industry", said Satyajit Singh Mecker, Senior Vice President, Global Ecosystem and Partner Group.
The SAP Co-Innovation Lab hosts a simulated heterogeneous datacenter, integrating hardware and software from SAP and other participating sponsors. "This lab is not like a R&D lab, but it is a real lab, where partners and customers can solve their problems by collaboration", said Satyajit.
Wipro Technologies, a SAP partner, was one of the first to benefit from this SAP initiative. An Insurance Claims Analytics solution was developed by Wipro by working on a platform that was developed in the SAP Co-Innovation Lab. Some of the other partners associated with the lab include Cisco, HP and Intel.
SAP India that now has over 3,800 customers with 2,900 SMEs in the list, wants to tap the potential in the Indian market by this collaborative effort. "India, especially Bangalore has been a region that has seen explosive growth and the global meltdown has not diminished its stature in the global market", said Dr. Axel Henning Saleck, Vice President and Head of the Global SAP Co-Innovation Labs.
"In 2006, SAP had announced a total investment of one billion dollar in India over 5 years and establishment of this lab is part of the investment", said Satyajit. According to Satyajit, the company sees tremendous potential in the Indian market in segments like information technology, engineering, construction, chemicals and automotive. "The current challenge that we see in India is to maintain a balance between customers and partners and keep the focus right", added Satyajit.
Agencies
The SAP Co-Innovation Lab hosts a simulated heterogeneous datacenter, integrating hardware and software from SAP and other participating sponsors. "This lab is not like a R&D lab, but it is a real lab, where partners and customers can solve their problems by collaboration", said Satyajit.
Wipro Technologies, a SAP partner, was one of the first to benefit from this SAP initiative. An Insurance Claims Analytics solution was developed by Wipro by working on a platform that was developed in the SAP Co-Innovation Lab. Some of the other partners associated with the lab include Cisco, HP and Intel.
SAP India that now has over 3,800 customers with 2,900 SMEs in the list, wants to tap the potential in the Indian market by this collaborative effort. "India, especially Bangalore has been a region that has seen explosive growth and the global meltdown has not diminished its stature in the global market", said Dr. Axel Henning Saleck, Vice President and Head of the Global SAP Co-Innovation Labs.
"In 2006, SAP had announced a total investment of one billion dollar in India over 5 years and establishment of this lab is part of the investment", said Satyajit. According to Satyajit, the company sees tremendous potential in the Indian market in segments like information technology, engineering, construction, chemicals and automotive. "The current challenge that we see in India is to maintain a balance between customers and partners and keep the focus right", added Satyajit.
Agencies
Friday, April 17, 2009
Will Cisco layoff 6,600 employees?
Is it pinkslips time at Cisco? Predicting a significant drop in revenue for the fourth quarter, a JP Morgan analyst has reported that Cisco Systems Inc "could" soon announce a workforce reduction of 10 percent (this could be equal to about 6,600 employees).
In his 49-page first-quarter 2009 preview of communications equipment and networking companies, analyst, Ehud Gelblum, of JP Morgan wrote, "We expect Cisco to guide fourth fiscal quarter revenue down 17-22%, year over year, as demand continues to deteriorate, in-line with our estimate for a 21 per cent year over year decline," "We believe Cisco could also announce a 10% headcount reduction, which we calculate could save $900M annually," he wrote.
The recent lowering of sales projections by two of Cisco's competitor's Juniper Network and F5 Network has led to a similar speculation about the company.
Cisco spokesman reportedly refused to comment on JP Morgan report directly. However, in a statement he said that on our fiscal second quarter 2009 earnings call in February we discussed a limited restructuring where we could in the near term see a total reduction of between 1500 and 2000 jobs company wide. This does not represent a broad-scale layoff in our workforce.
The spokesman added that this limited restructuring is part of our ongoing, targeted realignment of resources. While Cisco constantly manages its business priorities, resources and overall employee alignment as part of our overall business management process, we are sensitive to the impact these decisions have on employees during this challenging economic environment. We are doing everything possible to minimize the impact on employees affected by the limited restructuring.
Indiatimes
In his 49-page first-quarter 2009 preview of communications equipment and networking companies, analyst, Ehud Gelblum, of JP Morgan wrote, "We expect Cisco to guide fourth fiscal quarter revenue down 17-22%, year over year, as demand continues to deteriorate, in-line with our estimate for a 21 per cent year over year decline," "We believe Cisco could also announce a 10% headcount reduction, which we calculate could save $900M annually," he wrote.
