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Who's Next on the Acquisition Block? Bloggers Chime in

Oracle buys Sun. HP buys 3Com. SAP buys Sybase. Just when it seemed like consolidation among the big data-center vendors had played itself out, we're off again at full tilt. Multiple trends are driving the latest acquisitions wave: The economy is recovering, customers are demanding systems that are easier to implement and vendors seem intent on collapsing the divide between servers, network and storage.

So who's next on the block? We asked some of IDG's expert bloggers to pull out their crystal balls and make some bold merger predictions for the near future. Some are obvious, some controversial, but any one of them would give corporate CIOs a lot to think about if they woke up tomorrow morning to find out it had happened.

IBM buys Amazon Web Services

By Alan Shimel, author of Network World's Open Source Fact and Fiction blog

The company that coined the phrase "on-demand computing" has been rather timid about the cloud. While Microsoft has Azure and Google its App Engine, IBM is not going to sit out the biggest computing migration in a generation. Jeff Bezos, on the other hand, is a Renaissance man. From his humble bookstore beginnings, he built Amazon.com into the biggest retailer on the Internet. He is bankrolling a project to put tourists in space. And unbeknown to many outside of the technology world, he has made AWS the dominant provider of public cloud services.

While cloud computing may turn out to be the biggest story in enterprise IT, Bezos' investors want Amazon to maximize their returns. The Amazon Empire is too far-flung. At the end of the day, space is far above the clouds and much sexier to Bezos. He will sell the cloud service to pursue the stars. The money AWS generates from a sale could fund a lot of rocket ships.

Who has the money, the desire and deserves to be hosting a good chunk of the public cloud? Big Blue, that's who. Who better to combine private and public clouds for true on-demand enterprise computing? IBM will make the hybrid cloud a reality. It has the software and services to offer both infrastructure as a service and platform as a service. IBM more than anyone has the resources, experience and business model to take AWS and fulfill the cloud destiny.

Who knows. When IBM reaches the cloud, it may find Jeff Bezos hovering above it in space.

(Shimel, CEO of The CISO Group, can be reached at alan@thecisogroup.com and on the Web at http://www.securityexe.com)

HP buys Teradata

By Robert Mullins, author of Network World's Microsoft Tech blog

When considering a tie-up between Teradata and HP, it's not just about strategy; it's also personal. Before being made HP's CEO in 2005, Mark Hurd spent 25 years at NCR, including a stint as president and chief operating officer of its Teradata division. Teradata was spun off from NCR in 2007, and Hurd later hired Ben Barnes, a former Teradata general manager, to run HP's Business Intelligence division.

Hurd's plan was to take on Teradata with HP's Neoview, based on the NonStop SQL database that HP acquired when it bought Compaq. But Neoview hasn't turned out so well. "HP Neoview is reeling," Monash Research said in a March report. "(Almost) nobody sees Neoview competitively."

Yet high-end data warehouses are a profitable and growing business, one that HP yearns to have a strong hand in. Two years ago it partnered with Oracle on its Exadata machine, a hardware-software combo that paired HP servers with Oracle's database. Fast-forward to today and Oracle has dropped HP for Sun Microsystems, its latest big acquisition. Buying Teradata would allow HP to jump back in the game with a high-speed data warehousing stack and potentially deal Oracle some vengeance.

HP has built its software business on acquisitions: Peregrine Systems for $425 million in 2005, Mercury Interactive for $4.5 billion in 2006, Opsware for $1.6 billion in 2007. With Teradata it would get some screamingly fast appliance hardware in the bargain.

It wouldn't be cheap: Teradata's market capitalization is more than $5 billion. But it would be a smart growth move for HP.

(Mullins, a freelance technology journalist in Silicon Valley, can be reached at mullico@gmail.com.)

Oracle buys EMC

By David Linthicum, author of InfoWorld's Cloud Computing blog

EMC is the top maker of systems for managing huge stores of enterprise and government data, and it holds a crucial 80 percent stake in VMware. While the path from infrastructure to cloud computing has been brisk, including the fact that many cloud computing providers are VMware shops, I'm not sure EMC is as tied into the cloud revolution as it thinks it is.

Enter Oracle, which is in pretty much the same spot. While Oracle provides some SaaS solutions, Larry Ellison's "Cloud computing, give me a break!" rant clearly showed Oracle's lack of uptake in the cloud. This has changed as Oracle starts to execute on a new cloud computing strategy, but with the NoSQL movement taking hold and database-as-a-service becoming more commonplace, Oracle could see its market quickly erode.

