Pakistanis angry over detentions in Times Sq. case Monday, May 24, 2010
ISLAMABAD – Relatives of three men detained by Pakistan for alleged links to the suspect in the attempted Times Square bombing say the men are innocent.
They
AFP - Thursday, August 6TAIPEI (AFP) - - Taiwan's Beijing-friendly government on Wednesday denied boycotting an Australian film festival amid a row over the e
BERLIN (Reuters) - Chancellor Angela Merkel suffered a double blow on Thursday as a senior party ally in east German
Minister seeks closure of anti-Berlusconi websites Wednesday, December 16, 2009
ROME (AFP) - – The Italian government moved Tuesday to close down Internet sites encouraging further violence against Prime Minister Silvio Berlusconi, who
By ELAINE KURTENBACH,AP Business Writer AP - Wednesday, March 18SHANGHAI - Asia's stock market rally seemed to be running out of steam Wednesday, despite an
Edition:
U.S.
Africa
Arabic
Argentina
Brazil
Canada
China
France
Germany
India
Italy
Japan
Latin America
Mexico
Russia
Spain
United Kingdom
Home
Business
Business Home
Economy
Technology
Media
Small Business
Legal
Deals
Earnings
Social Pulse
Business Video
The Freeland File
Aerospace & Defense
Markets
Markets Home
U.S. Markets
European Markets
Asian Markets
Global Market Data
Indices
M&A
Stocks
Bonds
Currencies
Commodities
Futures
Funds
peHUB
World
World Home
U.S.
Brazil
China
Euro Zone
Japan
Mexico
Russia
India Insight
World Video
Reuters Investigates
Decoder
Politics
Politics Home
Election 2012
Campaign Polling
Political Punchlines
Supreme Court
Politics Video
Tech
Technology Home
MediaFile
Science
Tech Video
Tech Tonic
Social Pulse
Opinion
Breakingviews
Money
Money Home
Tax Break
Lipper Awards 2012
Global Investing
MuniLand
Unstructured Finance
Linda Stern
Mark Miller
John Wasik
James Saft
Analyst Research
Alerts
Watchlist
Portfolio
Stock Screener
Fund Screener
Personal Finance Video
Money Clip
Investing 201
Life
Health
Sports
Arts
Faithworld
Business Traveler
Entertainment
Oddly Enough
Lifestyle Video
Pictures
Pictures Home
Reuters Photographers
Video
Reuters TV
Reuters News
Article
Comments (0)
Follow Reuters
Facebook
Twitter
RSS
YouTube
Read
Naked prince pics ban reveals chastened British press
9:31am EDT
Microsoft rolls out first new logo in 25 years
12:19pm EDT
Tattoo infections in U.S. linked to contaminated ink
22 Aug 2012
Storm Isaac moves near Puerto Rico, seen becoming hurricane
|
5:05pm EDT
Data point to slow pace of healing in economy
2:21pm EDT
Discussed
138
Obama’s lead over Romney grows despite voters’ pessimism
122
Romney to announce vice presidential choice Saturday
94
Analysis: Are Israelis tough enough for a long war with Iran?
Sponsored Links
Pictures
Reuters Photojournalism
Our day's top images, in-depth photo essays and offbeat slices of life. See the best of Reuters photography. See more | Photo caption
Famous Canadians
Justin Bieber, Carly Rae Jepsen, Jim Carrey and Rachel McAdams and among a plethora of famous Canadian entertainers. Slideshow
"Hill of Horror"
The mining community gathers at a hill dubbed the "Hill of Horror" during a memorial service for miners killed during clashes. Slideshow
Analysis: Cisco, EMC partnership turning into rivalry
Tweet
Share this
Email
Print
Related News
Wall Street hits four-month high, boosted by Germany, Cisco
Thu, Aug 16 2012
Brocade CEO to resign, profit beats estimates
Thu, Aug 16 2012
Global stocks rise on Merkel remarks, dollar slips
Thu, Aug 16 2012
Cisco jumps on dividend hike, props up network gear makers
Thu, Aug 16 2012
Cisco still pessimistic on Europe, raises dividend
Wed, Aug 15 2012
Analysis & Opinion
Knight Capital’s filings reveal scant oversight focus on tech risks for board
Related Topics
Tech »
The Cisco logo is displayed at the technology company's campus in San Jose, California February 3, 2010.
Credit: Reuters/Robert Galbraith
By Nadia Damouni and Jim Finkle and Nicola Leske
Thu Aug 23, 2012 4:40pm EDT
(Reuters) - Cisco Systems Inc, the world's biggest network equipment maker, and EMC Corp, the leading data storage company, are increasingly encroaching on each other's turfs, in a sign their long partnership may be unraveling.
Cisco and EMC have for years collaborated on designing, marketing and cross-selling their products, choosing to go after corporate customers as allies instead of competitors. In 2009, they set up the VCE joint venture as a one-stop shop for data centers, bundling Cisco's networking equipment and servers with EMC's storage gear and software from EMC's VMware Inc subsidiary.
VCE has yet to turn a profit after three years, and relations between Cisco and EMC show signs of fraying, according to people familiar with the companies, who spoke on condition of anonymity.
Cisco has had internal discussions in the past year about making its own move into the storage market by acquiring one of EMC's competitors, according to one source. EMC has also considered partnering with or buying Cisco's smaller networking rivals, other sources said.
And in July, when EMC's VMWare announced plans to buy network technology start-up Nicira, Cisco was taken aback. Cisco had been eyeing Nicira as well and thought it had sealed a $750 million deal for the private company before VMware unexpectedly swooped in, people familiar with that deal said.
"There's no growth to speak of in the technology market. The only way they can grow is to grab share by stepping on somebody else's toes," said Fred Hickey, editor of The High-Tech Strategist newsletter, which is widely read by investors.
