BusinessWeek asked a question a few days ago that I asked last June. Is Cisco stretching itself too thin? I can’t pretend to be expert enough to answer that question, but chasing 30 new technology markets at once is quite ambitious. Making multiple multi-billion dollar acquisitions of Tandberg and Starent to solidify its position in some of those markets is even more ambitious.
Cisco’s leap into the server market seems to have some investors rattled. The profit margins on servers are so much lower than on some of Cisco’s core markets (switches and routers). As BusinessWeek quoted one investor who questioned Cisco CEO John Chambers at Cisco’s annual meeting earlier this month: “At what size does Cisco become so big and diverse that its growth and profitability will plateau?” Chambers’ answer: hopefully after he retires.
Analysts and investors are wringing their hands over whether Cisco can remain nimble as it expands into new markets and burns its longstanding partnerships with server vendors like HP, Dell and IBM. BusinessWeek points out that HP’s aggressive expansion into the networking market is in part a response to Cisco’s moves in the server market. However, among the comments on the BusinessWeek story, someone named “CS” disagreed that Cisco fired the first shot. “HP has been (unsuccessfully) targeting Cisco’s core market for years with ProCurve. Was Chambers expected to sit idle while one of his largest partners openly attempts to undermine him?”
I’m not quite convinced that ProCurve has been targeting Cisco’s “core” market for years. ProCurve greatest success has been in selling edge switches to the midsized enterprise market. Does that sound like Cisco’s core market? Prior to acquiring 3Com, did ProCurve have any core routers on the market? Did it have any switches that could creditably compete against the Catalyst 6500 or any of the new Nexus switches?
So who started this food fight? Once the fight has begun, does it really matter? No. It only matters who wins or loses. Arguing over whether it was Chambers or HP CEO Mark Hurd who tossed the first plate seems like idle gossip.
Right now the winner looks to be enterprise customers. As Cisco expands and innovates, data center buyers have a new high-end server vendor to consider. And as HP integrates 3Com and H3C into its existing ProCurve division, enterprises networking buyers will find they have a truly viable alternative to Cisco to consider. Choice is always a good thing. And increased competition between vendors doesn’t hurt, either.
Move over data center, networking has regained its rightful place here at Interop NY this week.
Interop was once the networking show, but that ended years ago as the conference tried to become the virtualization show and the data center show to remain relevant.
That shift was reflective of an IT industry that seemed to place all of its emphasis on the data center with little on the apparently irrelevant network. That has clearly changed.
Ironically it is the data center that brought back networking relevance. Users at Interop are trying desperately to understand how to morph their networks to provide manageability and visibility of virtualized environments and deliver dynamic applications and data in a service-provider-style environment.
Networking track moderator Jim Metzler put it best Wednesday during the session “Breakthrough Network Technologies” when he said, “It wasn’t that long ago I thought networking was pretty staid. Not a lot was happening … Technology had gone from frame to ATM to MPLS … and there was no post-MPLS.”
Now talk has turned to implementing network automation in order to apportion dynamic compute resources and applications on demand. Users are asking for better visibility and management tools that work across physical and virtual networks.
Network security is a changed topic at Interop, with conversation focusing on application-specific strategies and the ability to monitor and prevent attacks across private and public networks in the cloud.
SLA is another buzzword as attendees are grappling with requests from their enterprises to ensure application stability and service provider-style services.
In most of these areas – automation, security, SLAs, it appears there are few solutions that satisfy networking teams. Automation is not broad enough and often doesn’t work in multivendor environments. It appears that networking teams are not ready to provide real internal SLAs and that service providers – Amazon, Google and Microsoft included – are unable to offer SLAs that satisfy. Security is ever evolving, but tools are far from able to offer the reporting and analysis networking pros need to entrust their data even to a hybrid cloud model.
Regardless of the unresolved issues, it is at least clear that the network is, and will continue to be, the lifeline of this emerging matrix of virtualized environments delivering dynamic data and applications. Now it is time for the network to meet the challenge.
