Blue Coat

Cisco and HP: Data center frenemies now poised for all-out war

What would the data center vendor market look like today if Carly Fiorina hadn’t been ousted as CEO of HP back in 2005? Under her leadership, HP maintained a cozy detente with Cisco. The two mega-companies happily engaged data center customers together.  Cisco sold them switches and routers. HP sold them servers, storage and management software. And HP’s networking division, ProCurve, was consigned to operate in a relative backwater, carving out a solid niche with a pipeline into the SMB networking market.

Current HP CEO Mark Hurd has changed things up. First he named Marius Haas, a rising star at HP who had spent the previous four years overseeing the absorption of HP acquisitions, as ProCurve’s new senior vice president and general manager. Then Hurd and Haas snapped up the well-regarded wireless LAN vendor Colubris, giving ProCurve instant WLAN cred. Before the Colubris deal, ProCurve’s WLAN strategy was built upon an OEM partnership with Motorola.

Word soon came down from above. The incentives that HP had long offered to sales representatives who sold Cisco gear along with HP servers and storage were off the table. ProCurve products were the new priority.

Then last month ProCurve announced its first purpose-built data center switches. ProCurve executives made it clear while briefing reporters and analysts about these new switches that the incentives HP sales reps had for selling Cisco products were long gone. HP would be bringing the full might of its data center presence to bear on its ProCurve strategy. Enterprises could now expect HP sales engineers to offer packages of HP servers, storage, switches, software and services. Quite a proposition.

Of course, none of this has been happening in a vacuum. Cisco hasn’t been sitting still. For a couple years now, Cisco has made it clear that it intends to conquer all things data center as well. It has invested more than $1 billion in rolling out its new Nexus switch line. It has unleashed a barrage of new data center management software and services, labeled Data Center 3.0. And rumors continue to buzz about “California,” Cisco’s much anticipated entry into the blade server market.

So what happens next? It’s safe to say this battle will result in some acquisitions as each company tries to add some weapons to its arsenal.  Allan Leinwand at GigaOM recently suggested a whole bunch of acquisition targets for HP.  For instance, he suggested that HP snap up Arista Networks, Blade Network Technologies, or Force10 Networks in order to beef up its 10/100 gigabit Ethernet portfolio. For storage optimization, he suggested someone like DataDomain.  He said HP should expand into WAN optimization and application delivery, by picking up someone like Blue Coat Systems or Zeus Technology. He also suggested HP target one of the emerging cloud computing specialists.

Meanwhile, Ashlee Vance at the New York Times blogged that Cisco is hoarding cash, leading many to speculate that a flurry of acquisitions is on the horizon.  Vance says that Cisco CEO John Chambers is looking to strike next in the consumer electronics market with the $30 billion in cash it has on hand right now. But enterprise vendors are also rumored targets. Given Cisco’s strong investment in expanding its data center footprint, I think it will spend some of that money on vendors who will help it make war on HP. The EMC rumors just won’t go away, for instance. Last year I heard some whispers that Cisco might make a smaller deal for network management software vendor SolarWinds, but I haven’t heard much about such a deal lately. I’ve seen speculation that Cisco might also target VMware, which it already owns a small stake in. That would be a huge deal, but why would EMC sell it? VMware is a big performer for it. Cisco might buy EMC just so it can have VMware, but the price would be steep.

Once the dust settles over the acquisition blitz, what happens next? I just read a great blog post by Christopher Hoff (hat tip to IDC’s Abner Germanow) which offers a great overview on where all of this is going. For instance, Cisco isn’t really getting into the server business, he says.  Instead, the so-called blade server Cisco is rumored to be working on is a natural outgrowth of the convergence of computing, where storage, servers and switches are becoming more tightly integrated into one infrastructure that supports virtualization and cloud computing.  He writes:

My point is that what Cisco is building is the natural by-product of converged technologies with an approach that deserves attention.  It *is* unified computing.  It’s a solution that includes integrated capabilities that otherwise customers would be responsible for piecing together themselves…and that’s one of the biggest problems we have with disruptive innovation today: integration.

I imagine HP plans to travel down this road as well. Indeed, this should be a very interesting year.

Are the Olympics IT’s worst nightmare?

It sure sounds like it from where I sit sometimes. Shamus has a piece where he reports on how streaming Olympics video will drain corporate bandwidth, and what some IT departments are doing (or not doing) to curb bottlenecks. Talking to Blue Coat and Cisco yesterday, I felt privy to some evil conspiracy: Not only do they sell equipment that helps IT manage massive influxes, but they’re helping create and send through all that pesky HD content. Where’s their compassion for the common man?

As if this was not bad enough already, Tallulah David, who does PR for Merritt Group, pointed me to another scary Olympic angle on SOPHOS labs’ security blog: Ne’er-do-wells tapping into the Olympic excitement to spread exploits through Olympic-themed trojans and even legitimate news agencies like the AFP, with many of their partners falling victim to a SQL injection attack.

Even Beijing National Stadium, the site of the opening ceremonies and one of the most advanced venues I’ve ever seen, suffered a Blue Screen of Death during its critical moment in the spotlight.

And this doesn’t even touch all the non-technical scrutiny the networking profession has received based on China’s massive Internet filtering and firewalling project. Why can’t IT just cheer for Team USA, or Team China or India or Britain, in relative peace for once? Is that too much to ask?