Does Cisco's server grab exceed its reach? 16 March, 2009 By Steve Wexler

PromoPipeline Exclusive Channel Promotions Find Out How You Can Make Money Today! ENROLL FREE! >> Factory Direct Should Not be Cheaper William Vanderbilt - Innovative Learning Channels Cloud Ecosystem II: A Candid Conversation with Oracle Beth Vanni - Amazon Consulting Cloud Ecosystem: A Candid Conversation with Rackspace Hosting Beth Vanni - Amazon Consulting Channel Manager Compensation William Vanderbilt - Innovative Learning Channels Financial Expertise William Vanderbilt - Innovative Learning Channels

At the UCS launch confirmed partners included Accenture, BMC, EMC, Emulex, Intel, Microsoft, NetApp, Novell, Oracle, QLogic, Red Hat, Tata, and VMware. And there are more to come, said Cisco CEO John Chambers. It gives us a chance to become not just the leading company in communications, but, along with our partners, the leading company in IT, he said. The products aren't expected to ship until June, but a number of analysts provided their thoughts on Cisco's UCS initiative. For the most part, they agree that Monday's announcement is a game changer.

It's a daring move in this economy, said Jon Oltsik, senior analyst at the Enterprise Strategy Group, and has already created a wedge in Cisco's relationships with HP and IBM. "Both companies anticipated this and have been distancing themselves." IBM has been partnering more with Juniper recently, and HP has been pushing into the data center more with its ProCurve family.

However, while it has created friction with the server vendors, it has also created a strong ecosystem, he added. "Cisco did a very good job of rallying the industry around its announcement." That's key to the success of this initiative, especially keeping it open, said Oltsik.

The partner alliance is very important as is the mix of organizations, said Michelle Warren, MW Research. "I think it will be a key differentiator. They can't do it alone, they have to partner with other organizations, and they have to have a strong channel partnership."

It's also essential that Cisco increase its involvement in the data center, she added. "The data center is where have to be, it's where a lot of the technological innovation is going to take place over the next few years."

Jim Frey, research director, network management, Enterprise Management Associates (EMA), said Cisco had to move in this direction to avoid watching its business be commoditized. However it's an evolutionary step and one that Cisco is uniquely positioned to take. The data center can't exist without networked computers and Cisco knows networks, he said. For its competitors, integrating the network into their computer platforms is a more difficult undertaking.

"I really do think this is an important broader step on the macro basis," said Frey. "Even if Cisco doesn't come in and take over the data center, which they won't, they will push the other vendors".

Pund-IT's Charles King called it "a pretty audacious move by any measure. It will be interesting to see how the other vendors react." He said Cisco will definitely be testing the edges of co-opetition.

"Basically, it means in the long run there'll be a big fight with IBM, HP and anybody else that doesn't align with Cisco, either because they're supporting someone else, or because they've got their own strategy/offering," agreed Warren Shiau, The Strategic Council.

Rob Enderle, Enderle Group, added that the split with IBM and HP could be expensive. "Some of the most costly failures I have witnessed in my life resulted from moves like this."

However, he also thinks this could turn out to be an incredible victory for Cisco. "Were this any other kind of year I'd say this was sure to fail and fail badly. However, when you have the kind of massive economic problem we have this year this could not only work, but it could be massively successful and transform an industry. Power structures are in flux and layoffs have likely combined responsibilities anyway so the typical pushback may simply not be strong enough to overcome the obvious cost benefits of collapsing server responsibilities into networking. This year dollars speak loudest and, done right, this could change a market."

While Pund-IT's King agrees with EMA's Frey that getting into a new market where Cisco effectively has zero market share, is very attractive to the vendor -- "large vendors tend to be like sharks, if they're not moving ahead they're in danger of dying" -- he sees the deeper issue as cloud computing. The two major enabling technologies are virtualization and integrated networks, and Cisco's Unified Computing System is the next logical step.