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Cisco Systems, Inc. (CSCO)

  • Fri, Nov. 20, 8:54 AM
    • Cisco (NASDAQ:CSCO) is buying Acano, a London-based provider of group collaboration, unified communications, and audio/video conferencing software, for $700M in cash (presumably offshore) and assumed equity awards, plus retention-based incentives. The deal is expected to close in the April quarter. (blog post)
    • Cisco: "Acano's hardware and software includes gateways, and video and audio bridging technology that allows customers to connect video systems from multiple vendors across both cloud and hybrid environments ... Today, less than 10 percent of the conference rooms in the world are connected via video. However, there is a massive market shift underway in collaboration -- customers want the ability to easily connect from anywhere, from dedicated hardware endpoints to sharing video on a mobile phone ... Acano's technology and expertise will enable us to accelerate our development in the key areas of interoperability and scalability."
    • Cisco's collaboration revenue (covers videoconferencing hardware, the WebEx and Jabber collaboration software lines, and other products) rose 17% Y/Y in the October quarter to $1.2B, with the help of a videoconferencing refresh. The company faces collaboration software competition both from established players such as Microsoft and Citrix, and from upstarts such as Google (Hangouts), LogMeIn (, and Slack. Slack recently raised funding at a $2.8B valuation.
    • New CEO Chuck Robbins hasn't been shy about making acquisitions. Other recent purchases include OpenDNS (DNS security software/services), Lancope (security analytics software), and MaintenanceNet (service contract management software)
    | Fri, Nov. 20, 8:54 AM | 2 Comments
  • Mon, Nov. 16, 3:44 AM
    • Ericsson (NASDAQ:ERIC) has quashed a recent media report that claimed Cisco (NASDAQ:CSCO) was seeking to buy the Swedish networking giant, stating there haven't been any merger talks.
    • "We note that there are rumors in the market regarding an acquisition of Ericsson by Cisco possibly spurred by the recent announcement of a partnership between our two companies," Ericsson CEO Hans Vestberg said.
    • Cisco shot down the report shortly after it surfaced on Friday.
    | Mon, Nov. 16, 3:44 AM | 2 Comments
  • Fri, Nov. 13, 3:49 PM
    • A Swedish media report stating Cisco (CSCO -6%) is looking to buy mobile infrastructure/services giant Ericsson (ERIC - unchanged) led the latter's shares to briefly rise as much as 9.6% before giving back their gains. Markets are evidently skeptical.
    • Worth noting: Cisco CEO Chuck Robbins just stated his company isn't looking to make large acquisitions. and is instead focusing on "small strategic" deals. Ericsson is currently worth $31B.
    • Cisco and Ericsson are four days removed from announcing a comprehensive technology/reseller partnership. Ericsson will offer Cisco's switches/routers to mobile carriers in tandem with its own mobile infrastructure hardware and network services, Cisco will pair Ericsson's OSS/BSS network management software with its offerings, and the companies will form a "joint initiative focused on SDN/NFV and network management and control."
    • Update: Cisco tells CNBC reports it's looking to buy Ericsson are "not true."
    | Fri, Nov. 13, 3:49 PM | 1 Comment
  • Tue, Oct. 27, 10:51 AM
    • Cisco (CSCO -0.1%) is buying Lancope, a security analytics software firm that provides tools for analyzing network traffic, identifying and tracking apps, viewing global threat intelligence, and identifying the source of a security event. The company is paying $452.5M in cash and assumed equity awards, and will also provide retention incentives.
    • Cisco: "With Lancope, Cisco's portfolio of security solutions adds an additional capability of network behavior analytics that extends protection further into the network." Lancope's software complements Cisco's existing security appliance and software offerings, and fits with the company's strategy of embedding security features throughout its networking product line.
    • Also being acquired: ParStream, a German provider of a distributed analytics database for IoT-related data. Terms are undisclosed.
