Late last month SolarWinds acquired Profiler, a storage and virtual server management software technology from fellow Texas vendor Tek-Tools for $42 million. The technology provides visibility across storage, servers and virtual server environments.

On his blog ManageEngine vice president of product marketing Girish Mathrubootham claims that SolarWinds has been on a buying spree in recent years, acquiring a handful of companies like Tek-Tools, Kiwi and ipSurveyor in order to add functionality to its flagship Orion product suite. Mathrubootham argues that this is the approach that the Big Four have taken, creating management platforms that are huge, complex and pricey. He says:

Acquiring disparate products and integrating them at a GUI level may provide short-term boosts to revenue, but it is exactly this kind of headache that customers hate when dealing with the Big 4. (And SolarWinds would know this better than anyone else )

It’s true that SolarWinds has been acquiring point tools that expand the visibility afforded by its network management and application performance monitoring platform Orion.  However, is SolarWinds really hoping to become a tool of choice to server admins and storage managers? SolarWinds says it is making these acquisitions in response to what it hears from customers. The roles in the data center are changing and the tools that support these roles have to evolve, too.

Sanjay Castelino, vice president of product marketing & product management at SolarWinds says it all comes down to virtualization. The migration of virtual machines to migrate from host to host requires network managers to look beyond their organizational silos.

One of the things we seeing within the IT organization is this need for visibility across the network, the compute infrastructure, virtual machines, storage and applications in the data center. We looked at the pieces that we have in that: We have the network piece and the application monitoring piece and some server and virtual machine monitoring. Storage was an important piece to add to that mix.There is an overwhelming demand from our customers to get visibility into network, storage and virtualized environments.

You’re starting to see that these folks are starting to work more closely together. You can’t say “I’m only going to be a networking guy and I don’t have to talk to my peers in servers and storage.” That’s going away. These people have to get shared visibility so that when they make changes on one they don’t bring down pieces of the puzzle in terms of delivering applications. The networking guys own the networking piece and the storage guys own the storage piece, but all of them are wanting visibility across their domains into the other domains because they aren’t siloed anymore.

Is SolarWinds truly morphing into one of the Big Four? Will we have to start calling them the Big Five? Given that Orion is still a product that can be downloaded online, the complexity that ManageEngine is warning about seems pretty far off.

Here’s a video where a couple of guys from Solarwinds showing how the product works.

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Basically, this tool works like a configuration wizard. You enter the parameters you want for the configuration of a class of switches, routers, etc. The tool takes this information and outputs a configuration template in   Command Line Interface (CLI) code, which you can then cut and paste into the CLI consoles on any of your network devices.

It doesn’t scale that well. If you want to configure 100 switches, you have to cut and paste the CLI it into each one. But if you have some sort of network configuration management tool, you can probably drop these templates into that. Solarwinds, of course, is suggesting you use its Orion Network Configuration Management tool to apply these templates across your network.

Also, if you go to Solarwinds’ online community for customers, Thwack.com, you’ll find that Solarwinds customers are sharing their own configuration templates generated by Network Config Generator. You’re free to grab them and tweak them as you like with this free tool.

Today the Wall Street Journal reports that SolarWinds has set the terms of its IPO today. It will ask for a share price of $9.50 to $11.50 and it will make 12.1 million shares available to the market. SolarWinds hasn’t announced the date that it will go on the market, but the Journal article noted that companies usually time their IPOs to occur about two weeks after they set their terms.

IDC has identified SolarWinds as having the eighth highest revenue share in the network management market, just behind such industry heavies as IBM, CA, HP and EMC.

I received a press release this morning from Juniper specifically detailing the joint work Juniper and IBM are doing in cloud computing, such as Juniper collaboration with IBM to develop a single data center fabric for cloud computing with its Juniper’s Stratus Project.

Juniper also pointed out that the Brocade OEM agreement is only part of IBM’s larger Dynamic Infrastructure announcement today that highlights a new series of products and services from IBM aimed at helping enterprises build next generation data centers and move into cloud computing. Juniper is a critical participant in IBM’s strategy, Juniper points out..

In the Juniper announcement, IBM vice president for enterprise initiatives Jim Comfort said:

Juniper is an important supplier of networking products. IBM is already a reseller of Juniper’s Ethernet switches and routers and we continue to look for opportunities to expand this relationship to provide increasing choice for our customers and the flexibility to support their dynamic infrastructure needs.

Cisco’s rivals, particularly its rivals in the networking market, are eager to offer their opinions on what Cisco is trying to do. Michael Morisy will take a deeper look into that with a story on SearchNetworking.com tomorrow. In the meantime, here’s some of the feedback I’ve received from them over the last 24 hours.

Juniper

First up is Mike Banic, Juniper’s vice president of product marketing for Ethernet platforms. He notes that Cisco’s event was more conceptual than technical because Cisco may have been forced to unveil this project a little early.

