M&A [RUMOR]: Cisco grabs Nutanix

[update] TL;DR this appears to be rumor/speculation. One would think that such an acquisition would be prominent on Nutanix’s web site.

Its April fools, in May.

/sigh


Huge in the hyperconverged space (which, not so curiously, is where the day job is), and its setting up the battle lines between the major software/hardware players.

Cisco was already number 5 hardware vendor, and was bragging about “beating the white boxes“.

The last may be more wishful thinking than reality. I am not seeing much in the way of large scale infrastructure players deploying UCS. Rather its folks whom want a simpler converged infrastructure between switching and computing, when performance and capability aren’t the primary motivations, but purely management and single support phone number.

That is, Cisco has become, to some degree, the IBM of old.

As I remember, this did not end well for IBM. It took a while, but competitors found holes in the armor, and exploited them relentlessly. Here, Cisco doesn’t quite have the lock-in IBM had. So its declaration that it has killed off non-tier-1 nameplate systems is, well, at best, highly premature.

This said, Nutanix was working closely with Dell. Dell has a switch (Force10) and related capability. Cisco has UCS.

Curiouser and curiouser. As the article correctly notes, some folks will be badly injured by this, but I am not convinced their analysis is as thorough as they needed it to be. There is a secular change going on in the market, with the rise of hyperconverged systems, and their related bretheren, server SAN. Wikibon does, as usual, a bang up job on the analysis. Other sites provide good commentary on the analysis.

Basically, filers and alike, the architecture of the preceding decade, is dying. Albeit slowly, it is not in growth mode.

What this means is, given the growth in the hyperconverged space at 162% CAGR (!!!!!) is that the sea change in storage/computing is being driven by the hyperconverged appliances, and that organizations are in the long tail of providing support to legacy architectures for the existing SAN/NAS domain.

This is an existential challenge, not merely injurious, for those without a sane server SAN strategy. Nutanix started out as a hardware/software fused appliance, and migrated to become a software stack atop Dell hardware. Now UCS. But one thing we’ve noticed for years in our own tightly coupled aka hyperconverged systems … you can’t build these systems on crappy foundations. You need … as in you absolutely must have … performance for these systems to provide a meaningful impact. Which keeps much of the “lets build to the least possible acquisition/sales cost” crowd at bay, as they would require so many units to achieve the performance/capacity that we can achieve in far fewer, that it becomes cost ineffective to give serious consideration to these inefficient platforms.

Talk about validation of our ideas.

I do expect more M&A. Lots more. There are some folks with serious differentiation (gulp) and folks with software stacks.

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