    • Cisco: "Using innovative compression and indexing capabilities, ParStream’s technology helps customers access data faster and at scale, rapidly analyzing and filtering billions of records and getting information to the business in near real-time. This acquisition complements Cisco’s current data and analytics portfolio, improving our ability to provide analytics at the edge of the network, where data is increasingly being generated and in huge volume."
    • The ParStream acquisition follows the June launch of Cisco's IoT System, which aims to deliver an end-to-end networking solution (featuring hardware, software, and services) for Web-connected embedded devices. CRN observes ParStream could compete with HP's (NYSE:HPQ) Vertica analytics database.
    • Recent Cisco acquisitions: OpenDNS (DNS security software/services, $635M), MaintenanceNet (cloud contract-management software, $139M), Neohapsis (security advisory services), Embrane (virtual appliance management software).
    | Tue, Oct. 27, 10:51 AM | 7 Comments
  • Mon, Oct. 12, 6:32 PM
    • Thanks to VMware's (NYSE:VMW) 8.1% drop in regular trading, the official value of Dell's buyout offer for EMC ($24.05/share in cash + 0.11 shares of a VMware tracking stock) fell from $33.15/share to $32.00/share. However, that's still 13% above EMC's $28.35 closing price.
    • Part of the discount likely stems from expectations VMware tracking stock will trade at a discount to its regular shares, given the tracking stock will have no voting rights or access to dividends (should VMware begin paying one). Nonetheless, some M&A arb traders see a compelling opportunity, assuming the tracking stock trades at a moderate discount.
    • There's speculation another tech giant could bid for EMC during its go-shop period. But there haven't been any formal reports of buyout interest, and EMC's current price suggests markets are skeptical of a rival bid arriving. HP (NYSE:HPQ) used today's news to trash-talk EMC/Dell - "Two of our largest competitors are attempting a highly distracting, multi-year merger, just as we are launching two new, focused companies." - while Dell server/networking rival Cisco (NASDAQ:CSCO) affirmed its partnership with EMC.
    • Meanwhile, several analysts defended VMware as shares tumbled thanks to the EMC/Dell news and VMware's Q3 pre-announcement - revenue and EPS are expected to top estimates, but billings growth of 3% Y/Y fell short of expectations. Cowen's Gregg Moskowitz: "While we believe this deal certainly could have been better structured (i.e. there is no collar on VMW's stock), and the billings were disappointing, the selloff nonetheless looks clearly overdone, as we expect no meaningful impact to VMW's strategy or operations."
    • MKM's Kevin Buttigieg: "At the current intraday price of $71, VMW is 13x CY16 consensus EPS excluding net cash of $13/share, a level we think presents tremendous value, though likely requires patience given uncertainty around the Dell deal." On this morning's conference call, departing EMC CEO Joe Tucci suggested Dell is looking to up its VMware stake over time.
    | Mon, Oct. 12, 6:32 PM | 25 Comments
  • Thu, Jul. 23, 8:37 AM
    • France's Technicolor (OTCQX:TCLRY) is buying the set-top box and cable modem business from Cisco Systems (NASDAQ:CSCO) for €550M (about $600M) in cash and stock, after many Cisco investors called for the company to get out of set-tops entirely despite billions invested.
    • About $450M of the deal is in cash and $150M in stock. The deal is expected to close in Q4 or the first quarter of next year, after regulator OKs.
    • Set-tops have been in decline, making for a drag on Cisco's video business. Google offloaded its own Motorola Home business to Arris Group for more than $2B last year.
    • Premarket: CSCO +1%.
    | Thu, Jul. 23, 8:37 AM | 6 Comments
  • Tue, Jul. 14, 7:08 PM
    • "Cisco's (NASDAQ:CSCO) analysis suggests that the average large enterprise has 54-plus security vendors, with chief information officers finding it an extremely tough and convoluted landscape to manage," reports UBS' Amitabh Passi in a Tuesday note. "We don't believe Cisco has any delusions of replacing 50-plus vendors with just itself, but the goal is to simplify the landscape."
