Cisco's data-center push holds promise, perils

Cisco Systems' move into the heart of data centers, expected to be laid out at an event next Monday, holds the promise of easing a big IT headache but may also escalate competition between the company and its partners.

The networking giant is widely expected to announce an entry into the blade server market, code-named "California," at the Monday event, though the company's brief press invitation referred only to a concept Cisco calls "Unified Computing." In a recent blog posting, Cisco CTO Padmasree Warrior described Unified Computing as a move toward unifying computing and storage platforms with networks and virtualization platforms. She also acknowledged Cisco will compete with some of its partners.

What Cisco wants to do, according to industry analysts, is to make virtualization easier -- and gain a lot more control over virtualization itself. That goal doesn't necessarily require the company to make its own servers, but some signals point in that direction.

Unified Computing is intended to give IT administrators a way to manage all the components of a virtualized data center from one place, according to Yankee Group analyst Zeus Kerravala. Virtualization lets enterprises run applications in virtual machines that can be moved from one physical server to another. But when those changes are made, the network topology of the data center can be disrupted. When a virtual machine moves to a server with a different IP (Internet Protocol) address, on a different virtual LAN, it may not perform as well or may even become unavailable, Kerravala said.

So today, network engineers have to go in after each change and make adjustments, such as changing access control lists and reconfiguring the network.

"For the first time in history, network managers have had to become slaves to the computing guys," Kerravala said.

Most enterprises have been able to realize the benefits of the first phase of virtualization, consolidating their data centers for economies of scale and simpler management. But it's been hard to achieve full virtualization, in which virtual machines can continuously move among servers, Kerravala said. This would allow for adding processing power as demand for an application grows, or for moving tasks off a physical server at night for hardware maintenance.

"True virtualization isn't here, because we don't have tools to manage the computing and the network infrastructure together," he said.

Full virtualization essentially requires automation. With its Unified Computing initiative, Cisco wants to supply that automation under its own management system, and in the process put the network at the center of the virtual world, Kerravala said. When IT administrators want to move a virtual machine, they'll move it in Cisco's management console and everything else will adjust automatically.

This isn't a new idea. Others, including HP and VMware, are pursuing roughly the same aim. But tools that do this are so new that they aren't really ready for mass deployment in enterprises, said Dave Passmore, an analyst at Burton Group. He believes it will be two years before most companies can advance from static to dynamic virtualization. So there is still time for Cisco to enter the fray.

Cisco won't try to carry out this plan at the expense of VMware, the dominant supplier of virtualization software, analysts said. The two companies already have a close partnership, to the point that Cisco offers one data-center switch, the Nexus 1000V, that can run as software in a VMware virtual machine. In fact, VMware stands to benefit from Cisco's virtualization drive because it can sell more of its own software, Kerravala said.

But it may not be possible for Cisco to automate virtualized data centers from the network without having a hand in the servers that will have to carry out commands from its management system, Kerravala said. That could come about through either building servers itself or partnering with server vendors to build in the needed features, he said.

Cisco's track record shows the company often leans toward developing its own technology or buying it in the form of promising startups. Cisco has acquired 17 companies since the beginning of 2007. And building its own servers probably would give it more control over the complete system, Kerravala said.

But the move would have some costs for a company that has had to work side by side with computing vendors such as HP, IBM and Dell for as long as it's been supplying enterprise LAN gear.

"If Cisco builds their own server, it will forever change the relationship they have with server manufacturers, for the negative," Kerravala said.

A top executive at Dell struck a tone of both competition and conciliation on a conference call on Monday. Rick Becker, vice president of software and solutions, said neither Cisco nor any other vendor could compete against Dell with just blade servers, because his company offers a full range of servers including rack-mounted and tower models. But he also praised Cisco's data center switches and strategy.

"The Nexus and Unified Computing is going to be really compelling to a big segment of my enterprise customers. Strong Cisco shops will be really excited to manage their network, servers and storage from the network cloud, and we'll partner with Cisco to bring that compelling vision on my industry-leading platforms," Becker said.

Grabbing even a small percentage of the server market might be very lucrative for Cisco, which so far has managed to command premium prices for all its products based on its end-to-end architecture, analysts said. However, it would be incorrect to see such a move simply as Cisco starting a fight with longtime friends, even though it has had deep partnerships with HP and IBM, analysts said.

"If they chose to do this, it would also be a defensive move," Burton Group's Passmore said. HP is already repositioning its successful ProCurve networking division to better compete in Cisco's home market of enterprise LANs, and IBM is cooperating with Cisco rival Juniper in at least one area, with a broad cloud-computing partnership announced last month.

"The war has begun, and with or without this move, Cisco, HP and IBM are becoming more competitive," Yankee's Kerravala said. But despite the brewing confrontation, IT executives probably won't have to worry about sheer incompatibility among their products, he added.

"They're becoming more competitive, but they're still going to have to find a way to work together, for the sake of the customer," Kerravala said.

Copyright © 2009 IDG Communications, Inc.

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