The Virtual Computing Environment, or VCE, collaboration among Cisco, EMC and VMware has been covered to death this week, and for good reason – it’s potentially huge news. In my opinion, though, the skeptics have this one right. Competition abounds at every level, and now, even one-time chums have every incentive to keep Cisco out of the data center.
The obvious repercussions for Cisco come from its former server partners HP, IBM and Dell. Server makers are partnering with other network vendors at a dizzying pace, with Juniper and Brocade reaping the most rewards, and HP is stepping up its ProCurve development. Together with in-house virtualization management software, these companies are building their own unified computing systems, with HP following fast on VCE’s heels with its own Vblock killer. These companies also can continue to push commodity servers, knowing that software from companies like Liquid Computing can help build data center fabrics without mainframe-style systems.
However, with the availability of Vblock, Cisco not only usurps server sales, but storage sales, too. HP, IBM and Dell, in particular, do big business in storage, but all are looking up at EMC. While a UCS sale means a lost server sale, a Vblock sale means a lost server sale and a lost storage sale. The VCE partnership might generate some new revenue for Cisco, but it gives the big three server vendors even more incentive to keep Cisco out of their sales altogether, thus losing Cisco some of its network revenue. For example, some are reporting that HP is nixing commissions on sales of Cisco gear.
And then there is the VMware component. Surveys show steady increases in adoption of non-VMware hypervisors, indicating that many businesses are tiring of VMware for one reason or another. Apart from its main threats of Citrix and Microsoft, VMware now must confront mounting pressure from Red Hat, which has made concerted moves into the cloud space, and just this week released its virtualization management solution. If customers don’t want VMware, it stands to reason they won’t want Vblock.
Additionally, many companies are nowhere near ready to go all-virtualized, so they require solutions that can handle virtualized and physical resources dynamically. IBM and HP both have management software to accomplish this from a single interface, and ISVs Egenera (a strong Dell partner) and the aforementioned Liquid Computing have their own takes on solving this problem in fabric environments. The Vblock systems include EMC’s Ionix management software for certain components but seem to rely on VMware’s vSphere for virtualization management.
All of this competition is on the product level, with no mention of whether Cisco, EMC and/or VMware, or the Cisco-EMC joint venture Acadia, can compete with IBM or HP in the actual sales process. An apples-to-apples analysis also ignores the question of whether specialized systems even will win out over the Google-style commodity-based approach. Cisco has made plenty of news with its data center strategy, but achieving success in a market already crowded with alternative products and strategies is a taller order — especially when it can’t look to IBM or HP for a helping hand.