Feeds

Cisco switch price cuts a bad sign – Analyst

No love for MDS

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

A pair of recent price cuts for Cisco storage switches have one analyst questioning how successful the networking giant can be in the high-end storage market.

Merrill Lynch's John Roy has issued a series of notes over the last three weeks, suggesting that demand for Cisco's MDS switches is tepid at best. He cites Hewlett-Packard and IBM's recent price cuts on the Cisco gear by as much as 30 percent as one indication the kit is not selling particularly well. This could be a cause for concern in the short and long term.

"We believe the Cisco switches have yet to gain the trust of storage managers," Roy wrote in a recent note. "While price cuts could push some fence sitting prospects to Cisco, we believe Brocade's and McData's installed base will not mix vendors. The risk involved is too big and the total cost of operating a multi-vendor SAN is significantly higher."

This is what is known as a barrier to entry. The barrier is so high that Roy wonders why Cisco even wants a piece of the $1.2 billion SAN switch market - uh hem, 20 percent growth aside.

Cisco may well be interested in switches because it sees many server-type tasks moving onto networking gear down the line.

"Intelligent switches could be the next 'server,'" Roy writes. "The server being where applications run, storage applications (like EMC's AutoIS) in this case. In this way, Cisco would be stealing CPU cycles from Sun, IBM and HP."

We discussed this theory yesterday with Brocade officials, and, for obvious reasons, they claimed storage and server vendors will each have their place in the data center.

This claim could hold true, but Brocade's public posturing is directed more at keeping its OEMs such as IBM and HP sweet. The ever-increasing importance of storage systems does have server vendors a bit nervous.

It's unclear as to what type of hardware will handle functions such as provisioning, TCP/IP acceleration and encryption down the road. Sun has prepped ASICs for upcoming server processors to handle TCP/IP tasks, encryption and a slew of other functions. The storage equipment makers are dong the same thing but are putting the intelligence in their switches instead of servers.

It's likely that both storage and server vendors will be able to help users out, just in different parts of the data center. Still, the importance of this battle and potential ramifications should not be underestimated. There's a big fight on to own as much of a customer's data center as possible, and everyone wants to come out a winner.

If Cisco wants to be involved in the war, it will need to get its act together, according to Merrill.

"We believe Brocade's Rhapsody-based intelligent switches are ahead of Cisco's," Roy wrote. "Cisco needs to move slowly into the Fibre Channel switch market, lest it get a bad reputation in the storage community. A bad reputation in storage can difficult to repair, just ask Sun, which is now selling HDS boxes." ®

Beginner's guide to SSL certificates

More from The Register

next story
Just don't blame Bono! Apple iTunes music sales PLUMMET
Cupertino revenue hit by cheapo downloads, says report
The DRUGSTORES DON'T WORK, CVS makes IT WORSE ... for Apple Pay
Goog Wallet apparently also spurned in NFC lockdown
Cray-cray Met Office spaffs £97m on VERY AVERAGE HPC box
Only 250th most powerful in the world? Bring back Michael Fish
Microsoft brings the CLOUD that GOES ON FOREVER
Sky's the limit with unrestricted space in the cloud
'ANYTHING BUT STABLE' Netflix suffers BIG Europe-wide outage
Friday night LIVE? Nope. The only thing streaming are tears down my face
IBM, backing away from hardware? NEVER!
Don't be so sure, so-surers
Google roolz! Nest buys Revolv, KILLS new sales of home hub
Take my temperature, I'm feeling a little bit dizzy
prev story

Whitepapers

Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
New hybrid storage solutions
Tackling data challenges through emerging hybrid storage solutions that enable optimum database performance whilst managing costs and increasingly large data stores.
Getting ahead of the compliance curve
Learn about new services that make it easy to discover and manage certificates across the enterprise and how to get ahead of the compliance curve.