I’m headed out to Cisco Live Europe today, so I’m trying to get everything packed before I head to the airport. I also realize I need to go buy a few things for my suitcase. Which must be the same thing that a bunch of companies thought this week as they went on a buying spree! Seriously:

• VMware buys Nyansa for the VeloCloud unit
• Arista is going buy Big Switch Networks, as first reported by SDxCentral but pretty much what’s happening for sure.

I don’t think we’re quite done yet, either. An oblique tweet from a friend with some inside sources leads me to believe that the reason why this is happening right now is because some of the venture funds are getting antsy and are calling in their markers. Maybe they need the funds to cash out investors? Maybe they’re looking to reduce their exposure to other things? Maybe they’re ready to jump on a plane to an uncharted island somewhere?

This is one of the challenges when you’re beholden to investors. Sure, not all of us are independently wealthy and capable of bootstrapping our own startup. We need some kind of funding to make that happen. But as soon as we do we are going to find ourselves at the mercy of their decisions and be forced to play by their rules.

If it’s time for them to get out of the position they have in a company, you’d better have the money. And if you don’t, they’re going to get it. I don’t know for sure what the situation is in both of those cases, but no one had really been talking publicly about buying Nyansa or Big Switch in the last few months. I had always figured that Nyansa would go to a bigger company, much like Aruba buying Rasa Networks in 2016. VMware is an interesting fit for them and a much better enterprise use of the technology in the long term.

Big Switch is puzzling for sure. From what I’ve heard they were profitable last quarter and bullish on the entire outlook for 2020. Did something change? Did the investors decide they wanted out? Or did some other market force push Big Switch to find a new home? When you look at the list of companies that were interested in buying them it’s not surprising. Dell Technologies would have been my first guess given their close working relationship. VMware would have been the second. Juniper and Extreme were interesting options but I’m not quite sure where the fit would be with them. And Cisco would have purchased as a purely defensive measure. So Arista is an interesting fit. I’m still waiting to hear some more details given how fresh this story is.

We’re into Q1 for most companies now. Or at least the ones that don’t have an odd FY schedule. So they’re realizing they either need to catch up on some R&D or that they have enough cash or equity lying around to go shopping. And if some of the companies on the market are selling at lower prices, it only makes sense to snap them up. Even if the integration pieces are going to take a while. Nyansa has great analytics, but it’s focused on the endpoint side. It’s going to take some work to make it all play nice with the other analytics pieces of VMware. That’s not cheap, but if the price of doing it through acquisition is cheaper than doing it through in-house efforts then buying your way in looks better in the long run. And if some venture fund is looking for cash at the same time, it could be a match made in heaven.

Tom’s Take

I’m a tech person. Even through the stuff I’ve done with Tech Field Day where I’ve had to learn more about financing and such I still consider myself a tech grunt first and foremost. When the talk turns to preferred share options and funding rounds and other such stuff I tend to look back at technology and figure out where that stuff is going. People that work with money for a living have a much different opinion of technology than tech people do. If that weren’t the case, we’d be talking about Betamax and HD-DVD more than we do now. But, money is still the way that tech gets done. And sometimes you need to do a little shopping to get the tech you need to keep building.