'Intel made more virty cash than VMware'
And that's why Cisco won't fear Nicira, says VMware's top cloud man
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VMworld 2012 Cisco and other networking hardware vendors needn't fear VMware's acquisition of virtual networking company Nicira, because they'll end up selling mountains of virtualisation-friendly kit.
That's the opinion of Raghu Raghuram, VMware's Executive Vice President of Cloud Infrastructure and Management, who says that when server virtualisation started to take off hardware vendors feared the consequences.
“We said you could virtualise on a Pentium 5,” he reminisced, and hardware vendos wondered where their next sale would come from. “Then Intel added instructions for virtualisation.” That effort made it a fine idea to by Chipzilla's kit to make virtualsation hum, with the result that, Raghuram half-joked, “I think they made more money from virtualisation than we do.”
“The same thing will happen for networking,” he added. “There are lots of opportunities for network vendors.”
Raghuram's comments came after soon-to-be VMware CEO Pat Gelsinger pointedly said he expects the company's relationship with the networking colossus to continue on its current level of friendly co-operation despite the Nicira deal and the acquisition target's participation in OpenStack.
Raghuram also expanded on other contentious areas among VMware's recent announcements, such as the decision to remove a requirement for shared storage to back vSphere. That move, he said, is not aimed at cutting off small SAN vendors at the knees. Instead it's a chance for smaller firms to use vMotion, the company's workload teleportation tool, without the need for a SAN in two locations. He imagines smaller businesses targeting servers with spare capacity as vMotion destinations, for either disaster recovery purposes or to handle unusual workloads that need extra resources for a time. That may mean dark days for vendors of small Vmware-certified SANs, such as Netgear and Drobo, but Raghuram
Another topic Raghuram touched on during a chat with your correspondent was the Cloud Ops processes launched yesterday. Raghuram explained that the company's intention is not to provide an alternative to ITIL, but that as ITIL is predicated on stopping IT from breaking things it is not a useful set of processes and practices for an automated, highly-virtualised, data centre. VMware is not therefore “putting aside” ITIL, as incoming CEO Pat Gelsinger said yesterday, so much as it is starting from scratch on processes whose premise is that humans hardly ever get to besmirch IT operations that hum along following policy.
But there's also bad news on the Cloud Ops front, as despite VMware yesterday announcing the Cloud Ops forum and tasking it with coagulating field cloud-building experience and turning it into IP, no method for that information sharing, capture or production has been determined. Such structures are in the works, with no time frame set for delivery. ®
COMMENTS
Cisco is not Intel
Intel benefitted from VMware on x86 because it allowed them to go up market into the Unix space, Sun's space in particular. Yes, some of their sprawl was consolidated which resulted in fewer low value x86 servers, but they broke into the more lucrative top half of the server space. Cisco is not Intel, Cisco is Sun. They are selling expensive proprietary gear which will be commoditized by Nircira. Intel will start to partner with bottom barrel switch makers to produce white box switches, aka dumb bandwidth, and all of the high value management software will move to a vendor agnostic software layer.... There is no way Cisco is falling for this assurance from VMware. EMC/VMware is now Cisco's largest competitor. VMware knew they would be going to war with Cisco when they bought Nicira, but the upside is worth the downside of losing Cisco as a partner and they needed to counter Hyper V which was getting close to ESX at a lower cost.
VCE/VBlock is toast
Anyone who bought VBlock, or any VMware/EMC and Cisco combination, is going to be regretting that decision. That whole partnership is up in smoke. Anyone buying UCS at this point doesn't know what they are doing.
Intel had similar margins before and after VMware. Cisco is getting commoditized on switching and routing, value shifts out of their products. Big difference. To the previous post, Cisco is SGI, Cisco is Sun.
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