Rumors

I do my best to keep my ear to the ground to learn what's happening in the market. I'm sure that position has lead to my need for chiropractic therapy from time to time.  Most of the time, I ignore the rumors if I can't find multiple sources to support it.  In this case, I couldn't find other sources, but the rumor was so much fun to play with, I thought I'd share it with you.

<repeat after me...this is only a rumor...this is only a rumor...this is only a rumor>

The rumor is that Cisco is going to create a joint venture with VMware and possibly EMC to spin off the unit that creates the UCS systems. Fun no?

Even though it is only an interesting rumor, it caused me to think about what would happen if this dream became reality. It would seem that a mythical joint venture, a venture that created a new independent systems company for virtualized workloads, would have the following market impacts.

• Cisco would hope that its relationships with its friends Dell, HP, IBM, etc. would improve and that they would no longer been seen as a competitor. This reminds me a bit of the comedian/ventriloquist Jeff Dunham.  He says some pretty outrageous things through his puppets Peanut, Walter and Sweet Daddy D. The audience responds as if the puppet was an independent entity and doesn't seem to hold Jeff responsible for what is said by any of the puppets. The truth of the matter, however is that there really is only one person speaking. Would Cisco be able to get away with a similar act? It might be very entertaining if it tried to implement this strategy.
• If Dell, HP, IBM and the like found themselves competing with a new systems supplier, they just might decide that it would be better to partner with a different supplier of communications equipment when and where possible, that is when customers haven't specified a communications equipment supplier.
• Dell, HP, IBM and the like just might decide that they should go into the business of making their own communications servers by working with a supplier of software, such as Vyatta, that can make their systems a replacement for those offered by Cisco.
• If VMware is seen as becoming a systems competitor via this hypothetical joint venture, Citrix or Microsoft could be the recipient of more referrals from Dell, HP, IBM and the like.

It's an interesting rumor and I'm sure that there really is no way to get to the bottom of it until something is announced. That being said, let's play a game here. What do you think would happen if such a joint venture appeared? What would happen if VMware took part in a systems hardware venture with EMC? Someone else?