No. of Recommendations: 1
I would not be surprised if no one on this board owned Cisco presently. They are a real example of innovator's dilemma. Relying on the past, and on scale, so as not to lose what they have instead of risking it to gain what they might be able to gain.

It is not irrational. Corporate execs and sales exes and their sales people are not going to get bonuses and keep their jobs if they decrease sales and profits. That is just the nature of the game. And Cisco is an engineering and sales organization, who long ago decided that most of their innovation would come from acquisitions.

It sounds as if there is almost an industry of start ups, that start up, specifically to be an R&D arm of Cisco, and to be bought out by Cisco at some point.

Microsoft is an example of such a company that took the risk and did it right and is now growing again. Albeit, not even close to its once play thing Apple. Go to a mall with a Microsoft store and an Apple store, and Apple store is overflowing with a double sized store, whereas Microsoft has a few visitors at a regular sized store (at least at the mall near me).

Arista shows that there indeed was room for Cisco to grow, had it tried. Intel is certainly trying, but it is hard to do so when you already own 99% of the server market and 80%+ of the PC and laptop market. You needs $10s of billions to make any difference.

But this issue with Nutanix (one such issue) comes from a point raised in your post by the CEO, and that is the OS, and the same OS on both the public and private cloud. As that stands now Nutanix has a formal partnership with one cloud, Google. Google is #4 in size. It competes with the #2 cloud Microsoft (although it works with it as well, but not with a formal partnership), and its greatest nemesis VMWare has a formal partnership with the far and away #1 cloud, Amazon. You can probably deduce the point here.

I am making no comment on the long-term return or lack thereof of Nutanix. Just examining the company's fundamentals in the context of the sort of companies I want to invest in, and when I want to invest in them.

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