The recent lowering of sales projections by two of Cisco's competitor's Juniper Network and F5 Network has led to a similar speculation about the company.
Cisco spokesman reportedly refused to comment on JP Morgan report directly. However, in a statement he said that on our fiscal second quarter 2009 earnings call in February we discussed a limited restructuring where we could in the near term see a total reduction of between 1500 and 2000 jobs company wide. This does not represent a broad-scale layoff in our workforce.
The spokesman added that this limited restructuring is part of our ongoing, targeted realignment of resources. While Cisco constantly manages its business priorities, resources and overall employee alignment as part of our overall business management process, we are sensitive to the impact these decisions have on employees during this challenging economic environment. We are doing everything possible to minimize the impact on employees affected by the limited restructuring.
Indiatimes
Tuesday, April 14, 2009
Is it tough times ahead for Indian IT firms?
Major information technology firms are expected to post a decline in revenue growth in the fourth quarter of 2008-09, primarily on account of project cancellations, say analysts.
"Indian vendors have witnessed several project cancellations during the third and fourth quarter of the fiscal year 2009. The magnitude of project cancellations is different for different vendors," domestic brokerage firm Motilal Oswal said in its India strategy report.
Along with project cancellations, delays in client decision making will cast a toll on 4Q FY-09 volumes, it said. "We expect IT companies to report quarter-on-quarter dollar revenue declines owing to stressed volumes and declining realisations. This is the second consecutive quarter where the sector will see dollar revenue degrowth," it said.
The rupee has depreciated 4.69 per cent against the US dollar during the March quarter, while on an year-on-year basis it has depreciated over 27 per cent.
"Hence, the top-line growth even in rupee terms is expected to remain flat to marginally negative on an organic basis during the quarter," brokerage firm Sharekhan said in its IT earnings preview. Meanwhile, the appreciation of the dollar against other international currencies (euro and pound sterling) would impact the dollar term revenues of the front-line IT firms.
"This is likely to have a negative impact of 2-3 per cent on the dollar term revenue growth rate as the IT companies bill around 25-30 per cent of their revenues in the pound sterling, the euro and Australian dollar," it added.
IT major Infosys would kick-start the quarterly earnings season from April 15 followed by other IT majors -- Wipro, HCL Technologies and Tata Consultancy Services.
"Forward earnings for most companies are not expected to be good. The earnings for the entire IT sector are expected to be bad and the Infosys results are likely to give a new direction to the market," Arun Kejriwal of Kejriwal Research and Investment Services said.
The Sharekhan report stated that amid global turmoil and uncertainty, investor focus would remain on FY-10 guidance. "Going forward, the street would be keenly watching the guidance for FY 2010 as the same would influence the sentiments towards the IT stocks. In rupee terms, the street expects a guidance of a flattish growth in revenues," it noted.
"The street is expecting a revenue growth of 3-4 per cent in rupee terms in FY-10 despite a five per cent y-o-y decline in dollar terms," Sharekhan added. During the January-March period, Infosys scrip has gained 15.38 per cent to Rs 1,324.10 and TCS was up 9 per cent.
While shares of Wipro fell one per cent since January 1, HCL Technologies was up 17 per cent at the end of March 31. "Technology stocks are likely to underperform the markets over the next few quarters," Sharekhan said.
According to Motilal Oswal following substantial across-the-board price cuts, IT companies are hopeful of restricting price cuts to five per cent in the March quarter. Besides, focus on off-shoring would improve the impact from declining realisations.
"We expect growth to start picking up from second half of FY-10, as clients begin to adopt off-shoring to cut costs. As the freeze in technology spending begins to lift, we believe large players would start booking volume growth," Motilal Oswal added.
The Sharekhan report stated that in terms of earnings, Infosys is likely to meet the lower end of its dollar guidance.
Besides, HCL Technologies is likely to report a revenue growth on the back of acquisition of British consultancy firm Axon, which would cast its toll on the operating profit margin of HCL.
Agencies
"Indian vendors have witnessed several project cancellations during the third and fourth quarter of the fiscal year 2009. The magnitude of project cancellations is different for different vendors," domestic brokerage firm Motilal Oswal said in its India strategy report.
Along with project cancellations, delays in client decision making will cast a toll on 4Q FY-09 volumes, it said. "We expect IT companies to report quarter-on-quarter dollar revenue declines owing to stressed volumes and declining realisations. This is the second consecutive quarter where the sector will see dollar revenue degrowth," it said.
