Cisco To Acquire newScale

March 29th, 2011 by · Leave a Comment

Fresh off the announcement of its first ever dividend, Cisco Systems (NASDAQ:CSCO, news, filings) is going on the M&A warpath again.  This time the target is privately held software provider newScale.  The California-based newScale's products deliver a service catalog and portal for IT organizations to deploy cloud services.  Cisco will use the technology to fill out its cloud portfolio, giving it more depth in what it can sell to enterprises.  Having a ready-made self service portal makes sense in that capacity, and buying an existing product line will accelerate their plans.

Financial terms weren't disclosed, but the deal is expected to close in the second half of Cisco's fiscal year 2011.  Cisco has had a series of rough quarters, missing projections and expectations.  They've also been buying all sorts of companies as well as buying back stock, looking to leverage all that cash on the balance sheet.  One wonders if their difficulty growing aggressively isn't just a result of having been so good at it for so long that they're bigger than the trends they're trying to ride to growth.

But I digress.  The cloud awaits!

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Categories: Cloud Computing · Mergers and Acquisitions · Telecom Equipment

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