The long speculated tensions among Cisco (CSCO), EMC (EMC) and VMware (VMW) may finally becoming to a head. 

It's VMworld week, which means lots of fun in the world of virtualization -- where conflicted partnerships can turn into messy divorces. And the back channels are chattering about the buzz of VMware's new initiatives, notably the intro of EVO:RAIL and EVO:RACK, which pose new threats and questions about its relationship with both Cisco and VMware's majority owner, EMC. 

EVO:RAIL and EVO:RACK look a lot like a hardware platform, with VMware and partner software loaded on top of servers and network applicances to create a sort of virtualized and distributed "god box" that handles storage, computing, and networking. This is what they are calling in the biz a "converged infrastructure." The partners include Dell, EMC, Fujitsu, Inspur, NetONe, and SuperMicro. That's a big list of Cisco competitors -- remember that Cisco is in the server business. This has been VMware's most aggressive foray onto the hardware side, where it's starting to put together a broader story for disaggregation and Software Defined Networking (SDN) with the hardware manufacturers that can help make it happen. 

This entry was posted on Thursday, August 28, 2014 at 16:08 pm and is filed under .
Keywords: Cisco, VMware, EMC, EVO:RAIL, M&A, Nicira, SDN, Virtualization, VCE, Vblock

This week is the week of VMworld, VWware's conference baby, the show where the world gathers to see the future of data center and virtualization technologies. I wasn't able to make it to VMworld this year, but I can marvel from a distance at all the strategic prancing and positioning around the explosion of open virtualization technologies. 

Let's get one thing straight: Open, meaning both interoperability and open source, is the big trend in all software and IT. You've heard about Software Defined Networking (SDN) here, which hopes to translate the more open and virtualized technology of the modern data center into networking. And maybe you know about OpenStack, Linux and Docker, too: They are all open-source communities for building respective cloud-computing platforms, OSes, and distributed applicaitons.  The question is: If you are a proprietary software or hardware vendor, what do you do about it? You hedge your bets. 

This entry was posted on Tuesday, August 26, 2014 at 16:02 pm and is filed under Infrastructure & SDN, Investing.
Keywords: VMware, VMworld, SDN, Linux, Dell, Cumulus, Docker

Amazon (AMZN) has announced it is buying Twitch, a live video platform for gamers, for a mere $1B in cash, beating out Google (GOOG) in a bid for the company. 

Twitch is a fascinating story in itself. Originally known as justin.tv, which was founded in 2007, it was part of a crop of video-sharing platforms carving out a niche after YouTube achieved the leadership position.Twitch emerged as the more popular site focused on gaming content and the company rebranded itself as Twitch, as the Justin.tv population was migrated there. Justin.tv was actually shut down on August 4th of this year. 

This entry was posted on Tuesday, August 26, 2014 at 14:49 pm and is filed under .
Keywords: Amazon, Google, Video, User-generated Content, M&A

Hewlett-Packard's strong cash flow provides the ammunition for it to go out and make some high-profile tech acquisitions other than the much-speculated Rackspace, according to a new report from Raymond James. 

Who's on the list? In addition to Rackspace, which is apparently coveted by many companies, Raymond James sees a number of companies in the security, big data, and software defined networking (SDN) space that could be attractive to Hewlett-Packard (HPQ). These include Actifio, Adara Networks, Arista Networks, Cumulus Networks, Fireye, Fortinet, Palo Alto Networks, Hortonworks and Sumo Logic, among others, according to Raymond James. 

"Following several consecutive quarters of strong cash flow generation, HP’s balance sheet is in the best condition in years, and the company has a $5 billion net cash position (excluding financing debt and receivables)," writes the Raymond James technology team in a research note issued this morning. "As a result, HP management has indicated its readiness and willingness to make acquisitions following a three-year hiatus that can only be described as an Autonomy hangover."

This entry was posted on Monday, August 25, 2014 at 13:46 pm and is filed under Infrastructure & SDN, Investing.
Keywords: Hewlett-Packard, HP, M&A, Arista, Fortinet, Cumulus, SDN, Security

A merger of medium-sized data-center providers indicates that use of hybrid cloud services and Amazon Web Services (AWS) continues to fuel growth in the data-center market, as larger enterprises and government agencies increasingly adopt cloud services.

Datapipe, a Jersey City, N.J.-based provider of cloud and managed hosting services, announced this week that it was acquiring Layered Tech, based in Kansas City. The combined entity will have about 600 employees. Datapipe had about 400 employees prior to the deal. Financial terms were not disclosed. 

The deal will propel Datapipe into the government sector, where Layered Tech was a specialist in terms of FISMA and FedRAMP compliance. These compliance standards add layers of security to insure that public cloud solutions such as AWS can be offered to government agencies. 

This entry was posted on Friday, August 22, 2014 at 14:37 pm and is filed under Infrastructure & SDN, Applications.
Keywords: Datapipe, Layered Tech, M&A, Mergers, Cloud Services, Amazon Web Services

Cisco Systems Inc. reported strong earnings and profit for its fiscal Q4 and FY2014, beating Wall Street expectations by a few pennies for the quarter. But its shares and outlook continue to be weighed down by flat revenue growth, largely attributed to weakness in the emerging markets and service provider markets. 

As reported earlier in the Rayno Report, Cisco said it will undergo a major restructuring in 2015, which will affect as many as 6,000 employees. However, there was no mention of the timing of Chairman and CEO John Chambers' retirement, which has been the subject of much chatter in the Cisco hallways, according to our sources. 

Earnings came in slightly above expectations for the fourth quarter of its fiscal year, with the company reporting $.55 in non-GAAP earnings and $12.4 million in quarterly revenue. Consensus analyst estimates were $.53 in non-GAAP earnings and $12.1 million in revenue. Cisco's fiscal Q4 and fiscal year ended on July 26, 2014.  

