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HP, Cisco ramp up volume on data center convergence

Hewlett-Packard CEO Mark Hurd says that the company will marshal supply chain strength to beat competitors on price and quality in converged data center hardware.

LAS VEGAS -- IT pros sick of the 'converged data center' hardware shtick from Hewlett-Packard and Cisco Systems had better get used to it. It's only going to get worse.

For one thing, Hewlett-Packard Co. CEO Mark Hurd has a bee in his bonnet on the topic, so the world will continue to hear more over the next few months about HP's (and, doubtless, Cisco Systems Inc.'s) converged data center infrastructure story.

For more on converged data center infrastructure:
HP data center push targets Cisco

Converging hardware consolidates IT purchase power

HP vs. Cisco data center hardware battle heats up

HP will wield its enormous buying power to get the best components for the least cost for all that data center hardware, Hurd told a thousand value-added resellers (VARs) and integrators at the HP Americas Partner Conference.

"We are a $70 billion supply chain. We want the lowest price, best quality, best availability. Price [alone] is not good enough," Hurd said.

In his view, existing server, storage, networking silos will converge in the same box -- using the same enclosures, cabling, chips and other components. "That's why strategically it's so important for us to have [intellectual property across technologies]. The PC is incredibly strategic because it changes our supply chain picture."

Converged data center more than rhetoric?
HP's huge server and PC businesses, which carry lower margins than storage and networking gear, will nonetheless ensure that HP's storage and networking groups get the best possible parts, Hurd maintained. He clearly sees that as an advantage over unnamed competitors in the storage and networking arena.

['Converged data center infrastructure] smacks of a return to the mainframe, and I'm not sure who wants that.
A Northwest-based data center expert,

Glen Jodoin, the president of GreenPages Technology Solutions, a Kittery, Maine-based technology consultancy, has heard Hurd's spiel before but said it doesn't require much of an update because it's "very compelling."

Another HP VAR that also sells Cisco networking said he would like to hear Cisco CEO John Chambers' response. During the keynote, while Hurd didn't bandy Cisco's name about, it was clear which company he has targeted.

He also predicted that the fat margins in storage and networking hardware (48% and 80%, respectively) will thin out just as server margins have and that the companies that have lived off those margins exclusively will feel the pain.

Just as server margins have fallen -- he put them at 34% now -- with the advent of industry standard components, "the same thing will happen in storage and networking. It's a fait accompli."

One HP and Cisco VAR who declined to be named said it's clear to him that Cisco is already pressed by component sourcing problems in its low- and mid ange security appliances.

HP lagging in data center design and consulting?
Another Northwest-based data center expert said that HP's data center story looks good on paper, but the company has not done enough to promote the data center design and consulting capabilities it acquired a few years ago with EYP Mission Critical Facilities. "I should be seeing HP/EYP in a lot of my calls, but I never do. I wonder if they're having trouble integrating it."

On the other hand, Cisco, which has been beating the drum for converged IT/facilities management for a long time, has been very active with Richard Zeta Building Intelligence, a company it acquired last year, he said.

Many customers are ready to consider melding IT management with facilities management, he said.

"We'll see how this shakes out especially with other infrastructure plays coming out. We are seeing some new HVAC [heating, ventilation and air-conditioning] technology with better IT integration 'out the door' and a continuing push for Ethernet over legacy technologies for facility equipment. Some vendors get it -- plenty of them do not. They are used to selling to facility managers, and now with "convergence" being a key theme, IT has a seat at the table and is asking better questions around the technology," he wrote via email.

Still, there is some resistance to the notion of a one-vendor data center. One longtime Cisco and HP partner from the mid-Atlantic area remarked: "This smacks of a return to the mainframe, and I'm not sure who wants that."

Jodoin said it's far from clear which of these two power vendors and partner sets will win or lose. "We'll just have to see where everything lands."

Barbara Darrow is the Senior News Director for Writer to her at

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