The Six Five team discusses Cisco’s acquisition of Isovalent.
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Transcript:
Patrick Moorhead: Cisco acquires Isovalent. Dan, why is Cisco doing this? And who the heck is Isovalent?
Daniel Newman: Yeah, so this came at an interesting time of year, the week of Christmas, but you know what? Sometimes you make acquisitions right into the Christmas or into the holidays, right? The business goes all year long. I might make acquisitions heading right into the holidays too, I can’t promise. But look, there’s cloud security hybrid fabrics. Cisco is going to play in this space of bringing hybrid multi-cloud fabrics together. One of the things that you and I have talked a lot about, Pat is that every cloud that you play in requires sort of a different stack. And so while companies have moved to multi-cloud, the ability to do this seamlessly from compute, networking, security, Cisco has an opportunity to win in that area. And what do I mean by that is, look, this is where HPE is playing, this is where Dell is trying to play and Cisco’s trying to play here too is saying, “Let’s simplify the process. Companies are going to go multi-cloud. Let’s simplify the process of enabling them to go multi-cloud by creating a stack that allows you to do the multi-cloud thing with less friction, less complexity.”
I’ll be candid, Pat, don’t know a lot about this company, did not follow them, was not tracking them. It appears to be an undisclosed amount, which means it was probably a fairly small deal in size. But they hit some of the, what I would call the right words, open source, cloud native, and bringing together networking and security. Which by the way is something Cisco uniquely has done very, very well. And that’s addressing the fact that they are network and security together, which some of the other companies I mentioned have not been as focused on. Now some of the other words that they talked about beyond open source is Mesh, which is another thing. And then of course Kubernetes. So this company apparently simplifies the connection of Kubernetes clusters across different hybrid multi-cloud environments.
So I think in the end, this is bolt-on, this is what Cisco does very well is they buy smaller, lesser known but valuable assets that they can put into their overall ecosystem. And then they have a world-class sales force to sell them and add value to their current customer and client distribution. It also helps the company drive a stronger footprint in cloud and security, which are two areas that Cisco is very focused on. So again, need to pay more attention to how this plays out. It’s not probably going to be a big headline gainer because it’s not a company that’s well known, but Cisco’s pedigree is finding these gems, integrating them into the business and expanding their portfolio, which drives to revenue growth.
Patrick Moorhead: Yeah, I want to sum this up by saying you had me at hybrid multi-cloud fabric. Those are the Pat Moorhead words, but if you’ve listened to anything that I’ve pontificated about over the last decade it was that cloud was going to mature into a public model and a private model. And there will be services that go across whether it’s on-prem data center, on-prem edge, a sovereign cloud that’s on-prem, multiple IaaS and PaaS providers, that average Fortune 500 company has two and a half. And then every acquisition you might make, you’re probably going to end up having four or five in the end, because the expense to collapse those into two vendors just won’t make sense over time. And what enterprises have done is they’ve stood up separate teams across developer or DevOps, applications, networking, security, kind of like stove pipes, and that’s not very scalable.
So this advent of hybrid multi-cloud fabrics, which provide a service across all your clouds takes a lot of work. But we’ve seen companies like Cisco, like Cloudera, Red Hat is hybrid multi-cloud for an application transport. We’ve seen VMware do it as well across application transport, security, and even networking. So yeah, this is exactly what this is and it makes perfect sense to me. And I’m glad Cisco is doing it and the hard work now begins to integrate this into their security cloud. Which by the way, security cloud is actually a security and a networking cloud, which is a hybrid multi-cloud fabric. So good job Cisco, this makes a ton of sense. And it’s also very in alignment with Cisco’s innovation strategy, which goes all the way from seed round. They actually have a seed round funding mechanism, which most tech companies don’t have. They might start round A and round B all the way to organic innovation and creation.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
