Can Cisco Eat their EMC and Have Their NetApp To?

With 2010 nearing a close, could Cisco be contemplating another major acquisition to complete their next generation datacenter portfolio?  The last glaring hole within Cisco’s portfolio is their reliance on outside vendors for storage solutions.

Over the past few months, Cisco has patiently watched as HP purchased 3Par, EMC purchased Isilon, and Dell is acquiring Compellent.  Meanwhile, EMC’s arch nemesis NetApp continues to grow and innovate in a tough economy.

Further complicating matters, is Cisco’s reliance on the VCE, a partnership between VMware, Cisco, EMC, and Intel.  It is no coincidence that the current Vblock VCE Reference Architectures specifies EMC storage offerings (CLARiiON, Symmetrix, and Celerra).

Not to be left out of the party, NetApp entered into  ‘collaboration’ with Cisco and VMware creating FlexPod that delivers ‘leading computing, networking, storage, and infrastructure software components’.  It seems that Cisco isn’t the only one hedging their bets as VMware exerts a rebellious streak against their parent (EMC).

Cisco’s future hinges around UCS being adopted as a true next generation computing platform without legacy baggage.  Cisco did not go to war with HP while potentially jeopardizing their relationship with IBM only to be saddled with the competing interests of three large companies.

In the past, I have speculated that Cisco should simply purchase EMC thereby owing a majority stake in VMware.  However is NetApp a better choice?  After all, does VMware need to maintain a ‘Microsoft’ level of independence from the server vendors?  Would HP, IBM, Dell, etc. be inclined to sell a product that lines the pocket of Cisco?

Only Chambers (ok perhaps Ellison as well) would be as bold to acquire an enemy of one of their strategic partners.  By acquiring NetApp, Cisco would be able to offer innovative solutions such as storage blades for UCS or even accelerate the adoption of FCoE.  Imagine a new Cisco Architecture with Cisco UCS, Cisco Nexus, Cisco MDS, Cisco FlexPod, and Cisco Management with the availability of VMware, Citrix, Red Hat, or Microsoft virtualization.

In the end, Cisco could offer a true end-to-end solution as they continue to lead within the edge and core routing markets with near dominance in the switching market.  Furthermore, Cisco would stand alone as the only integrated next generation data center provider that does not develop or sell enterprise class applications such as SAP, Oracle, Microsoft, etc.  In effect, they become the Switzerland of computing against their rivals.

The only question is how long will Cisco be able to ‘Eat their EMC and have their NetApp to’? Don’t look now, but perhaps Larry (Oracle) will crash this party and make the decision for then.

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Oracle Takes Dead Aim At VMware’s Vision

Still wondering why Oracle purchased Sun?  Day One of Oracle’s OpenWorld 2010 cleared up at least one reason; Oracle has its own “stack” and it does not include VMware. 

When Sun was originally purchased by Oracle, my attention immediately fell to Sun’s virtualization assets and engineering talents.  Before the acquisition, Sun was amassing an arsenal of virtualization and management assets including xVM, VirtualBox, and Solaris.  If you factor in hardware development and JAVA, then Sun had everything they needed to “change the world.”  That is, everything except a track record for translating engineering into revenue.

Love him or hate him, Larry Ellison has no such issues.  His track record speaks for itself as Oracle has an uncanny ability to execute.  With the launch of Exalogic Elastic Compute Cloud, Oracle has signaled to the market that they are ready for a fight.  While most believe Oracle is gunning for Amazon Web Services, I believe hidden in their messages and jabs at IBM is their true target of public, private, and hybrid clouds ala VMware.

VMware unleashed their vision of the future at VMworld 2010 that included vSphere, vDirector, vCloud, vFabric, SpringSource, and more.  What’s missing?   Oracle would point to VMware’s ratio of vision to products, their lack of owning an operating system, and their dependency on third parties to deliver server power (I’ll give them storage as EMC is VMware’s parent company).  Oracle’s vision is unique in that they control the entire Cloud stack using proven technologies and deployments; unleashing the potential of Sun hardware, JAVA, and Fusion.

Exalogic Elastic Compute Cloud has a few things going for it:

  • Power – Scale Out and Scale In  
    Cores 96 to 2880, SSD 256GB to 7.7TB, RAM 768GB to 22.4TB, and SAS disk 40TB to 320TB
  •  Applications – JAVA and Fusion
     Oracle’s Applications as well as others that run on Oracle Solaris and Oracle Linux

Although, I’m not thrilled with Oracle’s reliance on InfiniBand, it makes sense given Sun’s product portfolio and expertise.  Also, we need to learn more about how you manage this system including orchestration via business process management solutions.  However, this is a great start for Oracle. 

One last thought, Oracle took a subtle jab at VMware, EMC, and Cisco when they proclaimed, “Run 1000s of existing applications” and “No Certification Required.”  Perhaps Ellison should not be picking a fight with Mr. Chambers at Cisco.  For the common denominator of vBlocks (VMware, xBlocks (Citrix), and rBlocks (Red Hat) is UCS and its momentum may be unstoppable.