There was a rumor that this event was happening a lot earlier than [Cisco] had planned because of the article in the Wall Street Journal on California. It looks like that reporter had a lot of good facts. So they moved this up because they didn’t expect anybody to get these details and they needed to slowly unfurl the story. They’d rather be telling this story when they have more details to share. i don’t think they’re really there. If they wante dto show us how they coulud simplify management [of the data center], they would demonstrate that. Otherwise, it’s just words.

Banic offered a contrast between Cisco’s approach and Juniper’s approach to simplifying management of data centers.

[Cisco is] not suggesting anything new here. Simplified management of compute resources and networks is something vendors in this market have been doing for awhile, like HP and IBM and newer entrants like VMware. For us, it’s very different from our strategy. We’ve focused on being network pure-play. The network is our strength. We’re not going to wander into knew worlds like servers. We’re focusing on connections. [Cisco] is going to perpetuate the multi-layer network model, whereas the Juniper vision is to have the whole data center network look like one switch. It will be multiple switches, but it will all look like one switch [in the management console]. We already have something like that with our virtual chassis switch. We can build a single logical switch for the data center. That’s what Project Stratus is.

Banic also noted that Cisco’s entry into the server market will further drive a wedge between it and traditional server manufacturers like IBM and HP, which Cisco has partnered with in the past. “Those vendors are in a better position and have more expertise and history with servers than we as a networking vendor. And we’re in a better position to work with those partners, like IBM.”

Brocade/Foundry

Brocade has been positioning itself to become a player in the data center networking market, particularly through its acquisition of Foundry Networks.  Elizabeth Walther, Brocade’s senior public relations manager, offered me the following observations:

• Cisco’s approach to Unified Computing is not revolutionary. Many companies with extensive experience in solving complex data center issues are already working on solutions
• Cisco’s approach is likely to be very capital intensive up front, which will be a major obstacle in light of today’s global economy.
• The challenge at hand — the evolution of the data center to a dynamic, fully virtualized state — is extremely complex and should leverage open architectures and industry standards.

Her second point, that it might be expensive, is a valid point. But I think companies that are looking to transform their data centers in this way know that they will have to lay down money to do it. Also, Cisco isn’t expecting broad adoption of this technology until four or five years out. By then (we hope) the economy should be rebounding.

Brocade is arguing that, despite Cisco’s talk about using open industry standards in Unified Computing, the initiative will still involve too much proprietary technology. Brocade offered this official statement, which expands on that point:

A dynamic and virtualized data center holds the promise of many compelling benefits for end-users including increased server utilization, decrease in power footprint and more efficient operations in general. However, achieving this goal is a complex challenge that can be best tackled by a broad ecosystem of industry partners and not based on a proprietary, singular architecture of one company.

In contrast, Brocade is already helping customers address these challenges by integrating our networking solutions with a range of mature computing, management and storage technologies from some of the strongest companies in the world. These partnerships are leveraging open interfaces/standards, co-developed technology, and products that are available today, which will lower costs and maximize return on investment for customers.

Blade Network Technologies

Blade CEO Vikram Mehta echoed Brocade’s position on Cisco’s ideas of industry standards will lock customers into a “proprietary world” while locking out vendors like HP and IBM that are “trusted open systems suppliers.” He said the standards in Unified Computing are tantamount too “standards with a C” as in Cisco.

Methta trashed Cisco’s announcement in his own blog with 10 reasons why Cisco’s Unified Computing won’t fly. Here are three of them.

• Unified Computing means standards with a “C.” According to Cisco, converged data and storage networking requires Cisco’s Data Center Ethernet (DCE), thus eliminating freedom of choice with a sole-source Cisco-only server and network. This puts at risk integration and interoperability with vast existing installations. The rest of the industry is working on an open approached called Converged Enhanced Ethernet (CEE) using IEEE’s Data Center Bridging (DCB) standards.
• It’s more about packaging than true innovation. For example, Cisco’s fabric extenders carry the same cost structure as switches, as they utilize similar switching silicon, physical interface components, and management processors. When compared to traditional switches – sharing management via “stacking” – the fabric extenders are another example of packaging, not innovation. The more costly data center infrastructure components – CPUs, RAM, and networking silicon – remain unchanged, except Cisco’s prices are higher and – surprise, surprise – more Cisco gear is needed to control them.
• Follow the money – into Cisco’s bank account. Cisco’s “California” server approach requires Cisco’s Nexus 5000 switches that start at $17K for a bare-bones Layer 2 switch and significant premiums for adding Layer 3 and FCoE functionality, so the total cost of ownership will be similar to the cost of living in California.

I should note that Cisco said Unfied Computing does not require investment in Nexus switches. Cisco executives told me the uplinks from a Unfied Computing System can plug into any vendors switches. Of course, customers will get the best performance out of the system by plugging it into Nexus switches, which offer the “unified fabric” technology that Cisco is promoting with Unified Computing.

As I receive more input from Cisco rivals, I will post updates here.

So it appears these rumors will be confirmed in some fashion on Monday, and the world will take notice.  However, the heart of Cisco’s business remains the network. That is where it dominates and that is where it reaps enormous profits. While Cisco reaches into new markets and competes with old partners like HP, another company is quietly positioning itself for a counterstrike.

