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Editorial: Venturing into new territory

Editorial: Venturing into new territory

Cisco throws down the gauntlet

Rumours that Cisco is plotting its very own server offering have been circulating for over a month now, but it was a blog entry from the networking giant’s CTO that shows the scope of the vendor’s plans.

While we still don’t know exactly what Cisco is going to announce, the vendor has made it clear it sees the datacentre as the next space to throw its weight around and, ultimately, conquer. According to CTO, Padmasree Warrior, its “unified computing” approach will provide the market with a new architectural premise linking up all aspects of the datacentre. The vendor has also stressed virtualisation as key in this approach.

After years of languishing in the background, datacentres are increasingly becoming an area of concern as corporates look to better utilise IT assets, get a hold on exponential storage growth, and reduce their power consumption and carbon footprint. At the same time, we’re witnessing a slew of advancements in server technology and of course, virtualisation.

Whatever Cisco does introduce, it’s going to be incredibly disruptive. As analysts have pointed out, the vendor has some very hefty competitors in the server market that aren’t going to give marketshare away easily. Organisations like HP and IBM have been critical partners for Cisco in getting its products to market, and you can bet they’re not too happy to hear another 800-pound gorilla is entering the ring.

The other aspect to this equation is margin. As we all know only too well, hardware margins are not what they used to be. Anything that Cisco releases is not only going to need some pretty nifty features, it also has to offer channel partners lucrative enough returns to get them onboard.

It’s not going to be an easy move, but for Cisco it’s probably a necessary one in securing long-term growth and relevance. Over recent years, the company has made it plain that it’s not content to just provide the dumb plumbing that joins IT infrastructure together. It’s also determined to have an integral role in how IT delivers services and applications.

As one integrator pointed out, the networking giant has already demonstrated an ability to secure dominance in emerging markets.

In recent years, Cisco has successfully installed itself in the voice market, initially though IP telephony and more recently, its unified communications offerings.

Whatever is coming over the new few months, it’s going to be an interesting market to watch.

In other news this week, some local listed integrators started to show the effects of the economic climate.

Two of Australia’s major players, UXC and Oakton, issued warnings around first-half year results, blaming slower sales.

It’s not going to be an easy ride this year, and these results are only the first sign.

But given IT’s critical role in helping businesses to succeed, I’ve no doubt those who keep a cool head will see good times again.


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