When asked for comment, representatives for Cisco and EMC said they were committed to their partnership. They declined to confirm or deny if they had plans to acquire or partner with other technology companies.
"EMC and Cisco remain partners and will continue to shape the future of the data center through a broad relationship spanning many strategic areas," said a Cisco spokesman.
"EMC is thoroughly committed to the strength and longevity of our Cisco partnership," said an EMC spokesman.
Officials with VMware did not respond to a request for comment. EMC owns 80 percent of VMware, while Cisco has a small 5 percent stake.
A TROUBLED VENTURE
As corporations cut back on IT spending in a weak global economy, experts said technology companies realized that they need to have comprehensive product offerings to drive growth.
Companies are increasingly looking to buy their technology in bundles in what is known as converged infrastructure, rather than purchasing items a la carte to assemble themselves. That has led to a wave of mergers and acquisitions, such as Hewlett-Packard Co's expansion in networking with its purchase of 3Com and Dell Inc's move into storage through its purchase of EqualLogic.
Cisco and EMC have long had an amicable relationship, with EMC CEO Joe Tucci, 65, and Cisco CEO John Chambers, 63, sharing a personal friendship that dated back more than 20 years to when they worked at the now defunct Wang Laboratories.
So when Chambers was asked on a conference call how VMware's acquisition of Nicira would affect Cisco, his unusually sharp tone raised the eyebrows of analysts. Chambers said the partnership with EMC has been strong, but he also made clear that Cisco would not shy from competition.
"We are going to be an open player, and we've shown in the marketplace when we compete, we can be really, really tough," Chambers said.
The increasing competition between Cisco and EMC raises questions about the future of their loss-making joint venture VCE, which stands for Virtual Computing Environment and last month named Cisco veteran Praveen Akkiraju as its CEO.
He told Reuters that he has begun to outline a strategy to guide the venture over the next two to three years that includes new products with intellectual property that VCE will develop on its own.
"We are a hyper growth company with tremendous opportunity requiring a lot more structure and focus," he said.
EMC and Cisco have invested about $870 million in VCE, and own 58 percent and 35 percent stakes, respectively. VMware and Intel Corp are also minor investors in VCE.
VMware and Intel did not return calls seeking comment.
Cisco and EMC have become less interested in VCE because they have come to believe that they need to develop their own products, rather than rely on the partnership, said Kaushik Roy, principal with Hercules Technology Growth Capital, a large venture capital firm.
Roy said that in the future customers will want to buy their technology from a single company rather than a joint venture that sells equipment from several manufacturers.
ON THE OFFENSIVE
EMC, whose market value of $55 billion is nearly half that of Cisco's $103 billion, has already started to strike out on its own. Earlier in August, EMC forged a partnership with hardware maker Lenovo Group Ltd, pushing it into the server market.
But it was VMware's Nicira deal that really hit home, according to sources. They said Cisco had initially offered about $600 million for the startup founded in 2007, and believed it had completed negotiations when the two parties signed a term sheet in July valuing Nicira at about $750 million.
On July 23, Nicira announced it was selling itself to VMware for double the price. It was not clear if VMWare knew it was bidding against Cisco.
Several technology bankers, executives and analysts said EMC separately could consider partnering with or acquiring networking technology from Cisco's competitors, including privately held Arista Networks, Brocade Communications Systems Inc and Juniper Networks Inc. All the companies have business ties with EMC.
A spokeswoman for Arista said it is building an independent company and does not comment on M&A speculation. Brocade and Juniper declined to comment. A source familiar with the matter said there are no active M&A discussions between Juniper and EMC.
For its part, Cisco is also reaching out to EMC rivals. The networking company recently signed a deal to bundle flash storage from Fusion-io Inc with Cisco servers. Fusion-io has a similar deal with storage firm NetApp Inc, a fierce rival of EMC.
"Why is Cisco using Fusion-io when it has this JV with EMC?" said Maynard Um, an analyst at Wells Fargo Securities. "Connect the dots -- you have Cisco servers, networking, with Fusion-io and they work with NetApp boxes."
Technology bankers and industry executives speculated that if Cisco wanted to make a big move into storage, NetApp would be a good fit. They said Cisco might also consider Citrix Systems Inc or Red Hat Inc, which compete with VMware in selling virtualization software that boosts the efficiency of servers. NetApp, Citrix and Red Hat declined to comment.
(Reporting By Nadia Damouni and Nicola Leske in New York and Jim Finkle in Boston. Editing by Paritosh Bansal)
Tech
Related Quotes and News
Company
Price
Related News
Tweet this
Link this
Share this
Digg this
Email
Reprints
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (0)
Be the first to comment on reuters.com.
Add yours using the box above.
Edition:
U.S.
Africa
Arabic
Argentina
Brazil
Canada
China
France
Germany
India
Italy
Japan
Latin America
Mexico
Russia
Spain
United Kingdom
Back to top
Reuters.com
Business
Markets
World
Politics
Technology
Opinion
Money
Pictures
Videos
Site Index
Legal
Bankruptcy Law
California Legal
New York Legal
Securities Law
Support & Contact
Support
Corrections
Connect with Reuters
Twitter
Facebook
LinkedIn
RSS
Podcast
Newsletters
Mobile
About
Privacy Policy
Terms of Use
AdChoices
Copyright
Our Flagship financial information platform incorporating Reuters Insider
An ultra-low latency infrastructure for electronic trading and data distribution
A connected approach to governance, risk and compliance
Our next generation legal research platform
Our global tax workstation
Thomsonreuters.com
About Thomson Reuters
Investor Relations
Careers
Contact Us
Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.
NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.