On an annual basis, Cisco reported $2.06 in non-GAAP earnings (after special charges) for its fiscal year 2014 and revenue of $47.1 billion, which came in 3% lower than the prior fiscal year. That represents its largest non-GAAP annual earnings ever, which generated cash flow of $12.3 billion and a shareholder dividend of $3.8 billion for the fiscal year. 

Cisco projected revenue to be flat to up 1% on a year-to-year basis for the next quarter. 

This entry was posted on Wednesday, August 13, 2014 at 20:32 pm and is filed under .
Keywords: Cisco, SDN, IoT, earnings, John Chambers

A group of VMware alumni have launched Platform9, a cloud networking management platform designed to give private cloud networks the look, feel, and functionality of public cloud networks such as Amazon Web Services (AWS).

Platform9 launched today with 12 beta customers, including several that have been named: Marin Software, Moz, and Vendormate. It also announced that it has raised $4.5 million in Series A funding from Redpoint Ventures. The first product will ship by year-end. 

The idea is that some companies may want some of the characteristics of a having its computing infrastructure and applications of a "public" cloud network such as AWS but they want to manage it as a private cloud network that the IT department can more directly control. Many companies move IT initiatives into cloud platforms such as AWS because they are easy to set up: They can be instantly provisioned managed from a self-serve portal, giving the customer access to a powerful, global computing platform. But later, as the business grows, there may be more of a need to build a private cloud as the tradeoffs of public cloud -- such as cost, security, and control -- become more taxing.

This entry was posted on Tuesday, August 12, 2014 at 11:59 am and is filed under Infrastructure & SDN, Investing.
Keywords: Platform9, Private Cloud, Virtualization, VMware, VMworld

There's a little secret inside the networking technology markets: The battle between Cisco, VMware, and a gaggle of startups to take leadership in the Software Defined Networking (SDN) has had the effect of slowing networking technology decisions as engineers and technology architects consider how to proceed with the next generation of technology. 

In the old PC days, they called this Fear Uncertainty and Doubt (FUD), a reference to the marketing strategy used when big companies such as Microsoft announced a new product that stalled the market. It was effective, which may be why you keep hearing about it. 

Last year's big moves by Cisco were classic FUD moves. It acquired startup Insieme and announced its Application Centric Infrastructure (ACI), its own spin on Software Defined Networking (SDN). ACI is shipping behind schedule, of course, as Cisco said it would be delivered by June. It's now supposed to be released by the end of the month. Let's now call it a September release. This slow roll by Cisco, intentional or not, has resulted in the textook technology result: A classic "frozen" market as customers, analysts, and industry experts say that Cisco was largely successful in somewhat freezing the market.

"People are sitting on decisions," one networking executive recently told me. "SDN is slowing the market down."

This entry was posted on Friday, August 08, 2014 at 13:22 pm and is filed under Infrastructure & SDN, Investing.
Keywords: Cisco, ACI, SDN, VMware

A new flavor of Wide Area Network (WAN) optimization -- one that is delivered via the cloud -- is ready to shake up both the service provider and WAN equipment market. Startup VeloCloud is an early leader emerging in the field, having announced the general availability of its service, named VeloCloud, last month. 

VeloCloud is among several startups in this area, including Pertino, which are taking WAN services to the cloud to eliminate the complexity for the customer. WAN links purchased from service providers to connect corporate offices and often employ expensive equipment and leased lines that must be managed by an IT department. 

Some popular phrases used to describe this next phase of WAN development include "Cloud WAN" or "Hybrid WAN." 

"We call this the cloud-delivered WAN," says VeloCloud Co-founder and CEO Sanjay Uppal, in an interview at the VeloCloud offices this week. "What remains at the edge is a very simpler function, understanding the app and knowing which line to send it out on it," 

VeloCloud Founders (left to right) VP Products Steve Woo, CEO Sanjay Uppal, and VP of Engineering Ajit Mayya.
 

This entry was posted on Tuesday, August 05, 2014 at 02:54 am and is filed under Infrastructure & SDN, Applications.
Keywords: VeloCloud, WAN Optimization, VPN, Hybrid WAN

Is Calix Networks (CALX) back? Skeptics who have burned before might have reason for caution, but the company's earnings beat gives the optimists a reason to look forward to an expansion in 1 Gigabit broadband deployments.

New service provider investment in Calix's access equipment was evident in the company's earnings report. In reporting its second quarter 2014 results last night, Calix reported sales of $98.0 million, up 4% above the same period last year and above consensus analyst estimates of about $95 million. The reported earnings per share (EPS) of $0.10 was better than consensus estimates of $0.01. Shares popped about 11%, rising to nearly $10 in morning trading. 

As we've reported here, interest in deploying gigabit Ethernet as a premium service for high-tech business is growing among service providers, and there has been a noticeable uptick in deployments. The trend is also supported by government stimulus policies. 

"The sales upside came as a pleasant surprise and included improved spending from tier 2 & 3 operators, recognition of deferred revenue from stimulus projects, and perhaps increased share from top customer CenturyLink," wrote Raymond James Managing Director and analyst Simon Leopold in a research note this morning. "We envision Calix's business as stabilizing with the improved tier 2 & 3 spending, but visibility remains a challenge; at least y/y comparisons for 4Q and 1Q appear fairly easy."

This entry was posted on Wednesday, July 30, 2014 at 16:42 pm and is filed under Infrastructure & SDN, Investing.
Keywords: Calix, Gigabit Broadband, Gigabit Fiber, Carl Russo.
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