VMware Two Years Later: A Microsoftian Transformation

It’s hard to believe, but two years ago I wrote a blog post railing against VMware’s assertion that the operating system was dead.  This was about the same time that the great VMware exodus occurred and VMware replaced Diane Greene with Paul Maritz an ex-Microsoft executive.

What do you do when you are backed into a corner?  You release an upgrade that breaks your install base.  You fire your CEO and begin to lose key personnel.   Hire a Microsoft Executive to become your new CEO because he’ll be out of a job soon.  Pick a fight with the largest software company on earth.  Awake the sleeping giants in IBM, Sun, HP, and more as they want their slice of the pie.  Finally, you bring your most loyal customers to VMworld and proclaim that you are still the king.

Looking back, I failed to understand the transformation that VMware was about to begin.  As a technologist, it’s hard to accept that great technology does not equate to great profits.  VMware’s leadership understood this and set down a path to become the new Microsoft.  I write this with the highest respect and admiration as few software companies in the world have achieved the growth rates, sustainability, profits, and broad market presence as Microsoft.

Today, VMware is a marketing driven technology company.  Look no further than VMworld 2010 as an example of this transformation.  While there were labs and hard-core technology sessions, the message was always on-point and precise, Virtual Roads. Actual Clouds.  While cultivating a legion of developers and partners, VMware repeated that “if you want it cheaper, faster, better” then you’d buy it from them.

While I do not always agree with VMware’s vision of the future, it would be foolish to dismiss their plans and underestimate their marketing efforts.  VMware’s plans fall heavily on “The New Infrastructure”; it looks and feels a lot like the old Microsoft as “The New Infrastructure” is made up of VMware’s lucrative products and powerful partners like EMC, Cisco, Google, and Salesforce.

Give credit where credit is due, Maritz and VMware have done a masterful job in transforming the company while painting an obtainable vision of the future.   In order to make the transformation complete, VMware must cultivate one final group, the application vendors. For once the “old guard” embraces the “new cloud” paradigm, the world will forever change and the provider of this technology is going to be worth billions and billions of dollars.

Quick Alert: EMC Scores With Greenplum; Can Cisco UCS Be Far Behind?

EMC is acquiring privately held Greenplum for an undisclosed sum.  Greenplum is a next generation warehousing database that offers massively parallel processing (MPP) and Scatter/Gather Streaming to provide analytics for private and public clouds.  Greenplum is an x86 based software solution that is challenging the likes of Oracle, Netezza, and Teradata. 

Interestingly enough, Oracle is an investor of Greenplum via their acquisition of Sun.  However, Oracle’s Exadata solution that is built on Sun hardware made Greenplum an expendable investment.  Meanwhile, EMC saw the opportunity to gain a foothold into this growing billion dollar market while continuing to fuel their storage business; huge databases equal huge storage requirements.

In the end, EMC has acquired a solid company that has held their own against their larger rivals.  With EMC’s ability to execute with a tenacious sales force, market presence, and stable financials coupled with new investments in the technology, Greenplum is sure to flourish.  Additionally, could a Cisco UCS appliance be far behind?

Think about it, traditionally data warehouses sit in their own silo within the data center.  One may argue this is because of the proprietary nature of these important systems, but this is slowly changing.   In Greenplum’s case they support Linux and Sun Solaris running on hardware from Dell, HP, Sun, and IBM.  Imagine EMC, in conjunction with VMware, fine tuning Greenplum’s software to work within Cisco’s UCS.  Instantly, you have a next generation data warehouse within a next generation data center architecture that gains all the benefits from Cisco’s UCS.

For the Datacenter, Forget E=MC^2, Sav= (MC^4+AV) Sec

Why do we need Cisco UCS, HP Adaptive Infrastructure, IBM Stratus, Liquid Computing, and more? 

Savings
equals…

Management
Management is a critical component of any datacenter.  A datacenter may be defined as a symphony of hardware and software spanning multiple disciplines that is expected to be “always-on” and never to fail.  If you couple this with advances in virtualization, the “green movement”, and the need to understand a complete Total Cost of Ownership (TCO) of datacenter operations, then management is the only answer.  Management is not intended to replace the human element, rather to augment it through automation that allows human beings to tame an ever complex environment.

Examples of this renewed interest in management are plentiful; HP buys Opsware and Mercury Interactive, BMC buys BladeLogic, Cisco partners with BMC, Cisco UCS Manager, EMC buys Configuresoft, Voyence, SMARTS, and Infra, and more.

Current
Current, also known as power, usage within the datacenter continues to increase at a staggering rate.  In fact, the price for said current may actually outpace both the IT equipment and the facility itself.  It’s not simply servers, but routers, switches, wan acceleration devices, security devices, sans, nas, lights, laptops, monitors, and more that cause the bills to continually increase.  Couple this with the additional demands of cooling and redundancy and you have a real crisis on your hands.

An example of changes in the industry may be seen in ActivePower’s efforts in the areas of power and environmentally friendly “green” solutions.  Additionally, we might have been given a glimpse to one answer to this problem, as Google has made a $10 million investment in eSolar; inventors of Utility-Scale Solar Power.

