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Cisco to buy EMC?

Rumours are circulating that networking giant Cisco will top Sun’s acquisition of StorageTek and Symantec’s merger with Veritas by buying storage leader EMC for a whopping US$43 billion.

Rumours are circulating that networking giant Cisco will top Sun’s acquisition of StorageTek and Symantec’s merger with Veritas by buying storage leader EMC for a whopping US$43 billion.

Although EMC is a giant in its own right, it is reckoned that Cisco could easily afford to snap up the vendor. Cisco has a market capitalisation of just over US$121 billion and US$24 billion in sales while EMC has a market capitalisation of US$32 billion. Buying EMC for US$43 billion is therefore not out of the question.

From Cisco's perspective, the deal would make sense as it is looking for growth markets, with networking more or less sewn up. One of the few large growth areas left is storage and buying EMC would give Cisco a huge chunk of existing business and the technology and momentum to grab a lot more.

The speculation appeared on online newsletter SearchStorage, in an article by news director Jo Maitland.

“Buying EMC would give Cisco another chunk of the enterprise and tremendous sway with customers. Its mantra for some time has been that users want fewer suppliers to deal with and products from companies that they can be sure will be around a year from now,” says Maitland.

“Cisco would also like to see as much functionality as possible moved into the network, including storage applications, which it has slowly been tapping away at for a while. With 10 Gigabit Ethernet on the horizon, Cisco might also have its sights set on finally nailing the coffin on Fibre Channel, to bring storage networking and data networking together over the same pipe,” she adds.

Regional EMC representatives declined to comment on the speculation.

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