Colubris

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.

HP ProCurve could threaten Cisco’s dominance

The New York Times has an interesting article about the rise of ProCurve, Hewlett Packard’s networking division. Gartner analyst Mark Fabbi told the Times that Procurve’s revenue has grown by 40% over the last two quarters, putting some pressure on Cisco’s status as the undisputed market leader.

The story explains that HP’s change in leadership from Carly Fiorina to CEO Mark Hurd has had a major impact on the company’s networking business. Fiorina maintained a close partnership with Cisco, in which HP sold computers and printers and Cisco sold networking gear to the same customers. Fiorina even offered incentives to HP sales reps who sold Cisco equipment without offering similar rewards for selling ProCurve gear. Hurd has reversed this policy, encouraging HP to focus on sales of ProCurve technology.

The company has also built up its ProCurve division this year through acquisition. This summer HP acquired Colubris, a maker of wireless LAN technology known for high quality products that are favored by manufacturers, hotels and other vertical industries that require reliable, large-scale wireless networks. Colubris also gave ProCurve instant credibility with 802.11n, the next generation of wireless LAN technology.

While HP builds up its networking business and threatens to be a serious competitor in the industry, Cisco has its eyes on a much bigger threat: the recession. Cisco has announced plans to shed $1 billion in expenses in order to keep its margins healthy during the downturn. Citing UBS Research, GigaOm has reported that Cisco will shut down operations for four days at the end of this year to save money. This follows other reports that Cisco has canceled its annual sales conference in San Francisco.

Can your access point help arrest a thief?

I got a chance to meet with the fine folks over at wireless networking vendor Colubris for the first time yesterday, and they were kind enough to give me a tour of their offices as well as explain some of their technology. Like most wireless networking vendors, they use a centralized controller to manage access permissions and hand offs, with what they say is an important difference.

The difference, Carl Blume, director of strategic marketing, and Tom Racca, vice president of marketing, said, is that Colubris avoids sending all the data traffic through the controller.

Instead, the controller first authenticates users on the wireless LAN, and then tells the acccess point (AP) how to route the data itself, which Carl and Tom said greatly cut down on the amount of redundant data flowing through the network. (They also said, like every other wireless vendor I have ever talked to, that they are the only ones who have solved 802.11n with standard PoE.)

Tom also relayed what I thought was an interesting story: Colubris access points can be set to work semi-autonomously, and if they get knocked offline they can be configured to automatically re-connect to the central controller. One school system, sick of APs wandering off, opened up a port in their firewall to let the devices reconnect even when they were out on the public Internet. Sure enough, a missing AP started phoning home, and the school was able to use the AP’s IP address to locate the missing access point … and arrest its thief.

We hear such “phone home” capabilities are going to become more common, and already stories of cameras and laptops photographing perps and posting their pictures are common. While maybe not a deal sealer, it’s certainly not bad as extra protection for devices that retail for $1000 and beyond.

Do you have any home phoning success stories?