Storage giant EMC is not going to buy networking vendor Juniper Networks, and its relationship with Cisco Systems is still strong, according to CEO Joe Tucci.
During a conference call with analyst and journalists to discuss EMC’s third-quarter financial numbers, Tucci said that despite rumors that began in July when EMC-owned VMware bought Nicira—a player in the growing software-defined network (SDN) space—EMC’s relationship with partner Cisco is not in danger. He also said that EMC was not in the market to buy a network hardware maker, comments that came a week after reports of the company being interested in acquiring Juniper.
“For the record, EMC and Cisco have benefited from a decade-long partnership,” Tucci said. “My close personal relationship with John Chambers goes back over 20 years, and we enjoy our friendship of trust and confidence in each other that is reflected in the way our teams work together.”
In addition, VMware’s acquisition of Nicira should be viewed as a move that adds to the relationship, rather than endangers it.
The reality is that software-defined networking complements the network infrastructure, and EMC has no plans to drive deeper into networking by acquiring a network hardware company,” Tucci said. “We believe continued innovation and network infrastructure by the partner ecosystem will enable higher-performance transmission of data in next-generation data centers. In short, we are committed to work closely and cooperatively with Cisco, our premier partner.”
Cisco and EMC have partnered on a number of ventures, including in Cisco’s Unified Computing System, a converged data center solution that includes not only networking and server technology from Cisco, but also storage products from EMC and virtualization solutions from VMware. In addition, the three companies founded a joint venture called VCE, which builds integrated, converged infrastructure solutions that include server, storage and networking into a single solution.
Speculation about the health of the relationship between EMC and Cisco started surfacing after VMware’s $1.26 billion acquisition of Nicira, a move that made VMware and EMC a player in the burgeoning SDN space. Software-defined networks essentially move much of the network intelligence from expensive switches and routers to a software-based controller, making the network easier to deploy and manage, and more flexible and scalable.
Executives with EMC and other tech vendors, with the rise of SDNs coupled with the virtualization of servers and storage, now talk about a software-defined data center that can address the demands the needs of such trends as cloud and mobile computing.
“We have a software-defined data center strategy that dramatically extends the benefits of virtualization,” Tucci said during the EMC call. “I truly believe this software technology will spark a revolution in the data center market through the tight integration and automation of compute, storage, network and security infrastructure assets. This will help customers receive unmatched efficiency, control, choice and agility.”
He said VCE continues to be a top priority for EMC, and that the storage company plans to grow its investment in VCE, which is nearing a run rate of $1 billion and has more than 500 customer deployments. “In short, we believe VCE represents the fastest and most cost-effective way for organizations to build out their cloud infrastructures, and we are committed to VCE’s success,” he said.
The SDN trend has given rise to a host of smaller vendors aimed at the market, while established players like Cisco, Juniper and Hewlett-Packard also have unveiled SDN strategies and solutions.
Rumors about a strained relationship between EMC and Cisco were further fueled by a brief report on financial news site Benzinga, stating that Juniper had hired JP Morgan to deal with possible bids from an interested buyer, and that EMC had been mentioned as a potential buyer. That rumor surfaced two weeks after Juniper executives announced the company was cutting about 500 jobs.
Other news sites picked up on the Benzinga report, though a number of analysts urged caution on the idea of EMC buying Juniper. In a report on the Barron’s news site, some analysts said such a deal wouldn’t make sense. Citi analyst Kevin Deannean said Juniper wasn’t a troubled company that needed to be bought, while Maynard Um, of Wells Fargo, said that Juniper would not be an “attractive target because (1) the majority of Juniper’s business is from the service provider segment, (2) Juniper has limited data center presence and its key data center platform (Qfabric) has garnered little traction, (3) the EMC, Cisco, [VMware joint venture, VCE] is, in our opinion, unlikely to unwind at this point in time, and (4) EMC recently hired a new CTO with networking background, which we think suggests EMC is unlikely to make a large acquisition.”