Guess what networking teams? Consider yourselves service providers. At least that seems to be the message here at Interop New York.
This morning Citrix CEO Mark Templeton and Cisco VP Marie Hattar keynoted the conference, both highlighting consumerization of enterprise IT and its influence on worker expectation on applications and services.
“Our experience when we go home is a better experience than we have [at work],” Templeton said. “Consumerization will force more IT change in the next 10 years than any other trend.”
As enterprise users expect the same type of applications as consumers, enterprises will move to a cloud computing model (likely a hybrid of public and private) in which applications and services will be delivered to any user on any device in a completely secure manner, both Templeton and Hattar said.
Templeton explained the shift as the next phase in the IT evolution, first from mainframe computing to distributed client-server architecture and now to the cloud. This latest shift will “eliminate [some of] the distributed elements” by implementing virtualization of servers, desktops, applications and networks, Templeton said.
In that move, the data center will become known as “a delivery center,” in which the service is controlled, but not the device he said.
The heavy cloud focus here at Interop is also leading to mass discussion about a move to the flat network in which switching layers (access, aggregation/distribution and core) are collapsed, enabling enterprises to use access switches to connect into the core, wiping out the middle level.
A number of users here at the show were quick to point out the many problems with flattening the network and broadening Layer 2, including running out of IP addresses, and a lack of automation and management techniques.
For $2.7 billion, Hewlett-Packard (HP) agreed to acquire 3Com Corporation — an IT networking vendor most noted for its routers, switches and security products. The announcement came at a public press conference held at 5:00 p.m. EST, November 11. HP expects to close on the deal in the first half of 2010.
Although HP missed buying Brocade, acquiring 3Com proves more compatible and powerful. For one, both vendors share a similar vision: interoperability and compatibility. In the HP to acquire 3Com conference call, HP’s 3Com acquisition was considered an accelerator to its “converged infrastructure strategy.” On the other side, the very name of 3Com (computers, communication and compatibility) echoes HP’s voice on converged infrastructure strategy.
Both vendors’ strengths also reside in Asian markets. HP’s 3Com acquisition will mean domination in China’s IT market share, a highly-valued strategic asset. (See HP-3Com acquisition hits Cisco the one place it hurts.) The shared market is seen as an upside, said Dave Donatelli, EVP and general manager of enterprise servers and networking. This is due to contrasting accounts which will further increase its position in China.
While the companies share a great deal (including offices in Marlborough and Silicon Valley), what differs is the game changer. 3Com’s portfolio has populated HP’s non-existent core networking infrastructure technology. These technologies will bring strength to its data center switching solutions.
“[3Com] broadens our entire capabilities. One of the biggest questions[/concerns] we’ve had from customers has been ‘We like your edge product, but we need you to be able to play across our entire networking infrastructure,’ and this acquisition enables us to do this — adding core switching, routing and security products to us,” said Donatelli.
In addition to 3Com’s core and edge routing, 3Com will offer its threat management, intrusion prevention and data center security solutions in what was HP’s weaker product portfolio.
With differing solutions being added to HP’s portfolio, there is hope that few layoffs will occur. However, comments across several websites (such as Twilight in the Valley of the Nerds’ HP’s 3Com acquisition post, Engadget’s HP to acquire 3Com in $2.7 billion deal story and The Metro West Daily News’ Marlborough’s 3Com to be sold $2.7B article) express fear of an addition to the rising U.S. unemployment rate.
The gloves are off in the Cisco-HP battle. HP’s move to acquire 3Com hits Cisco in one of the few places it really hurts – China.
3Com controls 32% of the Chinese networking market (with $700 million in revenue) and has held Cisco at a dead heat there – something no other networking company has been able to do in other markets. If the acquisition goes through, HP would have a tighter grasp on that market – and a more complete portfolio with which to battle Cisco globally.
