IT pros say Hewlett-Packard Co.'s surprise decision to buy networking company 3Com continues vendor consolidation in the IT industry, a pattern that analysts and IT pros say has positives and negatives.
"I suppose there are a couple ways to look at mergers like these," said Clive Greenall, IT facilities manager at the Standard Bank of South Africa. "The companies are consolidating skills under one roof, which may be a good thing if you're looking for a one-stop solution, and presumably they'll keep the best skills from the consolidation.
"The other side of the coin could be price fixing as a result of less competition, certain arrogance toward servicing client bases -- take it or leave it -- and job losses as the duplication of skills and responsibilities is addressed," he added.Pushing toward converged data center hardware
Illuminata Inc. analyst Gordon Haff said end users have been clamoring to get away from "the erector set approach" to IT: that is, buying servers, networks and storage separately, configuring them the best they can, and hoping they all play nice with one another. On the flipside, there is concern about vendor lock-in.
HP's $2.7 billion bid for 3Com move was in part driven by Cisco's aggressive push into the data center where the two companies compete more and more directly with their respective sets of converged hardware that combine servers, networking hardware and storage in one box.
"Every vendor has their strong points, and just because a systems vendor makes its own brand-name storage or networking gear doesn't mean you'll be getting the best quality," said Charles King, analyst at Pund-IT Inc. "Businesses need to be careful with this idea of working with an integrated systems vendor."
IT vendor convergence has been the name of the game over the past year. HP bought IT services giant EDS last year and now plans to add 3Com. Oracle is still working on its $7.4 billion acquisition of Sun Microsystems.
Cisco recently rolled out its Unified Computing System (UCS), with HP responding with BladeSystem Matrix. And just last week, Cisco, EMC and VMware announced a partnership to offer their take of converged infrastructure under architecture called vBlock.Integration upside offset by fear of vendor lockin
"The pendulum is swinging back toward a bigger and more vertically integrated set of vendors," Haff said. "What the individual combinations look like varies a bit, of course."
Earlier this year, when Cisco rolled out its UCS, some IT pros expressed worry about overreliance on a single vendor.
"To be completely honest, when I first heard about that system, all I could think of is vendor lock-in," said Kyle Rankin, a systems architect at QuinStreet, a Foster City, Calif.-based marketing company.
Rankin added that "it's going to be a tough sell for a lot of people who have large-scale server footprints already."
King said it's not unusual to go into a data center and see racks of different vendors' equipment sitting right next to one another. Oftentimes IT pros will just buy what they need, when they need it, and what's on sale.
"This idea of a single overarching vendor that clients will dedicate themselves [to] can be an anomaly," he said.
Still, Haff said that concerns about vendor lock-in today are nothing compared with 20 years ago.
"The fact that HP can offer you converged infrastructure doesn't keep you from buying a ProLiant server, using Cisco networking gear and EMC storage, and running Microsoft Windows on the ProLiant," he said.
"If you go back 20 years, uh uh. If you were going to buy a computer system from Digital Equipment, you most likely had to buy a bunch of other things from Digital Equipment. Even if you accept the notion that we're moving back toward a more vertical company structure today, the fact is you still have the capability to mix and match if that is your choice."
Mark Fontecchio can be reached at mailto:email@example.com.