Channel cautious on Cisco server play

Channel cautious on Cisco server play

InDepth article on Cisco's foray into the server game.

Cisco’s foray into the server game has been met with both nervous apprehension and warm approbation by several of its Australian partners.

In a previously hinted-at development, the networking giant last week offi cially unveiled its Unifi ed Computing System, which includes a new range of blade servers – the UCS B-Series blades based on upcoming Intel Nehalem processors – virtualisation technology, and services in partnership with Microsoft, VMware and BMC. Cisco will also sell and support Red Hat Enterprise Linux in what is its new datacentre architecture.

The move brings the vendor into direct competition with long-standing partners, IBM and HP. With Cisco being dominant in the networking space, some partners are concerned the blade server move could push them and their customers into an unwanted single-vendor scenario.

“We have been doing a bit of work around it, and from where we see it, their new approach is moving to a model where it is basically going to make it harder for us to be hardware agnostic to plug into Cisco’s datacentre play,” partner Brennan IT general manager data and IT services, Chuong Mai-Viet, said.

“We are doing a lot of hosted solutions but we are not very vendor centric – we will use an EMC SAN, an HP SAN, and predominantly have HP servers, but we will also have IBM servers. And as clients add and remove things from our network, having a fully proprietary model is going to make it hard for us.”

Mai-Viet applauded the reasoning behind Cisco’s approach – targeting the datacentre and virtualised environments – but claimed many outsourcing companies would have issues with the single-vendor model it could create, particularly in the mid-market.

The Frame Group infrastructure solutions manager, Mark Harriss, said the same apprehension could be seen in large corporations.

“Our customers have already adopted policies around their procurement strategies with existing vendor selections often working around threeyear cycles,” Harriss said. “There could be quite a long lead time before we see the corporates changing selection and Cisco getting traction in that space. The other thing is we may see some resistance from corporates to a single- vendor solution.”

The new blades were also unlikely to get much traction in the SMB sector, founder of national integrator PKBA, Peter Kazacos, said.

“I don’t know if there is room for another player. In the small to medium market, the Cisco brand isn’t as well recognised, whereas the IBM and HP brands are,” he said. “They are more likely to fi nd acceptance in the larger organisations where the Cisco brand is well recognised.”

Some partners were nevertheless excited by the server play and anticipated performance boosts and opportunities for innovation.

“We think Cisco may challenge the current market thinking around the technology,” Harriss said. “They are approaching an existing technology from a different angle. It is too early for us to be able to say whether this will be a paradigm change. However, if this does present legitimate opportunities to the way businesses function, this is a change for the right reasons.”

Eastern region director of integrator ComputerCorp, Tony Heywood, saw it as an opportunity for Cisco partners to deepen their relationships with a successful vendor.

“Ultimately, every vendor needs to justify its own existence,” he said. “If Cisco continues to branch into these areas and broaden its product range, as I think it will, then it should become a serious player and competitor to the incumbent vendors.”

Analysts also welcomed the server offering’s ability to address two key restrictions around virtualisation – I/O and memory.

“If you couple that with the fact that it is going to be a blade form factor – blades are growing at double-digit growth, whereas there is going to be a slight decline in other form factors. Also that this is going to be a strong datacentre play – it is the perfect storm,” IDC enterprise server and workstations analyst, Matt Oostveen, said. “They are going right after the core issues and it is going to really shake up the market place.”

Oostveen warned the vendor’s go-to market strategy would most likely begin with high-touch, direct deals.

“If it comes to one of the large tenders or bids, I don’t think Cisco will fare so well compared to the HPs and IBMs of the world,” he said. “I don’t think that is going to be their strength and to be honest, I don’t think that is where we will see them playing. Where we will see them playing is in technical, direct engagements or high-touch engagements where they probably already have a Cisco house.”

This doesn’t, however, preclude channel partners from getting a piece of the action.

“I expect the channel strategy will be very important to Cisco. I don’t think that is where Cisco wants to have all the high-touch engagements but it is a way for them to get a wedge into the market,” Oostveen said. 􀂄

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