    • Passi adds new CEO Chuck Robbins wants to grow Cisco's share of enterprise security infrastructure spend to 20%-30% from a current 9%, something very tough to do via organic growth alone. He adds John Chambers (still chairman) has a "mandate" to build out Cisco's security ops.
    • After meeting with Cisco security execs, BMO's Tim Long also suggests more M&A is on tap. "Cisco believes that one of the key changes that will occur in the industry over the next few years is that customers will increasingly move from point vendors that provide niche solutions to companies that can provide an architectural approach ... This should also drive increased industry consolidation."
    • Passi doubts Cisco will go after a bigger fish such as Check Point or Palo Alto Networks, and instead expects targeted purchases in growth markets where the company has little or no presence, such as identity access, data loss management, and app security testing. Cisco recently spent $635M to buy DNS security tech provider OpenDNS.
    • Security's share of IT spend has been steadily growing, thanks in no small part to a flurry of high-profile cyberattacks. Cisco has held its own within the segment, but various smaller firms (FireEye, Fortinet, Palo Alto, etc.) have grown much faster.
    • Last month: Cisco outlines security strategy
    | Tue, Jul. 14, 7:08 PM | 4 Comments
  • Tue, Jul. 7, 12:32 PM
    • Cisco (CSCO -0.8%) is acquiring MaintenanceNet, a provider of cloud software for managing, renewing, and selling recurring service contracts, for $139M in cash and retention incentives.
    • In a blog post, Cisco exec Debbie Dunham notes her company has been offering joint solutions with MaintenanceNet since 2009 to Cisco distributors and resellers. "MaintenanceNet’s software identifies customers with service contracts that are coming up for renewal, overdue, or with products that are not yet covered. Their low-touch solution enables automated quoting, notifications, and, in some cases, ordering online. This helps Cisco partners capture high-volume and low-dollar sales opportunities that may risk being overlooked."
    • The deal follows Cisco's $635M deal to buy DNS security software/services provider OpenDNS. In late 2012, the company set a goal of doubling software revenue within 5 years.
    | Tue, Jul. 7, 12:32 PM | Comment!
  • Tue, Jun. 30, 8:50 AM
    • Continuing its efforts to profit from growing corporate cybersecurity spend and keep fast-growing upstarts (Palo Alto Networks, FireEye, etc.) at bay, Cisco (NASDAQ:CSCO) is acquiring OpenDNS, a provider of cloud-based cybersecurity software and services (e.g. malware/phishing-protection, Web filtering, threat intelligence) that revolve around handling and analyzing domain name requests.
    • Cisco is paying $635M in cash and assumed equity awards. The deal is expected to close in FQ1 (the October quarter). The purchase is Cisco's first big acquisition since Chuck Robbins was named John Chambers' successor.
    • OpenDNS' products are offered both to businesses and individuals. The company claims 65M+ users, including workers at "thousands of companies from Fortune 500’s to small businesses." It handles over 60B daily DNS queries requests (over 2% of all global requests). For now, partners include a slew of Cisco rivals, such as FireEye, Check Point, and Aruba Networks.
    • Cisco: "Combining OpenDNS' broad visibility, unique predictive threat intelligence and cloud platform with Cisco's robust security and threat capabilities will increase awareness across the extended network, both on- and off-premise, reduce the time to detect and respond to threats, and mitigate risk of a security breach." The company recently outlined a security strategy focused on embedding security features throughout its hardware lineup, as well as protecting endpoints.
    • The acquisition could pose a challenge to DNS and IP address management hardware/software vendor Infoblox (NYSE:BLOX), which has been growing its security exposure.
    • Past Cisco security acquisitions: ThreatGRID, SourceFire
    • Yesterday: Cisco unveils IoT System, launches 15 new products
    | Tue, Jun. 30, 8:50 AM | 2 Comments
  • Tue, Jun. 9, 1:42 PM
    • Summit Research's Srini Nandury thinks Nimble Storage's (NYSE:NMBL) recent rally has been fueled by M&A hopes ... and considers them justified. He believes Cisco (NASDAQ:CSCO), EMC, and NetApp (NASDAQ:NTAP) could be among the larger OEMs willing to bid for the hybrid storage array upstart.