The rupee has depreciated 4.69 per cent against the US dollar during the March quarter, while on an year-on-year basis it has depreciated over 27 per cent.
"Hence, the top-line growth even in rupee terms is expected to remain flat to marginally negative on an organic basis during the quarter," brokerage firm Sharekhan said in its IT earnings preview. Meanwhile, the appreciation of the dollar against other international currencies (euro and pound sterling) would impact the dollar term revenues of the front-line IT firms.
"This is likely to have a negative impact of 2-3 per cent on the dollar term revenue growth rate as the IT companies bill around 25-30 per cent of their revenues in the pound sterling, the euro and Australian dollar," it added.
IT major Infosys would kick-start the quarterly earnings season from April 15 followed by other IT majors -- Wipro, HCL Technologies and Tata Consultancy Services.
"Forward earnings for most companies are not expected to be good. The earnings for the entire IT sector are expected to be bad and the Infosys results are likely to give a new direction to the market," Arun Kejriwal of Kejriwal Research and Investment Services said.
The Sharekhan report stated that amid global turmoil and uncertainty, investor focus would remain on FY-10 guidance. "Going forward, the street would be keenly watching the guidance for FY 2010 as the same would influence the sentiments towards the IT stocks. In rupee terms, the street expects a guidance of a flattish growth in revenues," it noted.
"The street is expecting a revenue growth of 3-4 per cent in rupee terms in FY-10 despite a five per cent y-o-y decline in dollar terms," Sharekhan added. During the January-March period, Infosys scrip has gained 15.38 per cent to Rs 1,324.10 and TCS was up 9 per cent.
While shares of Wipro fell one per cent since January 1, HCL Technologies was up 17 per cent at the end of March 31. "Technology stocks are likely to underperform the markets over the next few quarters," Sharekhan said.
According to Motilal Oswal following substantial across-the-board price cuts, IT companies are hopeful of restricting price cuts to five per cent in the March quarter. Besides, focus on off-shoring would improve the impact from declining realisations.
"We expect growth to start picking up from second half of FY-10, as clients begin to adopt off-shoring to cut costs. As the freeze in technology spending begins to lift, we believe large players would start booking volume growth," Motilal Oswal added.
The Sharekhan report stated that in terms of earnings, Infosys is likely to meet the lower end of its dollar guidance.
Besides, HCL Technologies is likely to report a revenue growth on the back of acquisition of British consultancy firm Axon, which would cast its toll on the operating profit margin of HCL.
Agencies
Monday, March 23, 2009
Sun Microsystems seen as first salvo in tech battle
Quite a few technology companies could lose their independence in the next year or so as the battle among industry giants IBM, Hewlett-Packard Co and Cisco Systems Inc heats up.
The weak economy notwithstanding, Cisco this week announced its entry into the computer server market now dominated by HP and International Business Machines Corp.
And IBM is in talks to buy high-end server maker Sun Microsystems Inc, sources with knowledge of the matter said on Wednesday.
As these companies deliberately step on each other's toes to search for growth, analysts and bankers say the deals market is warming up with cash-rich tech powerhouses hunting for niche technologies at bargain prices.
Virtualization software maker Citrix Systems Inc, storage company NetApp Inc, and network equipment makers Brocade Communications Systems Inc and Juniper Networks Inc are among those that could catch the eye of tech bellwethers looking to compete in new markets, analysts said on Wednesday.
"If I own 60 percent of a market, maybe I can get to 65 percent, but really, I need a new market," said Peter Bell, a venture capitalist at Highland Capital Partners, of the dilemma that faces maturing tech companies.
Morningstar Inc analyst Rick Hanna agreed: "They're all in the war for increasing the total addressable market."
The biggest tech companies have been trying to become one-stop storefronts for business customers for years, offering software, services and hardware for everything from the data center to the desktop as their own core businesses slow down.
The larger impetus behind any deal making is the advent of two hot trends: virtualization and "cloud computing."
Virtualization software lets businesses reduce space and energy usage in their data centers, while cloud computing technologies let them access applications over the Web. Data centers house computing equipment used by companies.
The "arms race" among companies like Cisco, HP and IBM did not happen overnight, Jeff Bistrong, a technology banker at Harris Williams & Co, an investment banking firm said on Thursday.
