In a note to clients today, analyst Thomas Curlin of RBC Capital Markets says the firm thinks Cisco plans to offer NAS next year in order to bolster storage numbers. Curlin says Cisco needs a partner to do this, and he believes that partner will be EMC Corp. (NYSE: EMC).
EMC tops the list of suppliers who resell the most Cisco SAN switches, thanks in part to EMC's SAN expertise. The other likely candidate, Network Appliance Inc. (Nasdaq: NTAP), hasn't shown up in the top handful of Cisco's switch resellers. By most accounts, NetApp also addresses a slightly smaller enterprise scenario.
Curlin is so convinced of an EMC/Cisco NAS partnership that he's downgraded NetApp, whose shares he thinks may be overvalued, since NetApp shareholders banked on a future that could be threatened by a Cisco/EMC duet.
"We continue to believe NTAP is well positioned for strong growth in the coming years as a pure play on modular storage and Information Lifecycle Management with an outstanding management team," Curlin writes. "Yet the prospect of a united EMC/Cisco attack calls into question the prudence of paying for 2009 revenue targets in 2005."