Cisco Preps Server-Switch As HP Prepares Flank AttackCisco Preps Server-Switch As HP Prepares Flank Attack

Code-named California, Cisco's server is expected to meld Cisco's Nexus 5000 switch, Intel's Nehalem processors, and virtualization management with help from VMware.

J. Nicholas Hoover, Senior Editor, information Government

December 18, 2008

4 Min Read
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Cisco seems poised to enter the data center server market.

The networking leader has developed a blade server chassis that combines an Intel-based server, a top-of-rack switch, and virtualization management capabilities in an integrated system, according to sources confirming reports elsewhere last week.

At the same time, Hewlett-Packard is considering its own new avenue of assault against Cisco, as it prepares to announce a combined server-switch of its own.

Cisco isn't commenting specifically, but the concept of an integrated server-switch is consistent with its recently announced "unified computing" strategy, which sees a coming together of network, computing, and virtualization platforms. "What you get with that is simplification through a pre-designed virtualization architecture, not buying discrete components and having to weld them together in your shop, but an architecture that's designed around the concept of the virtual machine," Doug Gourlay, Cisco's senior director of data center marketing and product management, said in a video he posted online earlier this month.

Cisco's system, code-named California, likely will be introduced in the spring, according to the sources. It will meld Cisco's Nexus 5000 switch that converges storage and data network traffic, blade servers that employ Intel Nehalem processors, and virtualization management with help from VMware. Cisco invested $150 million in VMware last year, and the companies tout a common vision for virtualization. Red Hat's Linux operating system will also be part of the system, according to a report from one financial analyst, though another source said California could be OS-agnostic.

Whatever the case, it's clear Cisco is trying to make the network more virtualization aware, and vice versa with technologies like its Nexus 1000V, which integrates with VMware's hypervisor to set and maintain network policy for virtual machines, and California is said to be purpose-built for data centers with virtualization in mind. "You definitely see Cisco moving up the stack," Cisco server access and virtualization marketing VP Jackie Ross said in an interview. "The network and the application are increasingly tied closely together." For example, unless virtualization management is stressed from the start, policies like quality of service and data protection can get lost in the virtual machine shuffle.

Hewlett-Packard, meanwhile, is preparing its own two-in-one system, one that combines a ProLiant server and ProCurve switch, sources say. It's expected to appear early in 2009. HP recently moved its ProCurve networking arm into its Technology Solutions Group to more closely align those businesses.

IT departments often buy servers, switches, and virtualization tools separately, and configuring them to work together is a nontrivial task. The forthcoming products from Cisco and HP would aim to simplify that work. Blade platforms aren't new, but most have multivendor hardware, few have the laser focus on virtualization like Cisco's California should, and even fewer are as comprehensive as what it seems Cisco will offer.

Goldman Sachs and Credit Suisse are believed to be testing Cisco's system; they declined comment. California interests Hilton CIO Tim Harvey, whose company has a strategic relationship with Cisco but who hadn't heard of the technology until being told in an interview.

"I love to see people expanding capabilities that were on several boxes into a single platform. It just means a simpler environment for us," he said in an interview. "The management side and reliability side of computing has become harder as things have gotten more complex."

It's likely not only technology that's pushing Cisco in this direction, but Wall Street as well. The company consistently aims for more than 10% growth year over year, and it's running out of big growth opportunities. The server market is worth tens of billions of dollars, and that may be too lucrative to ignore, said Vikram Mehta, CEO of Cisco competitor Blade Network Technologies, who has seen California being tested by several organizations. He calls this Cisco's "world domination strategy." However, he added, it may even alienate relationships Cisco has had with HP and IBM.

Facing HP, IBM, and Dell, none of which would comment for this article, will certainly be a challenge.

"Servers have higher mind space with CIOs," said Yankee Group senior VP Zeus Kerravala. "You can make the same argument that why would somebody buy VoIP from Cisco, so they've done it before. The difference is a larger class competitor here. I wouldn't bet against them, but if they get into the server space, it would be the riskiest move the company has ever made."

Price could be one of Cisco's advantages, but it doesn't look like Cisco wants to play that game. According to a source, Cisco believes it will make roughly the same margins from California as typical Cisco products, which carry much higher margins than servers. It's difficult to count Cisco out, but unless it can make a compelling argument that California can compete on features, Cisco faces an uphill battle in the server market. Cisco's strength in networking, combined with technologies from VMware and Red Hat, would make this much more than a me-too product launch.

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About the Author

J. Nicholas Hoover

Senior Editor, information Government

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