Cisco’s Data Center Moves: Who Wins, Who Loses?

19 thoughts on “Cisco’s Data Center Moves: Who Wins, Who Loses?”

  1. Quote of the year:)

    …Saavis CTO Bryan Doerr, he reiterated that point and said that one of the reasons he was excited about Cisco’s data center moves was because they were finally making service provider class equipment….

    Correct me if I’m wrong. But, Cisco is generating $40 BILLION in revenues. Selling to xSP is nothing new to Cisco.

    1. @ALex

      if you think about their sales – very few products are being sold to true service providers. routers – yes, some switch products yes. optical stuff – maybe. otherwise it is still an enterprise heavy company.

  2. I sincerely doubt Cisco’s ability to penetrate the server market in any significant way. A company that aloof and disconnected from user’s needs cannot possibly compete with the modern server powerhouses. Their website is a shambles from an organizational and technical support point of view. They charge you a service contract to download a patch to their own firmware for security issues. When was the last time anyone paid for patches to HP, Dell, other hardware? These aren’t matters of procedure that can just be changed. It’s a company culture and attitude and I doubt that Cisco has the ability to “grow” out of their aloof attitude towards users.

    Besides we won’t have to worry about Cisco selling any server products for at least 2 years. It will take that long for them to roll out an extremely expensive certification requirement that will take another year to study and pass, and then you will need to hire at least 3-4 $150K/year certifiedd server engineers so that you can qualify to resell something that can only be programmed using a command line interface from the 1980’s and costs 3x what the rest of the industry gets for the same product. By that time HP and everyone else will have moved on to something better.

  3. As I see it there are two options:

    1> The servers take over the networking, replacing it with performant, malleable (and often open) software.
    2> The networking takes over the servers, pulling them down into expensive, proprietary hardware.

    I know which of these two options makes more sense on first inspection (hint: a server can easily be a router but a router can never be a server).

    I expect there will be announcements from competitors during this critical window between initial announcement and production launch and I imagine it will be hard to say for sure how this will pan out until then – pricing would certainly help though. The main risks I see is from virtual networking built into virtualisation platforms and operating systems (as well as “cloud networking” providers like Avastu, and also from alienating existing resellers like IBM and HP who now have significant incentive to deliver more open, modular but still “unified” hardware stacks.

    Sam

  4. whether cisco takes the so called ‘server’ markets is not the right question to ask. imho, the right question is who will drive market *transformation* for the new private, public, enterprise data center systems. virtualization across Compute, Store, Network creates a new market space. it is this new space that cisco will (hopefully) dominate and is betting it grows in to a big market.

  5. To date we have had technology silos: connectivity (networking), compute and storage. Clearly, with this announcement, Cisco is blurring the lines between connectivity and computing. This is no different than collapsing the silos of parallel networks, whether it is data/voice/video (via unified services network) or ethernet/fibrechannel/infiniband (via unified I/O). Unified computing (or connected computing) is the next logical step in this technology evolution.

    More details on connectivity versus computing at http://yescloud.wordpress.com.

    PG

  6. This is clearly a game changing move. The key question is how will Cisco transform this low margin business (gross margins in server business is in mid twenties) into something respectable? Cisco would also have to bolster its partner network and given that many of their current partners also work with IBM and HP, this may become interesting. I have blogged about the implications here at: http://subbaiyer.wordpress.com/2009/03/18/cisco-declares-war-on-ibm-and-hp/

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