DellHPSunIBM unmoved by Cisco blades
California dreamin' meets reality
As most of the planet now knows, Monday is D-Day for the "California" blade server launch from networking juggernaut Cisco Systems.
This may not be the first time that Cisco has been involved in the server racket - it has dabbled a bit from the edges - but it is, if the rumors are right, the first time that the company will directly take on the server makers that have defined the foundation of IT infrastructure for decades.
Networks, after all, hang off servers - at least from the viewpoint of server makers and a lot of CIOs. But unless you're talking about standalone machines that pump out paper statements and bills from two, three, or four decades ago, no server is an island.
These days, a server is useful precisely because it is networked, and as Sun Microsystems correctly observed a long time ago, "The network is the computer."
Not that this realization will necessarily make you a lot of money. Cisco has done a hell of a lot better than Sun did during the dot-com boom and has managed to grow its sales and its influence over the data center since the dot-com bust while Sun's has been on the wane.
And if anyone can come in and shake up the server business, it's Cisco.
EMC was always a contender here, too, but it chickened out after buying Data General. It has, however, managed to take that company's Clariion disk-array business to a broader market - thanks to help from Dell - and has played its VMware virtual-server cards rather nicely thus far, as well.
The combination of the two - Cisco and VMware - could end up being a potent combination, even if EMC doesn't want to sell VMware to Cisco, which owns a 2 per cent stake in the server virtualization juggernaut. VMware will play a prominent role in the California server and surrounding infrastructure, as we have already explained here (Cisco rumor mill from late January) and here (VMware's talk this week about creating the "software mainframe of the 21st century").
The basic idea is to create a big virtual switch that sits between virtual machines on physical servers and the real switches that these VMs need to talk to virtualize the network, much as a hypervisor abstracts the underlying physical hardware.
And if Cisco gets a hankering to do this correctly - meaning adding storage as well as servers and virtualization - it might just have to go all the way and buy EMC to get its hands on the two assets it doesn't control. Toss in system management vendor BMC Software, rumored to be a big part of the Monday's upcoming Unified Computing announcement, and you have the whole stack except operating systems.
There have been dumber ideas.
No fear at Sun
As for Cisco entering the server racket, the big server players are shrugging off the California launch. At least publicly, anyway.
"We're anticipating that life as we know it will change here forever in the server business," says Sun's John Fowler wryly. Fowler is general manager of that company's Systems Group, which designs and sells its servers, storage, operating systems, and, yes, switches. Sun makes InfiniBand switches for supercomputing workloads and also embeds networking interfaces in some of its processor designs.
"The server and networking companies have been skirmishing with each other since the dawn of time," Fowler says more seriously. "The ARPAnet was built using DEC PDP-11s running Berkeley Unix and running router software, after all. And while I think Cisco is going to get a bit of traction in the press, and I do believe that competition is a good thing, obviously becoming a player in the system market requires it to be a long-term game. It is really going to require a significant amount of work and investment over a long period from Cisco."
With revenue declining and profits declining even faster in its second fiscal quarter of 2009 - sales were down 7.5 per cent to $9.1bn (£6.5bn) and profits were down 27 per cent to $1.5bn (£1.1bn) - Cisco would seem to be ill-suited to do anything but stick to its networking knitting and focus on fabrics.
But with $29.5bn (£21.1bn) in cash and equivalents in the bank (or hopefully under CEO John Chambers' mattress, banks being what they are today), server makers under margin pressure, and IT shops looking for any way they can to improve operations and lower costs, now is as good a time as any to try something new. And that's the Unified Computing strategy, of which the California blade server and the Nexus 1000V virtual switch are but a part.
Cisco, of course, is a brand name CIOs know, but translating that name into the server market could be tough. For example, Cisco already took an oblique stab at the server-virtualization market when it shelled out $250m (£179m) in cash to acquire the InfiniBand switch and out-of-band server-virtualization experts at TopSpin Communications in April 2005. The company dabbled a bit with the product (remember vFrame?), and when InfiniBand didn't take off in the data center and VMware took over server virtualization, TopSpin just kinda went away.
The contrary example is Cisco's entry into Fibre Channel (FC) switches for storage-area networks, a road it got on about seven years ago. There were a number of players when Cisco jumped in, but Cisco's aggressive entry in the FC switch market has forced industry consolidation to the point that today it has come down to just Brocade Communications and Cisco.
"It took them longer than they wanted, but Cisco has undoubtedly done well with Fibre Channel," explains Tim Stammers, senior infrastructure analyst at Ovum. "They are in Fibre Channel to stay, and their market share is growing."
Dell, IBM, HP relaxed, as well
Over at Dell, the name of the game has been to play Switzerland when it comes to server virtualization.
Rick Becker, vice president of software and solutions at Dell's Product Group, says that he has been hammered by questions from the press and analyst communities about Cisco's impending announcements. "Cisco hasn't even announced anything about being in the server space," Becker says with a laugh, and you get the sense he knows the details of the announcement. "But the server business is a tough business," he adds.
Becker explains that when rival Hewlett-Packard launched VirtualConnect for its blade servers, it competed with Cisco and not only introduced a proprietary switching infrastructure for network and storage I/O, but also took some money away that would have probably gone to Cisco. "As HP encroaches on Cisco's business, Cisco is trying to figure out what it can do. It is going to be interesting to see how this all turns out."
So maybe Cisco can buy Dell for the servers for its Unified Computing strategy and then sell off the PC business to Acer or Lenovo and the printer business to Lexmark. Pull an IBM, so to speak, and ditch the low-margin businesses.
Speaking of Big Blue, IBM already explained to El Reg that it isn't afraid of Cisco entering the server racket.
And Hewlett-Packard is similarly in good humor. Jim Ganthier, who wrote the business plan for Compaq's iPaq switching business back in 1999 (since merged into HP's ProCurve switch business) and who is now vice president of software and blades in HP's Enterprise Storage and Server division, is not impressed with what he has heard about the Unified Computing strategy.
"I am guessing," Ganthier opined, "but from what I have read, Cisco is going to tell people that they are going to create an end-to-end virtualization story. And sure, Cisco will have a couple of big customers sign up for the beta. But what they are presenting today as a vision, HP is already delivering today."
With the EDS business now part of HP, there's the services angle to consider as well, says Ganthier. "For HP, the bottom line is that people aren't talking about servers, or storage, or switches individually," he says. "People are looking at this as resource pools, and then they want help with managing the physical assets, other services, financing - help with the entire lifecycle of products in the data center, including recycling."
As you might expect, Blade Network Technologies, which has about half of the switch market share on blade servers, is defending IBM and HP as well as trumpeting the fact that it has twice the share of Cisco among blade buyers. (All the more reason for Cisco do something radical, then, isn't it?)
"It's no longer a secret that Cisco is preparing to announce a blade server," wrote Vikram Mehta, president and CEO at Blade in an email exchange. "What are perhaps not so well understood are the vast and arguably adverse implications for customers of Cisco’s attempt to lock customers into a proprietary and high-cost solution.
"Cisco may be on its way to discovering that it’s not only foolhardy to undermine the strengths of HP and IBM but very dangerous to take customers for granted and try and lock them into a high-cost, proprietary solution. IBM and HP have great relationships; offer open, low cost solutions; and have decades of experience delivering such solutions. It won't take customers very long to see through the 'Cisco's way or the highway' tactics."
For its part, networking and adapter supplier Brocade says that it is not going to comment on what Cisco is up to until after the March 16 Unified Computing launch. ®