“We don’t move into a market unless we think we have a realistic chance of gaining 40% market share with sustainable differentiation,” Chambers said at the Cisco Live conference when asked if the company needs to acquire an established cloud provider like Rackspace to succeed in cloud services. “And we try not to move into markets that don’t have really good gross margins, unless they’re unusually strategic for us. That’s a market that is very, very price sensitive; that’s taking on the big giants in Google, Facebook, Amazon, Microsoft, etc. So those are the types of scenarios we look at as a partnership opportunity (rather) than we do acquisitions. I’m not going to comment on if we looked at them or not. It doesn’t fit into our normal sweet spot and core competency area.”
That’s a pretty clear criteria and close to what many large tech companies would want.