HP's purchase of technology outsourcer Electronic Data Systems last year already pit it directly against IBM.
"What's different is we're in a major recession, enterprise values have been significantly diminished," Bistrong said.
Companies held on to their cash in the past few months as they assessed the damage to their business from the recession, said Howard Lanser, a mergers and acquisition analyst at Robert W. Baird said on Wednesday.
But now, the price tags of targets are cheap enough to justify longer-term strategic goals and tech companies that have cash will make the "buy decision," Lanser said.
Cisco has $29.4 billion in cash, IBM has $12.7 billion and HP $11.2 billion, according to recent financial statements.
Bargain Hunting
Companies like Microsoft Corp, EMC Corp and Dell Inc also may seek to own choice pieces of the "cloud," as computing becomes more Web-based.
Microsoft has been bullish on cloud computing, but its grip on data center operating systems could be threatened by the move toward remote data centers, forcing the software maker to search for acquisitions, Morningstar's Hanna said.
Microsoft CEO Steve Ballmer said at a conference on Thursday the company plans to buy up to 20 companies this year, with deal sizes ranging from $10 million to $500 million.
EMC, the world's largest maker of corporate storage, may also look for deals to improve its services offering, analysts said.
EMC itself could get acquired by Cisco; the two companies talked about a deal last year, a person familiar with the matter told Reuters in February.
Analysts said the timing of IBM's move to buy Sun illustrates the partly strategic, partly opportunistic thinking of companies that could drive dealmaking in the next year.
"Cisco has clearly laid out all its cards on the market," said Hanna, referring to the networking giant's plans to sell servers for data centers.
Hanna said he reads the talks as "a preemptive move by IBM to take Sun off the table," to keep rivals like Cisco from getting their hands on a bigger piece of the data center pie.
IBM may be betting that it can do a better job than Sun in taking advantage of these emerging technologies, and use it to compete better against Cisco and HP.
The Wall Street Journal reported that IBM has offered between $10-$11 a share for Sun, the Java software maker, or a total value of $6.5 billion, net of cash.
That's the kind of deal size big companies will be comfortable with as they look to plug holes in their software, services and hardware offerings for enterprises, said Highland Capital's Bell.
Bell, a former chief executive of information storage company StorageNetworks, said small acquisitions were unlikely to satisfy the appetites of large companies.
Rather, companies with market values of between $1 billion and $10 billion would be the focus of acquisitions, he said.
The thinking is more like, "If I can find a larger player, maybe I can accelerate and leapfrog, maybe 12 to 24 months, on my competitor," he added.
Agencies
The weak economy notwithstanding, Cisco this week announced its entry into the computer server market now dominated by HP and International Business Machines Corp.
And IBM is in talks to buy high-end server maker Sun Microsystems Inc, sources with knowledge of the matter said on Wednesday.
As these companies deliberately step on each other's toes to search for growth, analysts and bankers say the deals market is warming up with cash-rich tech powerhouses hunting for niche technologies at bargain prices.
Virtualization software maker Citrix Systems Inc, storage company NetApp Inc, and network equipment makers Brocade Communications Systems Inc and Juniper Networks Inc are among those that could catch the eye of tech bellwethers looking to compete in new markets, analysts said on Wednesday.
"If I own 60 percent of a market, maybe I can get to 65 percent, but really, I need a new market," said Peter Bell, a venture capitalist at Highland Capital Partners, of the dilemma that faces maturing tech companies.
Morningstar Inc analyst Rick Hanna agreed: "They're all in the war for increasing the total addressable market."
The biggest tech companies have been trying to become one-stop storefronts for business customers for years, offering software, services and hardware for everything from the data center to the desktop as their own core businesses slow down.
The larger impetus behind any deal making is the advent of two hot trends: virtualization and "cloud computing."
Virtualization software lets businesses reduce space and energy usage in their data centers, while cloud computing technologies let them access applications over the Web. Data centers house computing equipment used by companies.
The "arms race" among companies like Cisco, HP and IBM did not happen overnight, Jeff Bistrong, a technology banker at Harris Williams & Co, an investment banking firm said on Thursday.
HP's purchase of technology outsourcer Electronic Data Systems last year already pit it directly against IBM.
"What's different is we're in a major recession, enterprise values have been significantly diminished," Bistrong said.
Companies held on to their cash in the past few months as they assessed the damage to their business from the recession, said Howard Lanser, a mergers and acquisition analyst at Robert W. Baird said on Wednesday.