“I think this is 75% about geographic market acquisition (in China in particular) and 25% about product acquisition,” said Robert Whiteley, a Forrester Research director.
On the technology front, HP’s ProCurve chief Marius Haas said the acquisition would give HP an “edge-to-data-center core” portfolio and he promised barely any overlap between the two product lines.
That, in fact, won’t likely be the case since both have extensive and similar switching lines.
A more likely scenario is that HP – which has the most successful edge switch in terms of sales – will scrap its own core switching line, replacing it with 3Com’s H3C product.
“ProCurve built its own core switch a few years back, but it wasn’t gaining a lot of traction. With 3Com they get a much more scalable switch that is a better fit for high-end datacenter and cloud networking initiatives,” Whiteley said.
3Com will also bring a router story to the table.
“ProCurve never really had routers, so the H3C assets will help here again. I don’t think this is as big a deal, since the majority of enterprise refresh is on L3 switches, which are more relevant in the datacenter, and where Cisco doesn’t have quite the stranglehold it does on router,” Whiteley said.
The companies would not say Wednesday which, if either, of the ProCurve or 3Com H3C labels would be shuttered. Either way, the core and edge networking components would obviously be coupled with HP’s data center servers, giving Cisco a run for its money on that front too.
The two companies also swung at Juniper Networks, which consistently sells its components on being more economically efficient in operating costs because they run on one joint operating system – JUNOS. 3Com’s components were also engineered in-house and therefore share one operating system, said 3Com President and COO Ron Sege said, adding that the motto on the OS is, “Learn once and support many.”
In the same breath, Sege also promised that 3Com and HP together would provide networking equipment that wouldn’t be proprietary like Cisco’s causing vendor lock-in. It’s difficult, however, to sell a portfolio on having a joint OS if users aren’t being asked to buy into a one-vendor system.
3Com also brings its Tipping Point security line to the table, which brings HP in line with Cisco and Juniper on that front.
The acquisition is pending regulatory review.
Without the pomp and circumstance of say a Cisco or a Juniper, Fujitsu launched a 26 port, super low-latency addition to its line of 10 GigE switches. Fujitsu’s selling point?
“We pass packets fast and we pass them reliably,” said Jim Preasmyer, director of sales and business development, Advanced Technology Group, Fujitsu Frontech North America.
“Our customers say that they plug the switches in and they just work.”
Fujitsu has actually been in the Ethernet switch market since 2005, and this latest switch – the XG2600 – joins a family of Layer 2 Ethernet switches that include 12 and 24-port 10 GigE models, as well as 12 and 48-port 1 Gb/10GbE models.
“Our engineers developed a low latency ASIC and then built a switch box around it,” Preasmyer said.
Fujitsu is also selling on energy efficiency promising use of under 130 watts on the 2600 switches.
As for target markets, Fujitsu will aim for any large enterprise looking for the right switching architecture to support high performance computing and ISCSI or NAS. The company will target universities, content delivery companies, and others that depend on fluid applications flowing between storage, the data center and beyond.
Networking teams are increasingly asked to provide internal Service Level Agreements (SLAs) – which are not easy to create or live up to. Implementing ITIL v3 strategies may make it easier to provide internal SLAs, but at this point ITIL is often more theory than it is practice in the enterprise.
At the Large Installation Systems Administration (LISA) conference in Baltimore this week, Carolyn Hennings, senior consultant at Windward IT Solutions, discussed how enterprises can make ITIL a reality and how to address the dreaded internal SLA.
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Network monitoring tools have grown over the past couple of years to meet the needs of networking engineers, but often nothing fits the bill quite like an open source tool that enables tailor-made configuration and parameters. Still, these tools can also lead network engineers to be mired in development.
For The Church of Jesus Christ of Latter-day Saints, using Nagios to develop open source network monitoring has led to cost savings and efficiency — along with a couple of challenges. This week at the Large Installation System Administration (LISA) Conference in Baltimore, Adam Augustine, talked to SearchNetworking about using open source tools for network monitoring.
