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Cisco Systems, Inc. (CSCO)

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  • 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!
  • Oct. 21, 2014, 7:48 PM
    • Bloomberg reports EMC plans to announce tomorrow it's buying out much of Cisco's (NASDAQ:CSCO) stake in the companies' VCE JV, which sells high-end integrated server/storage/networking systems (the Vblock line). EMC owns 58% of VCE, and Cisco 35%.
    • The report shortly follows a statement from EMC that the company will be announcing a "new business development" tomorrow, to go with its Q3 report.
    • Taking a larger stake in VCE would allow EMC to recognize the fast-growing unit's sales in its quarterly results at a time when its standalone storage hardware sales remain pressured by high-end weakness. In May, VCE predicted its sales would rise 80% in 2014 to $1.8B.
    • Cisco stated in July it had invested $716M in VCE, and recorded $644M in losses related to it, since the JV's 2010 founding. CRN reported two weeks ago Cisco is thinking of "ending further financial investment in VCE."
    • Letting EMC take control of VCE would leave Cisco's server efforts focused on its UCS blade/rack server line (leveraged by VCE), which has been growing quickly itself and is now on a $3B/year run rate. Cisco recently added an integrated system to its UCS lineup (the UCS Mini), albeit one less powerful than VCE's systems.
    • EMC is now only up 1.1% AH. Shares were previously higher on hopes the "new business development" would be a VMware (NYSE:VMW) spinoff. VMware, meanwhile, is now only down 1.4% AH after providing light Q4 guidance.
    | Oct. 21, 2014, 7:48 PM | 6 Comments
  • Sep. 24, 2014, 2:33 PM
    • John Chambers has dismissed speculation Cisco (CSCO +1.3%) could make a bid for EMC (EMC -1.1%). "If [EMC CEO Joe Tucci] and I were going to do something here, we would have done it a year or two ago."
    • Likely an issue today: A Cisco deal would raise antitrust issues in the network virtualization/SDN software space, where VMware (VMW -0.3%) and Cisco have emerged as the early leaders. Also, Cisco's storage networking unit relies on OEM deals with EMC rivals (in addition to EMC).
    • Meanwhile, re/code reports Oracle (ORCL +1.5%), another company whose name was thrown around in EMC deal speculation, is also uninterested.
    • Recent reports stated EMC has held merger talks with H-P, but failed to agree (for now, anyway) on a price. Sources (possibly hoping to drum up M&A interest in EMC) added a deal with Cisco or Oracle was also possible. Re/code backs up the part about the H-P talks, while adding H-P was largely interested in owning VMware VMW via EMC.
    • Many on the Street still think EMC will make a deal before Tucci's planned Feb. 2015 retirement. Tucci hasn't named a successor yet; Argus' Jim Kelleher consider ex-CFO David Goulden, now the head of EMC's storage hardware/software unit, to be the favorite. VMware CEO Pat Gelsinger and Pivotal CEO Paul Maritz are also in the running.
    | Sep. 24, 2014, 2:33 PM | Comment!
  • Sep. 17, 2014, 8:24 AM
    • Cisco (NASDAQ:CSCO) has announced its intent to acquire Metacloud, a privately held company which deploys and operates private clouds for global organizations.
    • Since announcing its Intercloud strategy this past March, Cisco has been enlisting key technology partners and service and cloud providers, to accelerate the company's strategy to build the world's largest global Intercloud.
    • Metacloud's OpenStack-based cloud platform already delivers and remotely operates production-ready private clouds in a customer's data center.
    • The acquisition of Metacloud is expected to be completed in Q1 of FY2015.
    | Sep. 17, 2014, 8:24 AM | Comment!
  • Jun. 30, 2014, 1:24 PM
    • Assemblage offers Web-based online meeting, presentation broadcasting, screen-sharing, and whiteboarding apps that integrate with a variety of 3rd-party cloud services and support 40 different file types.
    • The purchase bolsters Cisco's (CSCO +0.7%) collaboration software unit, which is headlined by its WebEx (Web conferencing) and Jabber (IP-based voice, video, and messaging) tools. Terms are undisclosed.
    • The business has been a pocket of strength for Cisco: Though its total collaboration revenue fell 12% Y/Y in FQ3 (orders rose 4%) due to videoconferencing hardware weakness, WebEx revenue was up 7%.
    • Cisco recently struck a deal with Jive Software to integrate WebEx/Jabber with Jive's enterprise social networking software. The deal has fueled some speculation Cisco could make a bid for Jive.
    | Jun. 30, 2014, 1:24 PM | Comment!
  • Jun. 17, 2014, 9:29 AM
    • Cisco (CSCO) is buying Tail-f Systems, a Swedish provider of network orchestration software for carriers, for $175M in cash + retention incentives.
    • Tail-f's software enables the rapid provisioning of apps/services over networks featuring hardware and virtual appliances from multiple vendors. Its offerings can be used to enable SDN implementations (likely of particular interest to Cisco), but can also work with more conventional networks.
    • Light Reading notes AT&T and Deutsche Telekom are Tail-f clients - both are hatching big SDN initiatives that present challenges for Cisco - and that its revenue is believed to be below $30M. CEO Fredrik Lundberg insists Tail-f will continue its multi-vendor support post-acquisition.
    • The purchase follows Cisco's 2012 acquisitions of network management/planning software firm Cariden and policy control software vendor BroadHop, and provides a fresh use for its offshore cash. Cisco has set a goal of doubling its software sales from 2012-2017.
    • Carrier routing archrival Juniper bought network management software firm WANDL last year. Cyan (CYNI) is an independent player in the network orchestration space.
    | Jun. 17, 2014, 9:29 AM | Comment!
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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.