Thus it makes sense for Oracle to go after EMC to round out its enterprise offering. Ellison has the database, the apps, and now Sun's servers -- why stop short of the storage? Moreover, the real cherry in that enterprise cocktail would be VMware. The combined company could get to cloud domination status quickly if it played its cards right.

(Linthicum, CTO of Bick Group, can be reached at david@davidlinthicum.com.)

Cisco Systems buys McAfee

By Alan Shimel, author of Network World's Open Source Fact and Fiction blog

McAfee is just what Cisco needs to match up against some of its "newer" competitors. Rumors have circulated for years that HP lusts after McAfee. And why not? McAfee's network security portfolio would make a great combination with HP ProCurve (now HP Networking, including 3Com and TippingPoint). So what better reason for Cisco to take out what could make its new, biggest competitor even stronger? Actually there are several.

Cisco has been long on marketing but short on real products in security for some time. Its MARS security information management product seems to be going away. Its IPS products, host-based security and network access control, while still bringing in some dollars, are generally considered behind the curve. Adding McAfee gives Cisco a soup-to-nuts security portfolio that puts it on equal or superior footing to HP and IBM.

And Cisco has been trying to go after the small business and consumer markets for a long time. With Linksys routers, cabletop boxes and the Flip video camera, Cisco wants to be in the home. McAfee has a strong presence there with its AV product line. It would be a Trojan horse for Cisco to penetrate the consumer market.

Cisco has also coveted the end-point, and a McAfee play would give it a strong presence on the desktop -- bundled with WebEx perhaps. And McAfee has been moving into cloud-based, SaaS-type services recently that would play well with Cisco's cloud strategy.

It would be expensive for sure, but Cisco has deep pockets. And hey, it's not like McAfee is losing money. It would add dollars to the bottom line.

Microsoft buys Red Hat

By Kim Weins, author of Network World's Essential Open Source blog

Pundits have explored Microsoft buying Red Hat for years. Although the deal would be anathema to the entire world of open source and likely Red Hat as well, a few factors open the door to such a seemingly unlikely match.

In addition to IBM as a competitor, Microsoft is facing a greatly expanded Oracle, with a portfolio that includes an open-source database and operating system. Meanwhile, VMware looks to play the spoiler by skipping the OS layer entirely and centering its strategy on virtualization, an open-source application stack from SpringSource and a major play for the cloud.

Bottom line: The sands are shifting under Microsoft and a bold move is in order. Owning Red Hat would allow it to diversify its OS portfolio and deepen its software stack for competing against both Oracle and IBM. It would also gain valuable assets in virtualization.

Microsoft long had a controversial and antagonistic approach to open source, from Steve Ballmer's disparaging comments to its aggressive "Get the Facts" campaign about the TCO of Windows versus Linux. But it's changed its tone over the years. Microsoft now puts considerable effort into collaborating with the open-source community, realizing it must operate in a world where open source is increasingly important.

Buying Red Hat would shake up the existing order in software and move Microsoft into a more innovative and open direction for years to come.

(Weins, senior vice president of marketing and products at OpenLogic, can be reached at kim.weins@openlogic.com.)

IBM buys CA Technologies

By David Linthicum, author of InfoWorld's Cloud Computing blog

On the heels of its acquisition of cloud integration vendor Cast Iron Systems, a relatively small gulp for IBM, I have one question: Why? IBM could set its sights on much larger fish, and I think it could be CA. They seem to have the same business model, and don't share as many customers as you would think.

CA has two core assets that IBM needs. First, a portfolio of cash-cow technologies that could bring some additional revenue, but without the cost of R&D. Second is customers. IBM has been bumping its head on the ceiling of market saturation, and a few new accounts would go directly to the bottom line.

Both IBM and CA have the buy-and-grow model that has made them huge, unwieldy companies in enterprise computing. CA is famous for grabbing up large software companies and squeezing out every bit of cash while reducing expenses as much as possible. IBM, on the other hand, seems to purchase companies around some "strategic framework," much of which I could not figure out other than, for the most part, it seems to be working.

An IBM/CA deal would create a massive consolidator, and like a 40-ton Roomba could vacuum up large and small companies alike, all the time getting bigger and more powerful. The deal would create the largest technology company in the world. While it would be a huge pain to merge the two entities, I suspect that the resulting "NewCo" would have the muscle to do battle with Google. After all, they are all going to battle Google eventually.

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