EMC's Cash Is King
NEW YORK ( TheStreet) -- Cisco's ( CSCO) big data center partnership plan, known simply as its verbal invasion of the server market, hasn't quite toppled the industry yet, but it continues to kick up a dust storm of speculation. For months, it was suspected that Hewlett-Packard ( HPQ) would counter the assault by acquiring Juniper ( JNPR), Cisco's direct rival in core Internet routing. Meanwhile, Dell's ( DELL) threats about hitting the deal trail had industry watchers guessing that storage networking shop Brocade ( BRCD) might in the Dell expansion plan. And F5 ( FFIV) has spent a fair amount of time in the deal buzz machine. The Web switch maker, which commands eye-popping 78% gross margins, has been seen as an accretive pickup option for giants like Cisco and H-P.
But those rumors have grown a bit stale. Some of these prospective deal stories have aged beyond ripeness. And newer items of speculation are smaller in comparison. Riverbed ( RVBD), for example, an outfit that helps network operators speed up traffic by reducing the amount of repeat information that travels back and forth, has been considered an appealing takeover target for years. But Riverbed's so-called Web-optimizing technology has been imitated and developed enough by others like Cisco, to have dulled its appeal a bit. The upshot of all this: Riverbed is apparently in acquisition mode. The tech shop is rumored to have an interest in Juniper's network optimization business, a unit formed when Juniper bought Peribit in 2005 for $337 million in cash. Today, analysts estimate the Peribit business is worth about a tenth of that.
Obviously Riverbed would be interested in the customers Juniper's Peribit effort has won much as the technology. And buying customers can often help buff up the acquirer for a sale. But the point here is that aside from Oracle's ( ORCL) deal for a sinking Sun ( JAVA) and EMC's ( EMC) hostile victory over NetApp ( NTAP) for Data Domain ( DDUP), data center M&A been more conjecture than consummation. -- Reported by Scott Moritz in New York