servers

Cisco’s blade server market entry: Can it work?

Cisco is expected to launch its blade server project “California” today, and there is a lot of disagreement over just what’s coming. Some predict Cisco will enter the data center server market with a hardware product linked to its network virtualization tools. Others think the product will be more Unified-Communications-flavored.

The view that Cisco is getting into the blade server market has been refuted by some Cisco management comments (which doesn’t mean it’s not true, of course), and we believe it would be a major strategic error for Cisco to jump into the data center server market. Cisco will collide with major players like IBM and HP, and the company doesn’t call on IT buyers today.

We’re more inclined to see Cisco going after a different kind of server, something much more like a service delivery platform (SDP). SDP products have existed for a decade, but they’ve been hamstrung by a rather myopic voice focus. Cisco has a chance to create a vision of an SDP that’s focused on voice only as an element of unified communications and collaboration, but that earns its stripes in a value sense by what it can do for non-voice services.

We also believe that Cisco is looking at initiatives like Juniper’s JCS1200 and HP’s ProCurve, the former of which is a product that essentially offloads router control planes to external servers, and the latter is a means of binding applications more tightly to networks (one yet to be truly proven, we’d have to say).

The net of this is that there is clearly a mission for servers to host features and even network control behavior, and this space is pretty vacant at the moment. It’s not going to stay that way, whatever Cisco does with California.

Cisco blade servers — part of a bigger plan?

Rumors that Cisco was going to enter the blade server market have been swirling for a year now, and got some boost from being published in The New York Times this week. It appears from our sources that Cisco really is entering that market and will be making the announcement fairly soon.

The move is obviously a gutsy one. On one hand, Cisco seems to understand better than any of its competitors that if bits are commoditizing, you better be in a business that commoditized bits will stimulate if you’re going to keep pumping out bit-producing products.

The other side of the issue is that servers per se aren’t exactly an exploding market, and margins there are typically low. IBM and HP will really hate Cisco for competing and will likely counter-move. The risk for Cisco in being an ordinary IT server is so large it’s hard for us to believe the company would do it, and so we think Cisco may be trying something very smart, which would be to create specialized server appliances for feature hosting, linked intimately with Cisco switches and routers and creating a service ecosystem. Given Chambers’ announcement of service mashups or API harmonization at Cscape, this could get really interesting.