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By | Chris Mellor 19th May 2015 16:27

Nutanix CEO nixes Cisco buy rumours, swears allegiance to Michael Dell

Pandey — IPO still on the cards

Nutanix CEO Dheeraj Pandey has nixed rumours of Cisco buying his co-founded hyper-converged server/storage/networking startup.

The rumours were started by senior research analyst Jared Rinderer of Equity Capital Research Group. Pandey says Rinderer's analysis is off the mark.

Pandey, who has consistently said he wants to take Nutanix public and is not looking to be acquired, told his own staff the Cisco acquisition rumour was crap (our word) and then issued a public message to staff at OEM partner Dell.

He confirmed an upcoming IPO, and said: "If we ever decide to be part of another company, Dell will have a front-row seat in the bidding for it. That is my word to Michael Dell and a part of our agreement."

Could his wishes be ignored? We suppose that if a majority of Nutanix shares were owned by VCs and Cisco made them an offer they couldn't refuse then Nutanix could be sold despite Pandey's opposition. Unlikely though, as part of a startup's value being its team and a buyer wouldn't normally want to piss them off.

Should Cisco buy into the hyper-converged system market?

You can see the logic; hyper-converged systems are a way of selling servers packed with added value. Cisco already does deals with hyper-converged systems vendors such SimpliVity, so servers are sold with hyper-converged system software running in them.

So it could buy one of them and stop sharing customers' cash on the table.

But Cisco is a lousy operator in the storage world. Fibre Channel over Ethernet (FCoE) has not destroyed the physical Fibre Channel market and its Whiptail (Invicta) all-flash array purchase has under-performed, to say the least.

To many, Cisco is still primarily an orchestrator of dumb network pipes with its UCS server play being a well-performing aberration on which it has been unable to capitalise with moves into adjacent markets, such as storage, the cloud, and software.

With long-term CEO John Chambers retiring to be exec chairman we can't really expect incoming CEO Chuck Robbins to do anything radical until JC departs the Cisco board, however much financial analysts indulge in investment opportunities lip-licking. ®

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