Ciscoannounced today its intent to acquire NewScale, a small, but well-respected automation software vendor. The financial terms were not disclosed, but it is a small deal in terms of money spent. It is big in the sense that Cisco needed the kind of capabilities offered by NewScale, and NewScale has proven to be one of the most innovative and visible players in that market segment.
The market segment in question is what has been described as “the tip of the iceberg” for the advanced automation suites needed to create and operate cloud computing services. The “tip” refers to the part of the overall suite that is exposed to customers, while the majority of the “magic” of cloud automation is hidden from view – as it should be. The main capabilities offered by NewScale deal with building and managing the service catalog and providing a self-service front end that allows cloud consumers to request their own services based on this catalog of available services. Forrester has been bullish on these capabilities because they are the customer-facing side of cloud – the most important aspect – whereas most of the cloud focus has been directed at the “back end” technologies such as virtual server deployment and workload migration. These are certainly important, but a cloud is not a cloud unless the consumers of those services can trigger their deployment on their own. This is the true power of NewScale, one of the best in this sub-segment.
Every day we read about technology vendors making acquisitions and merging with their competitors. Some recent examples: Verizon acquired Terremark for $1.4B to take a leadership role in IaaS, NetApp acquired Akorri to move up the virtualization stack, and the highly popularized "storage shoot out" in late 2010 between Dell and HP for 3PAR (ending with HP’s winning bid of $2.4B). Since there is no evidence to suggest a decrease in the pace of these acquisitions, it’s important for infrastructure and operations (I&O) professionals to keep a keen eye on these proceedings.