|By John Gannon||
|January 26, 2009 02:45 PM EST||
John Gannon's Blog
Cisco is getting into the server business, says NYTimes.com. One could argue that the writing was on the wall when Cisco announced their Nexus virtual switch platform complete with deep VMware networking integration, but now there are few doubts that Cisco has clear designs on owning a huge portion of the cloud computing market.
It is important to note that Cisco is not going to be getting into the box business (a commodity business with low gross margins). They are going to leverage their current architecture to build blade systems. These blades are bound to be highly configurable, customizable, and most importantly more easily managable by enterprise IT staff than existing x86-based servers. True, the other big server vendors have blade servers, but a Cisco/VMware combo is going to best equipped to deal with the networking nuances (and headaches) that become apparent as you virtualize a datacenter into a smaller physical footprint.
I think the NYTimes.com article is correct to assume that this will spur the server vendors to start playing more aggressively in the networking space. Blade servers have already encroached on Cisco’s territory as blade enclosures have ethernet switches built in, but I’d expect to see even deeper integrations and more robust feature sets from the server guys going forward.
My guess is that the open source routing startups (like XORP and Vyatta) are well positioned to take advantage of this shift because the server vendors could work with them to build integrated server and networking platforms (at a fraction of Cisco’s price). I’m also hoping (selfishly, as we have an investment in a datacenter switch company) that this will encourage the server vendors to look more broadly at their layer 1-7 networking strategy and how other players (besides Cisco) will fit in.
Cisco will certainly take a near to medium term margin hit (just as they did when they entered the carrier business).
I also think server vendors without a strong management software offering will feel some pain (Dell comes to mind) as Cisco (and HP and IBM once they respond) will be able to put together some very slick, integrated offerings that will make servers and networks much easier to manage.
[This appeared originally here and is republished in full by the kind permission of the author, who retains copyright.]
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