Merger and Acquisition Targets

Mergers and acquisitions are always fun to speculate on. In this industry it seems like a week doesn't go by where some M&A activity is happening. With the recent Equinix acquisition of Switch and Data I have to wonder if more data center industry acquisitions will happen before the end of the year. Both Google and Cisco have said that shopping sprees will continue to gain speed in 2010.

thedeal.com had a Barron's article summary that intrigued me today about M&A speculation. The article points to 10 technology companies that are potential takeover candidates, including several that I have thought of:

1. Riverbed (RVBD | $1.53B market cap): major competitor to Cisco's WAN Optimization and Application Acceleration products. I've always thought Cisco would buy them, but perhaps HP is better suited.
   
2. NetApp (NTAP | $9.63B market cap): another possible target for Cisco. Otherwise maybe HP or Dell?
   
3. F5 Networks (FFIV | $3.73B market cap): No idea; maybe HP or EMC
   
4. Brocade (BRCD | $3.69B market cap): seems like HP is the lead candidate... if not, maybe EMC or IBM
   

and others.... Check out the complete article and list here.

2008 Predictions

As promised, here are my 2008 Predictions. I don't think my predictions from last year (fiber to the home) came true at all -- as I visit my in-laws who can't even get a cable-modem or DSL in their new neighborhood (yet).

Ok...here goes:

1. As I have eluded to in the past, I am a big fan of utility computing. It does receive a fair amount of hype, but I can see the true potential in it and why people will start to see the light in coming years. Events that 365 Main and Rackspace encountered in 2007 helped paint the picture for web sites that only had a single hosting presence to wake up and take a more serious look at utility computing. Amazon EC2, S3, 3Tera and Joyent are pretty cool and worth a look for most anyone. I think the tools to measure, monitor and deploy utility computing will definitely grow in the enterprise realm, now that the internet sites/companies have pioneered so much. The growth of utility computing and enterprise interest should also help along the WAN accelerations and optimization industries as well. BTW--there was an interesting response to Intel's question about what emerging trends are in compute models - check it out here.

2. 2008 will see the hype phrase "Software as a Service" finally fizzle. There's no rocket science here people - get over the warm-fuzzy terminology.

3. Green/New Energy sources will continue to be big news in 2008 (big stretch here, huh?). Only two things I'll offer here.... the first, is to take a look at the Kleiner Perkins (Venture Capital firm) list of greentech companies they are funding --- here. I listend to Tom Perkins on the Venture Voice podcast recently -- what an interesting and amazing person! The second item is wind; Kansas took recent headlines , but it will continue to grow as a new energy source in 2008. There was an interesting story in Sunday's Des Moines Register about the wind industry in Iowa....some interesting stats and stories to see how the industry is growing here.

4. With the data center industry booming, I think 2008 will see more data center related services come out. I.E.- this article

5. Companies to watch / will be acquired? Akamai (an established company, but they will be doing exciting things), Riverbed , Savvis , Platespin , 3tera , and Joyent

6. Political ads will continue to be skipped on my Tivo . Living in Iowa means the privilege of having the first caucus, but the trade is enduring 24x7 ads on TV from the candidates. Maybe after the caucuses are over the ads will take a break until next fall.

7. Death to the RIAA in 2008 -- Alleluia!!

8. Here is my shot in the dark prediction -- at least 1 large acquisition will take place in 2008 in the Colocation or CDN industry. There has been a lot of activity here and some quality players; I think the market has hit a spot that something big will happen next year.

WAN Optimization

Something I have always been simultaneously very interested in and confused by is the wide area network. WAN technologies, optimization and accelerators are creeping up in headlines all over the place. With data centers growing in number and consolidation projects pushing data from geographically disperse locations, the WAN is becoming increasingly important to build and operate. This post is really just to aggregate the information I have run across, help myself understand it better, and with any luck, help someone else interested in the topic as well.

Hardware

• Matisse Networks has some pretty cool products for what they are calling the "first optical burst switch, purpose-built for scaling metro and campus networks from 10 to 640 Gbps." Their equipment and technology allows you to scale the metro area network beyond 10Gbps while reducing the capital expenditures needed to accomplish it. Optical burst switching combines Ethernet and the enormous bandwidth of DWDM . Matisse is touting it as the next step in the evolution of optical network products ( Fixed wavelength --> Reconfigurable DWDM --> Optical Burst). A whitepaper explaining the technology and products can be found here
  

• Nyquist Capital has a nice post on Ciena products, optical transport and the future of carrier ethernet. They give an interesting analysis into the market scenarios for Metro Ethernet:

"There are four Metro Ethernet scenarios that we see developing.

1. Simple L2 aggregation combined with transport. Limited support for legacy interfaces and no support for TDM. Limited traffic management and service awareness.
2. The God box. Support for TDM grooming, L2 switching and perhaps even MPLS routing.
3. Sophisticated L2 switching and L3 routing. Deep packet classification and traffic management. No support for TDM.
4. The stupid network. Buy dirt cheap commodity transport equipment and manage everything at the wavelength level. Backhaul everything to enormous Cisco and Juniper routers and sort it out there."

• Paketeer keeps coming up in the WAN market for a number of products, acquisitions and alliances. Check out their PacketShaper System Architecture here

• Click here to check out the Gartner 2006 WAN Optimization Controller Magic Quadrant report.

• Here are some Cisco implementation stories of their Wide Area Application Services solution

WAN Optimization/Acceleration

• Mark Weiner over at the Cisco Data Center Networks blog talks briefly about WAN optimization. He mentions a company that saved 3.2TB (Terabits) of WAN traffic and related expenses within a one month period!

• An interesting lessons learned story comes from Byte and Switch article about Kansas City based 360 Architecture. Theirs is a story of WAN optimizers and consolidation of SAN resources. The article explains their problem, vendor evaluation and eventual 4X improvement in WAN speeds.

• Processor has a market overview of the technologies and vendors in the optimization/acceleration space. A Forrester Research research report shows Riverbed and Juniper Networks leading the market.

Fiber

Finally - the fiber networks themselves are getting attention as well. The attraction of owning your own private fiber network was underscored by Paetec Holding acquiring Mcleod USA for $492 million in stock. Check out the details and article here