Cisco Wants to Be a Utility Player

The new data center strategy from Cisco Systems Inc. (Nasdaq: CSCO) is thin on new products, but there's a utility computing piece lurking inside all the marketing spiel.

As part of the somewhat loosely-defined and very markety sounding "Business Ready Data Center" strategy that was launched today, Cisco unveiled some new data-center-specific services, design and deployment guides, and a raft of "key partners" (that it was already working with, anyway). (See Cisco Unveils Data Center Initiative.)

But work through the jargon and you come to the most significant part of the announcement, which involves IBM Corp. (NYSE: IBM)and Hewlett-Packard Co. (NYSE: HPQ), two of the main vendors in the utility computing space.

So what? Well, networking is currently the missing piece in the utility computing jigsaw. Lucinda Borovick, program director of data center networks at IDC believes that Cisco's involvment in utility computing projects could give the effort some momentum.

It spells good news for users, particularly in the IT department," she says. "They are going to be asked to adopt utility computing, and they really don’t know who to look to on the network side to make that happen. It will open the door to more utility computing."Utility, or on-demand, computing aims to ensure that users pay only for the computing resources they use, removing the expense of paying for redundant data center hardware that is only used on an occasional basis.

Cisco’s says its networking products will be even more closely inter-linked with IBM’s on-demand and HP’s utility computing offerings. For example, there will now be further integration of Cisco’s MDS storage networking products with HP’s Utility Data Center.

Although this should help fill the networking void in utility computing, Borovick warns that moving to a utility model can be a slow process for users. However, she believes that Cisco’s involvement is a positive move: “We now know that a network player is stepping in to help that process.”

However, IBM and HP are not the only companies that Cisco is snuggling up to in the data center space. Others include Intel Corp. (Nasdaq: INTC), Electronic Data Systems Corp. (EDS), and Microsoft Corp. (Nasdaq: MSFT).

By launching the initiative, Cisco is hoping to corner the growing market for data center networking, which is forecast to reach $7 billion by 2007, according to analyst firm IDC.The move is also a significant one in terms of where Cisco is planning to position itself in the market. Borovick says, “I think this is a critical step for Cisco.”

— James Rogers, Site Editor, Next-gen Data Center Forum