    • Nandury: "Given that Nimble is one of the best Hybrid storage assets in the market, any buyout offer for Nimble will likely trigger a bidding war as we had seen previously with both Data Domain and 3Par. And, given that Nimble is executing solidly in both SMB and enterprise storage environments, and is expected to roll out both NAS and Object storage in the near-term (12-18 months) and will most likely get acquired, we reiterate our BUY rating on the stock and maintain our $40 PT."
    • EMC has bought flash array vendors XtremIO and DSSD; Cisco has bought flash vendor Whiptail; and hard drive giants Seagate and Western Digital have also used M&A to expand their flash offerings. NetApp has relied more on internal R&D to flesh out its product line, but the company's recent top-line woes and CEO change have fueled speculation it could turn to M&A.
    • Of note: With a market cap of $2.2B (a deal premium could bring it near $3B), Nimble would be digestible for larger industry players, but not cheap.
    | Tue, Jun. 9, 1:42 PM | 5 Comments
  • Wed, Jun. 3, 1:26 PM
    • IBM (IBM +0.1%) has acquired Blue Box, a provider of managed cloud services for companies deploying private and hybrid clouds based on the open-source OpenStack cloud infrastructure (IaaS) platform.
    • Cisco (CSCO +0.1%) is buying Piston Cloud Computing, a provider of software (called CloudOS) for managing and deploying services on commodity servers running OpenStack, as well as popular big data/analytics software platforms such as Hadoop and Spark. Terms for both deals are undisclosed.
    • IBM, whose SoftLayer unit already offers OpenStack services, will use Blue Box to "help businesses rapidly integrate their cloud-based applications and on-premises systems into OpenStack-based managed cloud," and that the deal allows it to offer a remotely-managed OpenStack private cloud solution.
    • Cisco asserts Piston and its engineers will "help accelerate the product, delivery, and operational capabilities" of its Intercloud platform, which (via service provider partners) provides a network of OpenStack cloud infrastructures running on Cisco hardware and software, and within which workloads can be moved between data centers. It also expects Piston to strengthen its OpenStack private cloud offering, the fruits of last year's acquisition of private cloud services provider Metacloud.
    • IBM ended Q1 on a $3.8B/year run rate for its various "cloud delivered as a service" offerings. Synergy Research believes IBM is the third-largest player in the public/private/hybrid cloud services space, trailing Amazon (easily the market leader) and Microsoft.
    • Many tech/telecom giants have embraced OpenStack in their efforts to compete against Amazon, Microsoft, and Google's proprietary platforms. Rackspace (RAX +0.7%) remains a top independent OpenStack provider
    | Wed, Jun. 3, 1:26 PM | 4 Comments
  • Wed, May 13, 5:33 PM
    • During Cisco's (NASDAQ:CSCO) FQ3 earnings call, John Chambers said he "would not bet" on a security M&A rumor heard today.
    • That was an apparent reference to FireEye (NASDAQ:FEYE), whose shares jumped on unconfirmed rumors that Cisco had made a bid.
    • FireEye has fallen to $41.71 in AH trading following Chambers' remarks. Shares are still up $0.41 from Monday's close.
    | Wed, May 13, 5:33 PM | 14 Comments
  • Wed, Apr. 1, 12:27 PM
    • Cisco (CSCO -1%) is buying Embrane, a provider of virtual (software-based) firewall and load balancer appliances, and (perhaps more importantly for Cisco) a software platform for deploying and managing virtual appliances (whether Embrane's or a third party's). Terms are undisclosed.
    • Embrane's team is joining Cisco's Insieme SDN/switching unit; the networking giant argues Embrane's offerings will strengthen the feature set of its Nexus data center switch line and ACI SDN/networking virtualization platform (seeing healthy growth, in pitched battle with VMware's NSX).