But now, the price tags of targets are cheap enough to justify longer-term strategic goals and tech companies that have cash will make the "buy decision," Lanser said.
Cisco has $29.4 billion in cash, IBM has $12.7 billion and HP $11.2 billion, according to recent financial statements.
Bargain Hunting
Companies like Microsoft Corp, EMC Corp and Dell Inc also may seek to own choice pieces of the "cloud," as computing becomes more Web-based.
Microsoft has been bullish on cloud computing, but its grip on data center operating systems could be threatened by the move toward remote data centers, forcing the software maker to search for acquisitions, Morningstar's Hanna said.
Microsoft CEO Steve Ballmer said at a conference on Thursday the company plans to buy up to 20 companies this year, with deal sizes ranging from $10 million to $500 million.
EMC, the world's largest maker of corporate storage, may also look for deals to improve its services offering, analysts said.
EMC itself could get acquired by Cisco; the two companies talked about a deal last year, a person familiar with the matter told Reuters in February.
Analysts said the timing of IBM's move to buy Sun illustrates the partly strategic, partly opportunistic thinking of companies that could drive dealmaking in the next year.
"Cisco has clearly laid out all its cards on the market," said Hanna, referring to the networking giant's plans to sell servers for data centers.
Hanna said he reads the talks as "a preemptive move by IBM to take Sun off the table," to keep rivals like Cisco from getting their hands on a bigger piece of the data center pie.
IBM may be betting that it can do a better job than Sun in taking advantage of these emerging technologies, and use it to compete better against Cisco and HP.
The Wall Street Journal reported that IBM has offered between $10-$11 a share for Sun, the Java software maker, or a total value of $6.5 billion, net of cash.
That's the kind of deal size big companies will be comfortable with as they look to plug holes in their software, services and hardware offerings for enterprises, said Highland Capital's Bell.
Bell, a former chief executive of information storage company StorageNetworks, said small acquisitions were unlikely to satisfy the appetites of large companies.
Rather, companies with market values of between $1 billion and $10 billion would be the focus of acquisitions, he said.
The thinking is more like, "If I can find a larger player, maybe I can accelerate and leapfrog, maybe 12 to 24 months, on my competitor," he added.
Agencies
Saturday, March 21, 2009
What is the latest buzz on Sun, IBM deal?
Whether it is mere speculation or a fact , the combination of two IT giants -- IBM and Sun Microsystems -- will surely alter the dynamics of the IT services market.
Of recent times, everybody is racing to offer hardware-software services and own data centres. We have seen that happen with Cisco s Unified Computing Systems, HP bought EDS, now IBM is looking at Sun.
There is no official comment from the two companies, but if the deal goes through it will give IBM a bigger control of the market and make it a fitting rival for HP, Dell and Microsoft.
Together, IBM and Sun would have about 65% of the market for server computers running the Unix operating system and 42% of the total server market, measured by the dollar value of the market.
Like Sun's Java and Solaris, the operating systems have gained substantial market share over the years. Similarly, Sun could give it some extra hardware market share specifically in servers.
However, reports indicate that Sun has not been doing well ever since the global recession began last September. Reports indicate that IBM may pay at least $6.5 billion in cash for the deal, which would be a 100% premium over Tuesday's closing price for Sun.
In last year's fourth quarter, IBM led in the global server market revenue with $4.9 billion in sales, about 36% of the market. HP was No. 2 with $3.9 billion in sales ie, about 29% of the market. Dell, with $1.4 billion in sales, and Sun, with about $1.3 billion, were a distant No. 3 and No. 4.
However, Sun's Solaris servers have a strong presence in the premium market, which is seen as more profitable. That is why that valuation may be justifiable for IBM.
But Sun's recent acquisition of StorageTek for $4.1 billion was termed as a hogwash, mainly because it did not go well with Sun and ended up in cold waters.
With customers like HDFC Bank, Punjab National Bank (PNB) and Tata Teleservices, Sun's strong presence in the financial services and telecom domains has been the envy of its rivals.
But in case of a merger, issues like having a number of common customers and how to merge the two global brands will come up. As a Sun employee, said, Sun employees are concerned about the future of our products if the acquisition happens, since there is a significant overlap between our products and that of IBM s.
Sun's corporate communications office terms it as a mere speculation and refused to comment on the rumour . So did the IBM communication team, saying they have no reactions from their headquarters and cannot comment on the issue.
