Cisco Preps Server-Switch As HP Prepares Flank Attack - InformationWeek
07:11 PM
Connect Directly

Cisco Preps Server-Switch As HP Prepares Flank Attack

Code-named California, Cisco's server is expected to meld Cisco's Nexus 5000 switch, Intel's Nehalem processors, and virtualization management with help from VMware.

Goldman Sachs and Credit Suisse are believed to be testing Cisco's system; they declined comment. California interests Hilton CIO Tim Harvey, whose company has a strategic relationship with Cisco but who hadn't heard of the technology until being told in an interview.

"I love to see people expanding capabilities that were on several boxes into a single platform. It just means a simpler environment for us," he said in an interview. "The management side and reliability side of computing has become harder as things have gotten more complex."

It's likely not only technology that's pushing Cisco in this direction, but Wall Street as well. The company consistently aims for more than 10% growth year over year, and it's running out of big growth opportunities. The server market is worth tens of billions of dollars, and that may be too lucrative to ignore, said Vikram Mehta, CEO of Cisco competitor Blade Network Technologies, who has seen California being tested by several organizations. He calls this Cisco's "world domination strategy." However, he added, it may even alienate relationships Cisco has had with HP and IBM.

Facing HP, IBM, and Dell, none of which would comment for this article, will certainly be a challenge.

"Servers have higher mind space with CIOs," said Yankee Group senior VP Zeus Kerravala. "You can make the same argument that why would somebody buy VoIP from Cisco, so they've done it before. The difference is a larger class competitor here. I wouldn't bet against them, but if they get into the server space, it would be the riskiest move the company has ever made."

Price could be one of Cisco's advantages, but it doesn't look like Cisco wants to play that game. According to a source, Cisco believes it will make roughly the same margins from California as typical Cisco products, which carry much higher margins than servers. It's difficult to count Cisco out, but unless it can make a compelling argument that California can compete on features, Cisco faces an uphill battle in the server market. Cisco's strength in networking, combined with technologies from VMware and Red Hat, would make this much more than a me-too product launch.

2 of 2
Comment  | 
Print  | 
More Insights
Newest First  |  Oldest First  |  Threaded View
How Enterprises Are Attacking the IT Security Enterprise
How Enterprises Are Attacking the IT Security Enterprise
To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Register for InformationWeek Newsletters
White Papers
Current Issue
2017 State of the Cloud Report
As the use of public cloud becomes a given, IT leaders must navigate the transition and advocate for management tools or architectures that allow them to realize the benefits they seek. Download this report to explore the issues and how to best leverage the cloud moving forward.
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on for the week of November 6, 2016. We'll be talking with the editors and correspondents who brought you the top stories of the week to get the "story behind the story."
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.
Flash Poll