Cisco Invades Server Market

Cisco on Monday said it plans to integrate network devices, servers, and storage utilities into a unified, next-generation data center.
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The move creates a turf war within the data center and threatens to devalue established server brands from IBM, Hewlett-Packard, and Dell, according to analysts.

So far three sets of devices–servers, networks, and storage–have operated as separate but connected functions in the modern data center with Cisco the leader of the networking market. Data center behemoth IBM, not to mention HP and Dell, has long led the server market, while EMC and IBM have ruled the storage market.

Cisco, which in the past has worked closely with server makers such as HP, will now market its own servers and its own software to manage all three unified elements of the data center.

“This move by Cisco will give pause to the major server vendors that have been treating the data center as their private playground,” said Charles King, principal analyst with Pund-IT Research.

The emergence of cloud computing–corporate computing where the hardware and software does not reside at the user's premises–is changing the the data center arena.

The rise of social networks, virtualization, and VoIP have all played a role in taking some of the cachet away from server names from IBM and HP.

Cisco's move to integrate the network elements–the servers, and storage–into a unified whole managed from a single point is a logical next step, according to Mr. King.

“Over the long haul this could affect large enterprises seeking to deploy clouds on their own or other companies that deliver cloud-based services,” he said.

Cisco has been dropping hints in the past few months that it planned to enter the server market. (IBM Gears for War with Cisco and Cisco Aims at Microsoft, IBM Turf) The company acquired more than a dozen software application companies in the last couple of years–among them a couple of leading players in the cloud computing market. So its entry into the server market was not a complete shock. (Nortel Challenges Cisco on Network Changes)

“Cisco wants to be viewed as a software-based company and not just a box company, so this move deeper into the data center is not a surprise,” said Brownlee Thomas, an analyst with Forrester Research.

Cisco is likely to go after its best customers first, according to Ms. Thomas, because they know Cisco well and are more likely to trust their data centers to Cisco.

“IBM and HP may not have much to worry about initially because they are well established, but smaller server firms that position themselves as alternatives to HP and IBM should worry,” she said.

At its formal announcement of its server technology Cisco was joined by Accenture, BMC, EMC, Intel, Microsoft, and VMware.
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BY Cassimir Medford
Source：RED HERRING

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