Comment provided by Tim Stammers, senior analyst at Ovum, a global advisory and consulting firm.

“The v-word consolidates more than just servers

One of the biggest reasons why Cisco is hugely successful at selling networking gear is that it provides customers with one set of tools to manage their entire data centre networks. Cisco knows that to keep that advantage it will have to manage much more than just the networks.

That is because server virtualisation is about far more than replacing multiple physical servers each running one application with just one box running the same applications isolated into virtual machines (VMs). It is also about the ability to move those VMs very easily from one physical server to another, which is hugely useful for availability, load balancing and disaster recovery.

Freedom of movement carries a price, part of which is that storage and LAN networks have to follow VMs around as they move, and existing physical management systems also have to know what is going on. That only happens imperfectly now, and much more integration is needed between the different management systems.

Hence VMware’s talk of working with other suppliers to create a “virtual data centre OS”, which will tie everything together, and automate the whole nine yards. VMware’s major virtualisation rivals Microsoft and Citrix have similar ambitions. The ability to virtualise transport connectivity and networks is beyond their current scope. Thus Cisco’s move could signal a milestone in the convergence of computing and networking.

Clearly businesses will want to buy that unified management system from one supplier, rather than stitching it together from multiple sources. On the other side of the coin, that single supplier will have a controlling role in the data centre.

Cisco is in a strong position

Alongside the servers, Cisco is also promising networking gear that it says will simplify connections to racks of virtualised blade servers. This could mean Cisco server blades in the Nexus switch, eliminating complex I/O protocols between server application and network transport layers. Cisco management software will also automate reconfiguration work, for example when extra physical servers are added to a system, Cisco says.

Selling the whole enchilada means providing the corn bread wrapping as well as the filling. Unlike management systems, servers are commodities, but they are an essential part of the package. If Cisco’s customers have to buy their blade servers from HP or Dell, then the door is open for either of those two to offer their management tools to customers, or to tailor their blades to work better with those tools. Moving into more direct competition with those players – and with other systems management players such as IBM and BMC – is a price that Cisco cannot avoid paying unless it wants to be sidelined in the future.

Competition between suppliers that also cooperate is hardly new. Cisco is already in competition with HP and IBM on the networking front. HP has clawed itself a small share of the high-end data centre networking market with its Procurve switches, while IBM is partnered with Cisco’s much smaller rival Juniper. That highlights Cisco’s huge strength in a coming unified market, which is its ownership of the data centre network.

Can a networking giant become a systems management player? It is equally valid to ask whether server and systems suppliers can become networking management specialists. Cisco’s most obvious recent expansion onto new turf was the move into the specialist storage networking market, which it made around seven years ago. Some doubted Cisco’s ability to do this, but it did, and well.”