Blogger Scott Lowe points out that Sun Microsystems is hinting at plans to compete directly with Cisco in the networking market. He notes that a new blog entry by Sun CEO Jonathan Schwartz pretty much confirms the speculation.

Lowe points to this money quote from Schwartz’s blog (The emphasis is Lowe’s):

As I’ve said before, general purpose microprocessors and operating systems are now fast enough to eliminate the need for special purpose devices. That means you can build a router out of a server – notice you cannot build a server out of a router, try as hard as you like. The same applies to storage devices.

To demonstrate this point, we now build our entire line of storage systems from general purpose server parts, including Solaris and ZFS, our open source file system. This allows us to innovate in software, where others have to build custom silicon or add cost. We are planning a similar line of networking platforms, based around the silicon and software you can already find in our portfolio.

Lowe notes that the comment about building a server out of a router is probably a shot at Cisco’s California. But Schwartz is also saying that the proprietary hardware and operating systems  that Cisco and other network vendors build are  unnecessary.

Note this statement:

At Sun, open source isn’t for servers. Open source is for datacenters.

He’s arguing that high performance networking devices can be developed with an open source operating system and high-performance, commoditized hardware. Open source networking start-ups like Vyatta have been making this argument for quite awhile.

Schwartz writes:

Leveraging inexpensive, general purpose components is one big advantage for us, but there are others – using a general purpose OS allows us to easily embrace specialized components (from flash memory to GPU’s), or adapt to new storage or networking protocols entirely in software. The underlying OS and server are so fast, these extensions and enhancements are simple feature updates, and ones we can leverage across servers, and storage and networking.

As everyone speculates breathlessly about what Cisco has planned with California, it’s easy to forget that companies like Sun and HP won’t be sitting still.

I think part of SolarWinds’ popularity can be traced to its distribution model. Rank and file IT pros can download affordable products directly from the company’s website. Many of the network managers I talk to also say Orion is just easy to use and it does what they need it to do.

While I’ve been waiting for a network equipment vendor to come along an snap up the company, SolarWinds has been making some moves of its own. It recently filed an S-1 form with the SEC, an early step towards an initial public offering (IPO) .

According to its filing, SolarWinds has experienced strong growth over the last few years – revenue of $38.2 million in 2006, $61.7 million in 2007 and $93.1 million in 2008. The company has more than 80,000 customers, including 400 of the Fortune 500 companies.

This isn’t exactly the best time to go pubilc, but based on the financials it provided to the SEC, the company is performing well. It will be interesting to see how the market treats the IPO.

UPDATE: Got an email from SolarWinds PR folks. This S-1 filing is an update of a filing the company made with the SEC last year. So I jumped that gun in saying the company is moving towards an IPO. Looks like it’s simply keeping things in place for an IPO for if and when I decides to move forward… which would probably be when this bear market ends. That could be a long time from now.

The ten-year deal was struck between Aviva and EDS, HP’s IT outsourcing business. According to HP’s announcement of the deal, EDS will take over and modernize Aviva’s two UK-based data centers. Both HP and Cisco “will provide select tools, technologies and resources to EDS in support of Aviva,” the announcement stated.

As I’ve mentioned before, HP and Cisco useed to have a friendly relationship when it came to selling into enterprise data centers. HP sales reps often received incentives to sell Cisco networking gear along with HP servers, storage and software. But the data center landscape has changed in recent years. Cisco is increasingly moving in on HP’s territory with its Data Center 3.0 campaign and its rumored entry into the blade server market. Meanwhile, HP has renewed its focus on its networking division, ProCurve. It has launched its own purpose-built data center switches. Clearly these two companies will be battling for data center domination rather than cooperating with each other.

Although HP is trying to compete head-to-head with Cisco in data center networking, deals like Aviva are still going to happen. It’s unclear how much HP’s EDS division will push ProCurve gear over Cisco gear if it affects the EDS’s ability to win a big data center outsourcing deal like this. ProCurve is certainly making a name for itself, but it still lacks the high-performance 10 gigabit Ethernet switching pedigree that other companies such as Cisco, Foundry, Extreme and Force10 have.

When Belden purchased Trapeze some experts were left scratching their heads about the deal. Belden is a leading manufacturer of cabling and other signal transmission technology. Many analysts have been predicting consolidation in the WLAN market, but they were expecting switch vendors like Juniper and Foundry to do the buying as networking vendors looked to build out a unified wired and wireless product strategy. HP ProCurve’s acquisition of Colubris seemed to fit in with this trend. Just look at a company like Cisco, which can sell its switches and WLAN access points to the same people. It makes sense from a marketing perspective.

But Belden is trying something completely different with Trapeze, and it will be interesting to see how it plays out. Graybar and Anixtar already sell Belden cables, and now Belden is trying to expand those relationships through Trapeze.

Belden is hoping that when companies are designing the basic infrastructure of a new building, such as network cabling and power, they will also design wireless infrastructure at that stage as well. If this happens, it would make sense for companies to buy their cabling and wireless technology from the same distributor as they prepare to build a new building.

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.