Cisco's recent decision to enter the server market was seen as an attack against the company's server vendor partners such as Hewlett-Packard and IBM. Many in the IT community expected a backlash -- and the retaliation has arrived.
IBM returned fire this week by tightening its ties with Cisco Systems Inc.'s rival Brocade Communications Systems Inc.Cisco's UCS ignites server vendor war
IBM already sells some storage-related Brocade equipment but will now sell switches and routers made by Foundry Networks, which Brocade acquired in July 2008. Under the new agreement, IBM will re-brand and sell Brocade's IP networking family of products through IBM's global sales force and authorized IBM Business Partners.
Another Cisco competitor, Juniper Networks Inc., said on Tuesday that it has also extended its relationship with IBM, indicating that friction from Cisco's server hardware market foray may have opened doors for Cisco's networking competitors.
Earlier this month, HP shipped a blade-based computing system that will compete directly with Cisco's Unified Computing System (UCS) , which is due out later this quarter. HP's blade release is a major blow to Cisco, because now UCS must compete against a system based on well-established c-class blade servers that will be released months earlier.
These moves are hardly surprising: IT professionals and analysts alike expected partners such as IBM and HP to "punish" Cisco for overstepping. "This apparent ongoing shift to larger systems' companies that are more vertically integrated can't help but stress partnerships and force countermoves," said Illuminata Inc. analyst Gordon Haff. "Some degree of co-opetition will certainly continue, but it will be colder."When Cisco announced UCS, the networking giant said its entry into the server market was a typical co-opetition situation. After all, HP-owned ProCurve, a networking gear maker that competes with Cisco networking equipment. UCS: Promoting survival or self-destruction?
But clearly, server vendors don't view Cisco's attempt to capture server market revenue as innocent co-opetition, and some IT pros say Cisco may have done more harm than good by treading on partner turf.
David Reynolds, a systems manager t the Rhode Island Blood Center, questioned the wisdom of Cisco's decision.
"Why get into that market? You have enough revenue issues dealing with your core competency as it is. The Linksys addition was smart, because it helped [Cisco[ add the consumer market, but [it] stuck with the networking stuff. That I get. This? Nope," Reynolds said.
"You have to wonder," wrote a user on an Ars OpenForum IT community site in response to questions about Cisco's server move, "how much this is going to hurt Cisco with VARs [valued-added resellers] and OEMs [original equipment manufacturers] versus how much sales volume they will get from these systems. Of course, long term they may have seen it as the only avenue for significant growth."
Another IT pro wrote that Cisco's maneuver will be worth the trouble only if the company commits long term. Although Cisco "hasn't explicitly sold servers before, they do have a bunch of appliances that they probably sourced somewhere and still needed to support. So it's not an illogical step to go from selling a lot of software and some appliances to selling the hardware that runs below that too. The question is, if Cisco is in [the server market] for in long term, or just probing."
Let us know what you think about the story; email Bridget Botelho, News Writer.