Will Cisco Make a Bid for VMware?

By Amy Newman (Send Email)
Posted Apr 15, 2009

Remember back in February, when rumors circulated that Cisco might be looking to purchase VMware? Don't be surprised if they surface again soon, and perhaps turn into something more. On Tuesday, an intriguing story from Reuters hinted at some big news in the pipeline: Virtually Speaking: As VMware gets ready to unveil the next version of its hypervisor, is a potential acquirer lurking in the shadows?

"* VMware to unveil next-generation software April 21
"* Key partners include Intel, Cisco Systems"

We suspected the former, and even have a briefing scheduled for later today where presumably we'll learn more about what's coming down the pipeline next week. The latter, however, is interesting, primarily because while the hypervisor has become a commodity, how the software integrates with the hardware is anything but.

This particularly interesting given that, as one article indicates, next Tuesday, "analysts expect the company will launch the next generation of its hypervisor tool, designed to work in a 'cloud computing' environment, where users connect to computing power through the Internet."

More news about the new software (which goes by the name VSphere) can be found here.

Meanwhile, expect more complete coverage next week on ServerWatch when embargoes lift and all the details are known.

Meanwhile, with everyone either on Spring Break or lazing about in the aftermath of Easter, speculation seems to be the big story, and thoughts return to Cisco.

Cisco, as we noted two months ago, "has long been rumored to be interested in acquiring EMC. Now the networking giant may have narrowed its interest." At the time we deemed it unlikely because:

VMware is described as being EMC's best asset. One analyst said he believes for this to occur, Cisco would need to pay a significant premium for VMware or buy EMC along with it, which seems equally unlikely.

Since then the company has made its own play for the virtualization, and it has partnered with VMware. Still, the deep coupling on both sides, as well as Cisco's deep pockets and commitment to virtualization means it would probably be premature to write this acquisition off just yet.

And we're not the only ones thinking this way. Several blogs have touched on the likelihood in recent days.

Amy Newman is the managing editor of ServerWatch. She has been covering virtualization since 2001, and is coauthoring a book about virtualization that is scheduled for publication in October 2009.

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