Mobile
News
12/18/2008
07:11 PM
Connect Directly
Twitter
RSS
E-Mail
50%
50%

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.

Previous
2 of 2
Next
Comment  | 
Print  | 
More Insights
InformationWeek Elite 100
InformationWeek Elite 100
Our data shows these innovators using digital technology in two key areas: providing better products and cutting costs. Almost half of them expect to introduce a new IT-led product this year, and 46% are using technology to make business processes more efficient.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest, Dec. 9, 2014
Apps will make or break the tablet as a work device, but don't shortchange critical factors related to hardware, security, peripherals, and integration.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on InformationWeek.com for the week of December 14, 2014. Be here for the show and for the incredible Friday Afternoon Conversation that runs beside the program.
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.