Cavium S1 — Round 3

I was hoping that someone would slam me and say, “There will be no IPO … Cisco’s gonna buy them … for the same reasons they bought Greenfield, StratumOne, and Skystone“.

cavium-f5-sonic-cisco.gif

The “rumoured” logic of those cases was:

  • The end markets are strategic for Cisco ( all of their 2007 acquisitions have been in 2 bands shown in my diagram )
  • Cisco will become a more significant customer which has the benefit of achieving “box” pricing ( ie 5-10x the silicon price )
  • Action will make life difficult for key competitors (in this case F5 and maybe SonicWall).

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