Partners Pushing Cisco For More Software Acquisitions

Cisco has made a number of recent acquisitions to boost its software and virtualization portfolio, a trend partners say needs to continue in order for the networking giant to stay competitive.

On Tuesday, the San Jose, Calif.-based vendor unveiled plans to nab Embrane, based in Santa Clara, Calif., in a move to boost Cisco's networking virtualization business. In June, Cisco said it was buying Stockholm, Sweden-based Tail-f Systems, which makes software that helps carriers more quickly deploy and provision services and applications on networks.

"The more software [acquisitions], the better, as far as I'm concerned -- they need to keep pushing," said one Cisco partner who declined to be identified. "They're heading in the right direction, I think, with Embrane and some of the others, but they've really got to keep pushing if they really want to dominate … and push for more software sales through the channel."

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Last year, Cisco also scooped up Metacloud, a Pasadena, Calif.-based provider of OpenStack-based private Cloud-as-a-Service, as well as the cloud-based collaboration-app supplier Assemblage, based in Royal Oak, Mich.

"If Cisco's going to be competitive going forward, they're going to have to have a software piece to marry to the hardware piece, because I don't think you're going to be able to go at it alone just on the hardware side," said another top executive solution provider who asked to not be identified. "VMware is carrying the torch because they have the software piece, so EMC is certainly tilting their model towards VMware to take advantage of the software side of things. Now I think Cisco is doing a similar-type play."

Chris Bottger, senior vice president of collaboration services at IVCi, a Hauppauge, N.Y.-based solution provider and Cisco partner, said the recent acquisitions are a major play to strengthen Cisco's InterCloud strategy.

Cisco is also pushing the channel toward selling cloud-based solutions in order to capitalize on recurring revenue streams, a trend over the past few years, according to Bottger.

"Cisco is not only serious about cloud from a sales compensation [perspective] -- compensating their salespeople on selling our certified cloud offerings -- but also from an investment perspective," said Bottger. "A company like ours may not build every single cloud, but our value will be in the integration, both at the application level and at the cloud, and the services we deliver around that."

Partners said rumors of other possible Cisco acquisitions, such as the Herzliya, Israel-based software company Stratoscale as well as SolidFire, a Boulder, Colo.-based storage startup, would be a "huge" benefit for the channel.

"They've made actual purchases in the software space, and then there's plenty of rumors [about] who they're looking at next," said the executive. "That's a good thing."

PUBLISHED APRIL 3, 2015