Meanwhile, T.R. Madan Mohan, managing partner, Browne and Mohan, said that the WSJ picked up the news from the blog of a Sun employee.
According to him, the deal may not come through, but given the market cap of Sun, which is just about $ 2 billion, and IBM is supposed to have quoted $ 6.5 to $ 6.8 billion that is a very good valuation for a company that has been dithering.
Similarly, Sun's strengths are in government, BFSI and telecom. In telecom, it has some marque clients such as NTTDocomo, Dialog, Telefunken, Vodafone, etc which run mission-critical applications.
IBM has not been able to move into these accounts globally, unlike the easy entry the company had with Bharti Airtel, Aircel, Vodafone, Idea in India. By acquiring Sun, IBM will get access to these critical markets and benefit from the Java/My SQL communities.
CXOtoday
Of recent times, everybody is racing to offer hardware-software services and own data centres. We have seen that happen with Cisco s Unified Computing Systems, HP bought EDS, now IBM is looking at Sun.
There is no official comment from the two companies, but if the deal goes through it will give IBM a bigger control of the market and make it a fitting rival for HP, Dell and Microsoft.
Together, IBM and Sun would have about 65% of the market for server computers running the Unix operating system and 42% of the total server market, measured by the dollar value of the market.
Like Sun's Java and Solaris, the operating systems have gained substantial market share over the years. Similarly, Sun could give it some extra hardware market share specifically in servers.
However, reports indicate that Sun has not been doing well ever since the global recession began last September. Reports indicate that IBM may pay at least $6.5 billion in cash for the deal, which would be a 100% premium over Tuesday's closing price for Sun.
In last year's fourth quarter, IBM led in the global server market revenue with $4.9 billion in sales, about 36% of the market. HP was No. 2 with $3.9 billion in sales ie, about 29% of the market. Dell, with $1.4 billion in sales, and Sun, with about $1.3 billion, were a distant No. 3 and No. 4.
However, Sun's Solaris servers have a strong presence in the premium market, which is seen as more profitable. That is why that valuation may be justifiable for IBM.
But Sun's recent acquisition of StorageTek for $4.1 billion was termed as a hogwash, mainly because it did not go well with Sun and ended up in cold waters.
With customers like HDFC Bank, Punjab National Bank (PNB) and Tata Teleservices, Sun's strong presence in the financial services and telecom domains has been the envy of its rivals.
But in case of a merger, issues like having a number of common customers and how to merge the two global brands will come up. As a Sun employee, said, Sun employees are concerned about the future of our products if the acquisition happens, since there is a significant overlap between our products and that of IBM s.
Sun's corporate communications office terms it as a mere speculation and refused to comment on the rumour . So did the IBM communication team, saying they have no reactions from their headquarters and cannot comment on the issue.
Meanwhile, T.R. Madan Mohan, managing partner, Browne and Mohan, said that the WSJ picked up the news from the blog of a Sun employee.
According to him, the deal may not come through, but given the market cap of Sun, which is just about $ 2 billion, and IBM is supposed to have quoted $ 6.5 to $ 6.8 billion that is a very good valuation for a company that has been dithering.
Similarly, Sun's strengths are in government, BFSI and telecom. In telecom, it has some marque clients such as NTTDocomo, Dialog, Telefunken, Vodafone, etc which run mission-critical applications.
IBM has not been able to move into these accounts globally, unlike the easy entry the company had with Bharti Airtel, Aircel, Vodafone, Idea in India. By acquiring Sun, IBM will get access to these critical markets and benefit from the Java/My SQL communities.
CXOtoday
Monday, October 6, 2008
APAC big market for collaboration tools: Cisco
New Collaboration Portfolio
The new collaboration portfolio is designed to help companies accelerate business processes, increase productivity and speed innovation With the global recession having a major impact on the US companies, Cisco, the leaders in routers and switches sees a high growth in the Asia-Pacific region for the new collaboration portfolio that helps companies accelerate business processes, increase productivity and speed innovation.
Targeting the current $34 billion global market for what are called collaboration products, Cisco said it will target users, particularly on the move, delivering the applications across platforms like Windows, Mac OS, and even mobile phones running on Symbian, BlackBerry and Windows OS. The market for such tools and services is projected to grow to $48 billion by 2011.
