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Cisco throws California virt-server gauntlet

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The gauntlet has been thrown. Cisco Systems launched its "California" Unified Computing System today in a 14-city IPTV extravaganza, with the key partners it has tapped to provide components to the system showing up to talk - and talk a lot - about what this all means. Pity that all this talk was a little light on the details about exactly what a California system is and what it will cost.

It is now pretty obvious why Cisco chose to do its announcement today, two weeks ahead of the expected launch of the quad-core "Nehalem EP" Xeon processors for two-socket servers. It wants CIOs to give pause before committing to buying new rack or blade servers from the usual suspects: Hewlett-Packard, Dell, IBM, Sun Microsystems, Fujitsu, and a handful of others who will be launching Nehalem boxes this spring.

It is not clear yet when the California system - and Cisco's top brass is emphatic that it is a system, not a point product like a blade server - will be available or what specific components it includes. At least not based on the launch today. Cisco is going to make us work a lot harder for the actual feeds and speeds.

First and foremost, and contrary to some rumors last week, the California system does indeed contain blade servers, and these are blade servers that have been designed by Cisco using Intel's forthcoming Nehalem Xeons. The blades may even be manufactured by Intel, for all we know right now. But John Chambers, Cisco's chief executive officer, was emphatic (well, in his calm way of being emphatic) that Cisco is not interested in being perceived as jumping into the blade server market and competing with the likes of HP, IBM, Dell, Sun, and Fujitsu.

"We focus not on competition, but on where the market is going," Chambers explained, saying that the "biggest market play" that Cisco could identify was to create a system that encapsulates compute, storage, and network infrastructure and the virtualized instances of that technology.

He said that what Cisco does is lead and that "leadership is about how you catch market transitions and inflection points." Chambers admitted that the best technologies do not always win in the marketplace but the best strategy nonetheless was to create technology and let "your customers help steer you through it."

If you wanted to translate that into plain American, what Chambers might have said is that this consolidation of networking, serving, and storing was inevitable, and Cisco really had no choice but to compete with any server market for the IT dollars. And the server makers will have no choice but to push back too. Regardless of the sweet talk coming out of Cisco.

I liked this one from Chambers during the California system launch: "We are not taking a dollar of revenue and splitting it up differently, but taking a dollar of revenue and making it into two or three." This is the Way of the Internet, apparently, where you make pies bigger and you don't have to compete. In 2009, this kind of talk is just silly. IT budget growth is stifled and will likely go negative, and IT departments are going to be told to do more with less. Again. And Cisco is absolutely going to try to compete for the high-end, virtualized projects that IBM and HP in particular were counting on to make their numbers.

In any event, three years ago, just before Cisco made an investment in Nuova Systems, which the company spun in nearly a year ago to deliver its Nexus 5000 Fibre Channel over Ethernet switches, the company knew it was going to have to bring computing into its Unified Fabric switching and routing technology for networks and storage, and it knew that virtualization was going to have to be a big part of it. Hence the two investments in server virtualization juggernaut VMware, which is itself owned by disk array maker EMC, also a key California system storage partner (along with NetApp).

Chambers knows that Wall Street has been wondering what Cisco is doing jumping into the cut-throat x64 server space, and he explained the situation piecemeal as he talked. "We don't enter markets where we can't sustain competitive advantage and margins in," he said. "We enter markets when we see inflection points."

The idea is that by combining servers, storage, networks, virtualization, and system management into a single, unified system, Cisco and its partners can chase some big deals where virtualization for Windows and Linux workloads on x64 iron is expensive to do even if the individual pieceparts are fairly inexpensive. The California system, according to Cisco, will support thousands of virtual machines and will require fewer servers, switches, adapters, and cables than current machines, and have more main memory and fewer I/O bottlenecks, thereby improving bang for the buck.

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