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Editorial: Placing a new bet

Editorial: Placing a new bet

Two significant stories broke in the past week which have the potential to overturn the global IT infrastructure market status quo.

The biggest news, and arguably one of the most signifi cant vendor announcements for 2009, was the offi cial launch of Cisco’s Unifi ed Computing System and range of Intel-based blade servers (see page 1). The offering is aimed at driving take-up of what the networking giant coined “next-generation datacentres”, and sees it come into direct competition with long-term hardware partners such as IBM and HP.

The announcement has major implications for Cisco, its OEM partners, and its channel. There’s no doubt Cisco is going to be sitting on a massive see-saw over coming months as it tries to appease existing vendor hardware partner concerns, while forging or expanding relationships with many software and application players like BMC and Microsoft.

In recent years, Cisco has made a concerted effort to expand out from its position as the dominant networking hardware vendor, and into intelligent systems as well as Web 2.0 applications (think WebEx). It’s not surprising the vendor now wants to cement its role in not only providing the networking backbone, but also managing the datacentre: This part of the market has become such a critical one for delivering technology in the future. Emerging technologies such as cloud computing, virtualisation and software-as-a-service, along with a concerted customer push towards sustainable technology practices and power management, have put datacentres in the spotlight. For many, these present opportunities for future sales and growth and Cisco isn’t planning to lose out.

I do wonder whether the rumours of IBM’s acquisition of Sun Microsystems emerged as a direct response to Cisco’s moves (see page 1).

News that the two are in discussions got a mixed response. On the one hand, some industry representatives see this as a way for Sun products to secure a future, while allowing IBM to strengthen its server technology portfolio and foster tighter ties in the open source community. But for many resellers, it raises uncomfortable questions about product roadmaps, business culture, support and direction.

Comments from Microsoft CEO, Steve Ballmer, were telling. At a media summit in the US last week, he suggested a union between IBM and Sun Microsystems would give Microsoft a competitive advantage during the time IBM worked to incorporate Sun’s copious assets into a combined company. But while seeing it as a good “exit strategy” for Sun shareholders, Ballmer questioned IBM’s motives for such a deal.

What’s obvious is that we’re about to see major disruption in the vendor space. Vendor co-opetition and rivalry goes in cycles, depending on the maturity of technology, what customers are buying, software and platform development. The recent alliances between Microsoft and Novell/Red Hat are just a couple of examples of unusual pairings.

The unprecedented global economic downturn has thrown even more curve balls, and it will be interesting to see if either of these two initiatives succeed. I’d love to hear more on what you all think about these two stories, so drop me a line and share your thoughts.


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