    • SDXCentral observes Embrane could help Cisco support higher-level (Layer 4-7) network traffic management via ACI. Along the way, Embrane's IP could help Cisco better address a virtual networking/security appliance market that (by enabling commodity servers to be quickly turned into switches, firewalls, etc.) has been easily outgrowing the market for physical appliances.
    | Wed, Apr. 1, 12:27 PM | 3 Comments
  • Wed, Feb. 25, 3:16 PM
    • Bloomberg reports HP (HPQ -10.1%) is in talks to acquire enterprise Wi-Fi hardware/software provider Aruba Networks (ARUN +22.5%), and that a deal could be announced as soon as next week. Aruba has skyrocketed on the report, and has taken rival Ruckus (RKUS +4.7%) higher with it. Aruba's market cap is now around $2.5B.
    • Aruba is the enterprise Wi-Fi market's #2 player - behind Cisco (NASDAQ:CSCO), which towers over the space - and HP is also in the top-5. IDC estimates Cisco, Aruba, Ruckus, and HP respectively had Q2 2014 enterprise Wi-Fi shares of 46.8%, 11.8%, 6.2%, and 4.5%.
    • HP, whose shares have plunged today due to an FQ1 revenue miss and soft guidance, saw its total networking revenue drop 11% Y/Y in FQ1 - "execution issues" in the U.S. and China were blamed. The IT giant has suggested it's open to making enterprise acquisitions ahead of its PC/printing spinoff.
    | Wed, Feb. 25, 3:16 PM | 5 Comments
  • Dec. 10, 2014, 5:13 PM
    • Neohapsis provides security advisory services to Fortune 500 companies in fields including risk management, compliance, cloud services, and mobile. Cisco's (NASDAQ:CSCO) acquisition price is undisclosed.
    • Neohapsis will be added to Cisco's security services unit. formed a year ago with the goals of better supporting Cisco's security hardware and offering new managed services. Many peers have also been adding to their security service lineups, as enterprises increasingly look for integrated hardware/software/services solutions to deal with security threats.
    • Cisco, looking to keep pace with smaller, faster-growing rivals such as Palo Alto Networks and Fortinet, bought malware-protection software firm ThreatGRID in May, and launched a managed threat defense service a month before that. Last year, it struck a $2.7B deal to buy intrusion prevention system (IPS) vendor SoureFire.
    | Dec. 10, 2014, 5:13 PM | Comment!
  • Oct. 22, 2014, 9:28 AM
    • Confirming yesterday's Bloomberg report, Cisco (NASDAQ:CSCO) and EMC state the latter will take control of the companies' VCE JV. Cisco's stake will be cut to 10% from 35%, VMware (currently has a sub-10% stake) will maintain an interest, and the business will be included in EMC's income statement after the deal closes in Q4.
    • The companies add VCE was on a $2B/year run rate for its Vblock converged server/storage/networking systems exiting Q3, and that the quarter was its sixth consecutive one of 50%+ Y/Y growth. VCE previously forecast 2014 sales of $1.8B. Gartner and IDC have ranked VCE the leader in a converged infrastructure market that also features Oracle, H-P, IBM, and Dell.
    • The Vblock like makes use of Cisco's servers and data center switches, EMC's storage systems, and VMware's virtualization and systems management software. Cisco, EMC, and VCE have "existing and renewed multi-year engineering, resell and support agreements" between them.
    • Nonetheless, Cisco's decision to cut its VCE stake could pave the way for it to directly compete against Vblock through its UCS server ops, particularly given the recent launch of the UCS Mini (less powerful than Vblock hardware, but also a converged system).
    • Separately, EMC has issued nearly in-line guidance to go with its its mixed Q3 results: The company expects 2014 revenue of $24.5B and EPS of $1.90 vs. a consensus of $24.54B and $1.91.
    • EMC +0.7% premarket. CSCO +0.3%.
    | Oct. 22, 2014, 9:28 AM | Comment!
Company Description
Cisco Systems Inc is engaged in designing, manufacturing and selling of Internet Protocol (IP) based networking products and services related to the communications and information technology (IT) industry.