Parallels Weighs in On Possible Cisco/VMware Deal
The recent
speculation that Cisco is eyeing VMware for a buyout led
Parallels CEO Serguei Beloussov to contact me with a response. Beloussov is one of
the real smart guys in this industry, with a proven track record going back many
years. It's worth listening to what he has to say. Here's his take:
If there’s any truth to the rumor that Cisco is pursuing VMware, I
believe it's unlikely that either VMware or EMC would be sold at the speculated
prices. VMware is performing well and growing quickly, so there's no rush to
sell when the markets are down. It is also unlikely that EMC would sell VMware
separately, as VMware is the main growth engine and largest technology asset for
EMC. On the other hand, Cisco is unlikely to want to own EMC's high-end storage
business.
With that in mind, if a deal
does go through, Cisco will become a dangerous competitor to IBM, HP, Dell and
others, which would create complications that need to be considered. However,
Cisco has done an amazing job of integrating various assets -- I found its
recent integration of telephony companies very impressive. If Cisco did come
to own VMware and/or EMC, the IT industry would change a lot, but it would
have a positive impact on Parallels, as we're an ideal partner for IBM, HP,
and Dell, among others.
Putting aside the P.R. aspects of Beloussov's last
sentence, I agree that Cisco will become a chief competitor for some of the
large companies mentioned. But more than that, they'll become serious rivals
with Microsoft in the virtualization space. I doubt Microsoft would welcome such
a move. It's hard enough trying to keep up with VMware as it is; if the huge
resources of Cisco are thrown into the mix, that could make keeping up with the
Joneses that much harder.
What's your take? As
Frasier Crane says, "
I'm listening..."
Posted by Keith Ward on 02/18/2009 at 12:48 PM