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Cisco Has Joined the Acquisition Spree with Piston Cloud


Jun. 12 2015, Updated 8:06 a.m. ET

Cisco acquires Piston Cloud

On June 3, 2015, Cisco (CSCO) announced its plan to acquire Piston Cloud Computing. Piston Cloud provides OpenStack private cloud distribution that is designed for automated deployment, security, and interoperability within public clouds. In 2013, Cisco funded an $8 million Series B round for Piston Cloud. Financial details about the deal were not disclosed.

Cisco too, like IBM (IBM), as we have seen in the prior part of the series, has joined the acquisition spree of cloud companies.

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The above presentation shows Cisco’s Intercloud strategy. Through Intercloud, Cisco intends to connect disparate cloud platforms with secure private access to essentially provide a connection between cloud service providers. In late September 2014, Cisco announced its plans to expand the Intercloud ecosystem with the inclusion of 30 global partners. The company also announced $1 billion in investment from Cisco Capital to speed up the adoption of Cisco-powered clouds.

Piston Cloud is Cisco’s second strategic cloud acquisition in a year

Piston’s “CloudOS technology” enables it to be a platform for the deployment of several types of workloads and not just OpenStack. The Piston acquisition fits in, as it would provide Cisco with non-OpenStack-specific expertise.

In July 2014, Cisco acquired Metacloud. Metacloud is an OpenStack vendor that offers OpenStack-as-a-service, which operates remotely private clouds in a client’s data center. Cisco stated that the acquisition of Metacloud will enable it to create a globally distributed and secure cloud platform required for the “Internet of Everything.”

Cisco estimates the Internet of Everything market to be worth $19 trillion in the coming ten years, which explains the company’s focus on expanding its cloud offerings rapidly and providing scalable and secure offerings to cater to the growing world of connected devices.

Cisco launched an initiative named “Intercloud,” which is software designed to help businesses shift their IT workloads among other public cloud services or within their own private clouds as per their needs. These public clouds include popular cloud services such as Amazon (AMZN) Web Services, Google (GOOG), and Microsoft (MSFT) Azure. Cisco stated that the Piston Cloud acquisition will speed up the product, delivery, and operational capabilities of Cisco Intercloud Services.

If you’re bullish about Cisco’s prospects, you could invest in the PowerShares QQQ Trust, Series 1 (QQQ). QQQ invests about 3% of its holdings in Cisco.


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