Has Cisco made a $415 MILLION mistake with the Whiptail buyout?

Is the $450m that Cisco paid for Whiptail too high, seeing as the possible costs of the deal could include losing the EMC/VCE and NetApp/FlexPod partnerships? Let's back up a moment. Once upon a time Cisco sold networking gear. Then it entered the server market with its UCS line. It then had two players in the 4-part data …

[Anonymous Coward]

looks like they have a month to decide what to say ..

"Join us for an exciting first look at the new Cisco UCS Invicta Series solid-state systems and learn more about how it can change your business"

http://tools.cisco.com/gems/cust/customerSite.do?METHOD=E&LANGUAGE_ID=E&SEMINAR_CODE=S19502&PRIORITY_CODE=000

[33rpm]

Over pay means over charge

Cisco has no problem passing along any cost to its customers.

[Captain Save-a-ho]

Re: Over pay means over charge

And customer feel free buying other vendor's kit. So what's your point?

[Anonymous Coward]

Re: Over pay means over charge

and customers have no problem paying for anything that says Cisco on the box, because it says Cisco on the box.

[Anonymous Coward]

They all get what they deserve

If the Whiptail buy hurts either NetApp or EMC, they get what they deserve. NetApp for resting on its laurels and generally naffing around for the best part of 10 years with Clustered ONTAP, while the world moved on. EMC for bringing out the bag of spanners that is XtremIO to make, when it is frankly, just not a good story; sadly though a story that many EMC customers will ultimately find out for themselves due to their Xtreme marketing.

One view, is that this would hurt the vBlock alliance more, as you actually can buy the vBlock as a complete bundle. For people looking to stick some basic VDI services together the Whiptail stuff will fill in the storage piece and mean they don't need to go to VCE. For NetApp, FlexPod is a channel-friendly blueprint that partners can do to market with around converged Infrastructure. You don't buy it as such from NetApp and partners often wrap for services etc. around it, which fits the NetApp unified and backup story better if you need a complete solution. It gives gaps for partners to add other services and value. Just one view though.

Anecdotally on Whiptail have not heard good things about it reliability or efficiency wise, but be interesting to see a real customers view on that. $450m is still small beer for Cisco, and every storage play in town wants to be cozy with them. There seems to be a bit of a Nimble bromance going on as well. Cisco can also afford to be Switzerland here as anyone with 10GbE or FC can play in the UCS stack and call it a Validated Architecture. It all drives UCS/Nexus sales - do they really have to care?

[M. B.]

I don't think...

...NetApp has a choice in this, the FlexPod solutions have been quite popular locally but NetApp sales on their own have sort of tanked, at least in this area. They won't abandon a strong option like FlexPod simply because Cisco is pushing their own flash agenda.

EMC could get a little pissy about it, but only as it relates to VSPEX - as far as the vBlocks go all the storage products are EMC and that appears to be set in stone.

I'm not seeing a really convincing case for Whiptail from my perspective, not yet anyways. Sharing the flash modules amongst many workloads and letting the storage array sort out placement over time is more appropriate and cost effective than dedicated flash for individual workloads, I suspect this would be the case for most medium businesses and small enterprises to whom flash is still fairly expensive.

It definitely feels like a niche product that most vendors won't be overly concerned about, it's not like a general purpose storage system so I can't see if making that big of a splash.

[Nate Amsden]

who else

is EMC and NetApp going to partner with for servers? To them I think Cisco is the least bad to deal with even though they have whiptail. I suppose Lenovo with IBM's X-series is a possibility but I really can't imagine that(Lenovo) having a whole lot of success at least locally in the U.S..

[Anonymous Coward]

Re: who else

EMC already has a financial stake in Lenovo's server business. NetApp...well...they really need to do something to differentiate their business. WAFL is old and not the future...they need to adapt (which doesn't mean just throwing SSD at an outdated architecture).

[dssf]

Chess, Stratego games here?

Maybe Cisco decided, or some entity decided for Cisco, that the buy would be made to preempt other parties from getting the tech. If for its own motives, Cisco could just write down the costs over time, somehow, including padding pricing of other products and services. It's what most businesses would do to bolster profits/revenues/income. If, say, an "interested government body", however, were involved, then this might be a strategit/tactical move to keep Lenovo or others outside of the USA (including the UK) from getting their hands on the tech. It's how governments work, using companies to be non-combatant players in the intel/tech sphere.

Might not even impinge on NatSec. So, I could be completely wrong on either count. Stress, or ChessStigo?

Just my $0.02...

[Pavlov's obedient mutt]

or..

they bought it to rip it apart and use various bits and bobs of the code line

there's certainly no magic to the hardware (supermicro branding everywhere, bog standard off the shelf components) and the OS is essentially Debian, so my guess is it's the overlay trickery that got someones attention. How to incorporate that tho...

[Anonymous Coward]

It was mentioned about Cisco never agreeing to an EMC only xtreme vblock.

Yet it already exists.

http://www.vce.com/products/specialized/extreme-apps

[Anonymous Coward]

but

Still has Cisco networks and UCS unless i'm missing something??

[Anonymous Coward]

So what if it's a $415mm blunder?

It would hardly be the first time Brand C spent first and asked questions later.

[Terafirma-NZ]

EMC announce 1000 jobs to be cut and projecting less revenue in the future........

Cisco I don't think care as the press said the same thing about UCS servers when they first shipped and now today they are a common item, what is to say the Whiptail is not on the same path with Cisco looking to take on full datacentre builds. If this is the plan I am sure they are taking their time to get the paper work right as any VCE customers will feel ripped if it comes apart.

I mean its not like no one knows the storage industry is going through a huge change its the last part of the mainframe error.