Global CIO: IBM Turns Guns On Cisco With Acquisition Of Blade Network - InformationWeek

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10:44 PM
Bob Evans
Bob Evans

Global CIO: IBM Turns Guns On Cisco With Acquisition Of Blade Network

IBM adds Blade Network's innovative technologies and in-Cisco's-face competitiveness to IBM's expanding ambitions in networking and the data center.

  • In January 2009, when Cisco was about to introduce a blade server, Mehta wrote on his blog, "What Cisco is not talking about is that their approach to virtualization is only virtual to the extent that the data center must go 100% Cisco, all the way from network to server and virtual switch. And that means that customers can expect to pay a significant if not outlandish premium for the privilege to run a pure-Cisco environment. . . . Cisco's machinations boil down to issues of trust and value—and at what price? . . . . Cisco may be on its way to discovering that it's foolhardy to undermine the strengths of HP and IBM – companies that have tremendous relationships with data center customers, companies that have spent decades building strong relationships with CXOs who are concerned with controlling cost of ownership, reducing carbon footprint, and particularly in today’s economy, trying to do more with less. I do not expect these customers to rip out their HP and IBM servers to enable Cisco to make its 70% gross margins."

  • In an April 2010 blog post, Mehta hit once more on one of his primary theme—Cisco's proprietary requirements: "At a time when Cisco is embarking on major product line transitions that require customers to buy into a single-vendor rip-and-replace approach, our products allow customers to overcome their problems without taking away their freedom-of-choice when it comes to servers, storage, hypervisors and network equipment."

    Now, we all like underdogs, so in some ways it was appealing to watch Mehta and his fast-growing but relatively small and privately held company take on one of the world's best-known and most-powerful IT brands. But if all that Mehta and Blade Network had to offer were a feisty attitude and some provocative commentary, Cisco and others would have shredded them years ago.

    IBM clearly sees significant value in the Blade approach, and in particular the contributions Blade's products and technologies can make in IBM's rapidly expanding move into "workload-optimized systems." Here's a key section on IBM's rationale for acquiring Blade (from the IBM press release):

    "This year, IBM introduced a full line-up of new, workload-optimized systems that incorporate innovation at each level—from microprocessors and firmware software to middleware and hardware. With Blade, IBM can drive innovation at the systems networking level to enable clients to speed the delivery of key information from system to system—for workloads such as analytics and cloud computing—while also reducing data center costs.

    "Emerging business models from smart grids to smart traffic systems are infusing intelligence into everyday processes, generating a torrent of information. Business decisions require rapid access to that information. Blade's proven, industry-tested switches and software are designed to improve systems performance for faster delivery of information, optimize virtual environments and lower energy use.

    "Over the past 18 months, IBM has expanded its core networking business through relationships with leading networking companies. IBM plans to continue providing clients a choice in core networking solutions through these important, ongoing relationships while using Blade's industry standard-based system networking technology to create systems that are efficient, easy to manage and simple to deploy." (End of excerpt.)

    But there's no denying that Mehta's penchant for calling out Cisco at every opportunity helped him build credibility for his company as a feisty and better alternative to a huge global company that doesn't always enjoy the best reputation for flexibility in dealing with customers. And perhaps Mehta's best example of that type of positioning was his blog post from 18 months ago called 10 Reasons Why Cisco's UC [Unified Computing] Will Get Pushback From Customers—and as you read these, just imagine that the guy making these bold statements now has the resources of the IBM Corporation behind him:

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