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In a full scale offense against Cisco, Juniper Networks unveiled an ecosystem of new hardware components, a software strategy and a super-speed chipset — as well as plans for a partnership to release blade switches. Juniper’s re-branding effort and new technology will officially launch today on the NYSE floor.
Central to the release is the software strategy that includes a revamped version of Junos OS (Junos SDK), the Junos Space application platform (with open APIs) and the Junos Pulse network client that will provide security and identity management, VPN control, and connection control.
The new strategy ultimately extends Junos from network devices to the layers of the network, enabling users to program applications into the very layers of the network, enriching services, optimization and control.
The Junos Trio chipset with so-called 3D Scaling technology will be delivered in modular line cards for Juniper MX Series, providing two to four times faster throughput than the competition — up to 2.6 terabits per second.
Beyond speed, the chipset runs on a new architecture based on a “Network Instruction Set Processor” with software on the device that can be customized for network behavior control rather than general purpose instructions, writes Tom Nolle, president of the CIMI Corporation in his Uncommon Wisdom blog. He continues:
In this respect, the chip is almost like an ASIC, but unlike an ASIC it’s programmable at the primitive NISP-instruction level, so new features can be added right down to the instruction level. It’s this architecture that accounts for the considerable improvements in performance, scalability, power efficiency, etc. that Juniper has demonstrated (through independent lab tests).
Juniper also announced a host of new partnerships that will bring it directly in competition with Cisco in the data center. The Juniper-IBM OEM will be extended, with IBM now selling Juniper’s SRX line. Under the Dell-Juniper agreement, Dell will sell Juniper’s networking equipment (it has a similar deal with Brocade) and the companies will deploy a common OS (JUNOS) and management platform.
As part of another partnership, Blade Networks will develop blade switches running on JUNOS.
Ok, so Juniper spent A LOT of money unveiling its new logo Wednesday night. The networking company hung video signage over the front half of the NYSE, and took over the stock exchange floor with a gala that flowed with Johnnie Walker and shrimp.
But does the costly rebranding reflect the importance of this latest technology push? Depends on who you ask.
Juniper was still short on technology details, withholding the actual announcement until Thursday at the official launch. But executives milling about confirmed a super-powered Juniper chipset that one managed service provider at the event said would ensure huge amounts of transport to the millisecond.
That may be what Juniper is referring to with its new marketing tag: “The New Network.”
Juniper insiders also confirmed the launch of an open API network-based application platform that will enable developers to spin their own apps all running on JUNOS, Juniper’s OS that stretches across all of its networking and security products. One executive said Juniper “realized it needed a software strategy” but didn’t want to “buy other companies to make that happen.” An obvious swipe at Cisco.
If there is a data center equipment plan, it appears to come in the form of an OEM partnership which Dell announced Wednesday afternoon. As part of that agreement, Dell will sell Juniper’s networking gear (it has a similar deal with Brocade), and the companies will deploy a common OS (most likely being JUNOS) and management platform. That could position Juniper to take on Cisco in the data center, but is still not the execution of the “data center vision” it promised last winter.
“They have a ‘data center vision’, but no real plan still,” said Yankee Group analyst Zeus Kerravala, questioning where the news was behind all of the hoopla.
Kerravala also criticized Juniper for lacking a plan to deliver mobile data. Cisco bought into that strategy when it acquired Starent this month.
As for the rebranding – Juniper executives denied there was serious extravagance involved, and said it is all necessary.
“The company didn’t have a marketing bone in its body before,” said Juniper channel chief Frank Vitagliano. “This is perfect timing now that we are coming out of a bad economic time.”
So while endless appetizer shrimp + Wall Street still equal excess amid a recession to some, a top Juniper marketing executive promised the company’s brand re-launch was within the “typical marketing budget” … to which Kerravala responded, “What’s typical?”