Reports indicate that it is slated as the fastest growing advanced technology in Cisco's product portfolio. The new collaboration portfolio is now looking at emerging countries in Asia like India, China, Middle East, Russia, South Africa as high growth markets. The company has initially rolled out 40 products and 800 capabilities that are very significant for the Indian market.
Talking to CIOL, Manjula Talreja, VP, strategy & business operations, software group, Cisco said, "even though the foundation for this product was laid in the US and so has about 70 percent market share, still more than 30 percent comes from the emerging markets spread across Asia-Pac, Africa, South America. But in the coming years it is likely that it will become a 50:50 ration."
The US slowdown could help increase the numbers in the emerging markets to achieve this target sooner, says Talreja.
The networking giant said the new set of tools would enable enterprises and executives to work across platforms and devices seamlessly wherever they are.
The company is tapping on companies in particular verticals like IT, ITES, manufacturing, government, services, retail and heathcare for deployment these advanced technologies.
The new set of tools comprising Cisco Unified Communications, Cisco TelePresence and Cisco WebEx Connect, are designed to integrate with existing IT infrastructure, web services and business application to allow users customise applications and services.
The new set of collaboration products use the network as a platform to inter-operate with business applications, communication devices and web-based tools.
"Cisco collaboration strategy is a fusion of unified communication technology, video, telepresence and web 2.0 technologies that will accelerate business processes and speed up innovation," said Ranajoy Punja, VP, business development advanced technologies, Cisco India, SAARC.
The acquisition of the Santa Clara-based WebEx Communication Inc followed by and calendaring company PostPath Inc and IM firm Jabber Inc helped Cisco roll out the current products.
"Collaboration is the next phase of Internet and the centre of this phase is the network. Our network platform uses open-standards protocols to expose critical collaboration services like instant messaging," said Don Proctor, senior VP, software group, Cisco.
He said the portfolio will use this network architecture to create an integrated collaboration experience that has everything from simple text messaging to Cisco TelePresence sessions.
The new collaboration portfolio is designed to help companies accelerate business processes, increase productivity and speed innovation With the global recession having a major impact on the US companies, Cisco, the leaders in routers and switches sees a high growth in the Asia-Pacific region for the new collaboration portfolio that helps companies accelerate business processes, increase productivity and speed innovation.
Targeting the current $34 billion global market for what are called collaboration products, Cisco said it will target users, particularly on the move, delivering the applications across platforms like Windows, Mac OS, and even mobile phones running on Symbian, BlackBerry and Windows OS. The market for such tools and services is projected to grow to $48 billion by 2011.
Reports indicate that it is slated as the fastest growing advanced technology in Cisco's product portfolio. The new collaboration portfolio is now looking at emerging countries in Asia like India, China, Middle East, Russia, South Africa as high growth markets. The company has initially rolled out 40 products and 800 capabilities that are very significant for the Indian market.
Talking to CIOL, Manjula Talreja, VP, strategy & business operations, software group, Cisco said, "even though the foundation for this product was laid in the US and so has about 70 percent market share, still more than 30 percent comes from the emerging markets spread across Asia-Pac, Africa, South America. But in the coming years it is likely that it will become a 50:50 ration."
The US slowdown could help increase the numbers in the emerging markets to achieve this target sooner, says Talreja.
The networking giant said the new set of tools would enable enterprises and executives to work across platforms and devices seamlessly wherever they are.
The company is tapping on companies in particular verticals like IT, ITES, manufacturing, government, services, retail and heathcare for deployment these advanced technologies.
The new set of tools comprising Cisco Unified Communications, Cisco TelePresence and Cisco WebEx Connect, are designed to integrate with existing IT infrastructure, web services and business application to allow users customise applications and services.
The new set of collaboration products use the network as a platform to inter-operate with business applications, communication devices and web-based tools.
"Cisco collaboration strategy is a fusion of unified communication technology, video, telepresence and web 2.0 technologies that will accelerate business processes and speed up innovation," said Ranajoy Punja, VP, business development advanced technologies, Cisco India, SAARC.
The acquisition of the Santa Clara-based WebEx Communication Inc followed by and calendaring company PostPath Inc and IM firm Jabber Inc helped Cisco roll out the current products.
"Collaboration is the next phase of Internet and the centre of this phase is the network. Our network platform uses open-standards protocols to expose critical collaboration services like instant messaging," said Don Proctor, senior VP, software group, Cisco.
He said the portfolio will use this network architecture to create an integrated collaboration experience that has everything from simple text messaging to Cisco TelePresence sessions.
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