Data Centers: Who's On First?

For the fourth installment in NETWORK COMPUTING's five-part examination of the changes transforming the data center, we start with the shot heard around the IT world, when in March 2009, network powerhouse Cisco announced that it was taking on its server/data center partners--HP, IBM and Sun (now Oracle)--with its Unified Computing System strategy, a.k.a. Project California. In a video supporting the March 16 announcement, John Chambers said, "It isn't just a new technology, it's an approach to virtualization and to the data center that is very unique in the industry."

Cisco's head also said at the time, "We focus on market transitions, not competitors," but it appears that the competitors took a different view, especially HP. As a war of words escalated, Cisco's Keith Goodwin eventually said, "The relationship [with HP] has evolved from partner to companies with different and conflicting visions of how to deliver value to our customers." In November 2009, HP fired back at Cisco with the announcement of its Converged Infrastructure Architecture.

Network Computing Special Report: How Cisco Is Changing The Datacenter
Part 1 - Throwing Bandwidth At Your Network Problems Isn't Enough
Part 2 - Cisco Faces Uphill Battle Selling Data Center Servers
Part 3 - Lots of Changes, But Top Storage Vendor Lineup To Remain Intact
Part 5 - Data-Center Diversity Drives IT Agendas

For its most recent quarter, Dell Enterprise Solutions and Services revenue grew 7% to $4.6 billion, driven by strong performance in servers and networking, which grew at 16%. For the entire fiscal year, this segment soared 27% to $17.6 billion. Moving forward, the data center will be one of the three areas the company will focus on.

A month ago, IBM introduced new software to create virtual server images in minutes and to automate the management of virtual environments and hybrid cloud systems. At the end of 2010, Big Blue's hardware arm, Systems and Technology Group (STG), outlined its strategies, which included competitive take-outs. IBM claims a measure of success against HP, Oracle/Sun and others.

In December, Oracle introduced a new line of SPARC-powered servers that, when assembled into a server cluster, deliver transaction processing speeds three times faster than IBM systems and more than 7 times faster than HP systems. The combination of operating system, software, processor, server and other components provides a highly optimized system, according to Oracle, engineering core technology like SPARC and Solaris and doing it with an understanding of the entire environment.Meanwhile, in September 2010, Cisco revamped its data center go-to-market strategy from Data Center 3.0, which was focused on data center technologies, to Data Center Business Advantage. And a few weeks ago it announced updates to this strategy, including additions to the Nexus line of switches, the Unified Computing System and NX-OS.

Trying to understand what any one of these vendors is doing in totality would be a daunting task, says analyst David Hill, principal, Mesabi Group LLC. A simpler way is to exclude key software--including OSes, middleware and applications--and focus on the three key hardware components of a data center: servers, storage and networking. "Cisco is strong in networking and has nascent server capabilities, but uses VCE to acquire key storage capabilities in partnership with EMC and key server [that is, server virtualization] capabilities through VMware. HP has server and storage strengths, but has to show that its acquisition of 3Com can help it master networking. IBM has server and storage strength, but has to partner on the networking side. Oracle [through Sun] has both a server and storage background, but faces challenges with both and is not a networking company."

IBM is the most experienced player overall, and has the broadest array of products and platforms, says Charles King, principal analyst, Pund-IT Research. "That said, the company's multiarchitecture server strategy and related workload-optimized systems efforts seem a bit old school, especially when it gets on its mainframe hobbyhorse. Since IBM partners for most all its networking solutions, its approach is significantly different than Cisco's."

HP has a sizable product portfolio and ever larger ambitions, and its purchase of 3Com was clearly intended as a shot across Cisco's bow, says King. "But the company's software strategy and assets are nowhere, leaving it in a real quandary so far as competing against software heavyweights like Oracle and IBM."

King says Oracle's in a weird state, trying very hard (via the Sun deal) to portray itself as a data center leader and doing pretty well in niche markets (like Exadata). However, he adds, Oracle is apparently still bleeding customers like the IT equivalent of the Romanovs. On the tech asset side, the company is in pretty good shape with servers, but Sun's storage assets were the weakest part of the deal. "Like IBM, Oracle partners for most networking, but Ellison's seeming obsession with integrated stacks means a networking acquisition might be in the works."Like IBM, Dell has done a great job leveraging partnerships for products and services it doesn't own outright, he says. "Dell's laser focus on x86 means that it's standing at the center of the fastest-growing sector of the server and virtualization markets. Plus, it's probably got the strongest overall storage portfolio, via its own platforms and its partnership with EMC,  of any company in this group." Dell has also been more clearly focused on (and has derived more significant benefits from) cloud than many others, but despite these points and its increasing emphasis on the data center, Dell continues to be pigeonholed as a price-focused box vendor, says King.

Which brings King to Cisco as an interesting example of how a company can (and should) try to push out of its traditional markets and comfort zones. "The increasing verticalization of products from Oracle, and HP's outright slap [in the form of the 3COM deal] mean that staying put wasn't going to work for Cisco. While its Data Center Business Advantage strategy hasn't gotten as much traction as the company hoped, the results of its work with partners [particularly EMC, VMware and Intel in VCE] are among the industry's most intriguing and innovative."

The general trend in the industry is one of consolidation, where CIOs are looking to reduce the touch points by making strategic bets on the vendors that they will work with, says Stuart Miniman, senior analyst, The Wikibon Project. "That being said, IBM is led by services and partners with Juniper and Cisco for core switching. HP also has a strong services group, and while Converged Infrastructure is a business unit, the integration is of server, storage and edge networking, not core. Cisco has tight integration between server and network, and partners with EMC and NetApp for storage. Oracle tries to control the entire stack, optimizing solutions like Exadata and Exalogic for its database solutions."

Integrated solutions make the jobs of IT staff, system integrators and VARs easier, says Miniman. It is also not only a single throat to choke, but simplification of management that can make convergence compelling for customers. "There is some hesitancy from the workforce as to the impact on staffing, but C-level executives are open to moving from a siloed approach, where specialists turn knobs, to a streamlined environment where IT is focused on business value."

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