Cabling
Cabling is an essential ingredient to any datacenter design and one that has the potential to provide significant cost savings in the next generation datacenter.  It started with the blade server revolution including embedded switches, and may very well end with Cisco’s UCS, HP’s Adaptive Infrastructure, or IBM’s Stratus datacenter initiatives. 

Illustrating this point, Cisco has published a case study with Saint Joseph Health System (SJHS) in which the hospital claimed an 85% savings in cabling costs by using the Cisco Nexus equipment.

Cooling
Current generates heat, heat requires cooling, cooling requires current, and around-and-around we go.  In the old days, you simply purchased the appropriate amount of cooling to keep your datacenter at a cool and constant temperature.  Today, upwards of 40% of your datacenter energy bill is from cooling.  Additionally, we have “green” concerns and use PUE (Power Usage Effectiveness) and DCE (Data Center Efficiencies) metrics to calculate how well we are doing and compare datacenters against others.  Incidentally, chillers, humidifiers, and CRAC’s (Computer Room Air Conditioning) contribute handsomely to these calculations.

A concept called adaptive cooling is a promising technology to solve the cooling challenge.  The premise is today’s equipment manufactures build systems that are more reliable and are designed to “handle the heat.”  Sensors are used to form baselines and models that are used to optimize modern cooling techniques.  Yahoo improved cooling and energy savings of 31% by partnering with SynapSense.

Capacity
Once thought to be endless, datacenters are rapidly running out of capacity.  By capacity, I am referring to everything from floor space to power and cooling to facilities themselves.  This has lead to the innovation of a “datacenter in a box” which is offered by the likes of Sun, Rackable, HP, IBM, and more.  These containers allow datacenters to expand rapidly while offering innovative power and cooling options.  However, space alone won’t solve the capacity issue.  Therefore, the efforts by Cisco, IBM, HP, and others to create a new datacenter fabric that combines massively dense servers, storage, networking, security, and virtualization are so important.

Look no further than Facebook who has started construction on a custom datacenter with over 140,000 square foot capacity at a cost of $188 million.  Note that they are touting the efficiency of this new datacenter including the potential of power and cooling cost savings.

Agility
As Ronald Reagan famously said, “Mr. Gorbachev, tear down this wall!” so too can we proclaim the tearing down of the walls between the silos within the datacenter.  We no longer can allow storage, networking, servers, security, applications, facilities, and more to operate independently of each other.  By operating as a unified team, the datacenter becomes more agile, proactive, efficient, and better equipped to handle all challenges. 

Examples of this movement is detected within software vendors (BMC, HP) unifying the management of these disciplines and hardware (Cisco, Juniper, Brocade) vendors integrating the functions into a single chassis.

Virtualization
No equation of savings within the datacenter would be complete without discussing virtualization.  While the ideas of virtualization have been around for years, it’s the application of this technology that has changed the industry forever.  Advances in network, server, application, and storage virtualization impact cost savings across the equation.

Examples include VMware vSphere, Citrix XenServer, Sun xVM, Cisco UCS (Nexus 1000v), Arcadia (Cisco/EMC JV)

Security
Security has and will continue to be a major concern within the datacenter.  The number of attacks and sophistication of these attacks continues to rise.  With the advent of Cloud Computing or shared services running on a common platform, the potential risks of a security breach are enormous.  Additionally, security must span all the disciplines within the data center while taking into account user access/privileges, data (in-motion and at-rest), and more.  Finally, security must continue to evolve while adhering to compliance and regulatory pressures.

Recent activities in this area include Cisco acquiring Rohati, SAIC purchasing CloudShield, the growth of Tufin and AlgoSec, and next generation firewall providers such as Palo Alto Networks.

VMware: Wrong, Wrong, Wrong

VMware has once again proclaimed that the Operating System is dead.  Translation; Microsoft is dead.  However, in the same speech they proclaim that their New/Old VDC OS could become the operating system of the future (if they choose) but that’s not their stated direction.  Translation; Just in case Microsoft pounds us into the ground we have a plan B.

Proclaiming the OS is dead is akin to saying the Mainframe is dead.  Tell that to IBM, they are laughing all the way to the bank.  Interestingly enough, the Mainframe may be the sleeping giant to crash the x86 VM party.  A Virtual Data Center, Cloud Computing, or whatever you want to call it is simply taking commodity hardware and turning into what?  Anyone…Anyone…Anyone, a Mainframe.  Mainframes already have superior memory, CPU, management, and with zVM, virtualization capabilities.

VMware’s idea of an OS for the data center is not new.  Bill Coleman, CEO of Cassatt and the “B” in BEA has been talking about this very subject for years.  His thoughts and ideas may be ahead of their time, but time is quickly catching up to his thinking.  Computing power can not continue to be silo’d or restricted to one form of technology ala VMware VDC-OS.  Have you ever heard of Cassatt, Scalent, eGenera, and more.  Do you think Citrix, Oracle, HP, IBM, and Sun would accept a VMware only world?  I left out Microsoft because VMware believes the OS is dead.  Huh?

What do you do when you are backed into a corner?  You release an upgrade that breaks your install base.  You fire your CEO and begin to lose key personnel.   Hire a Microsoft Executive to become your new CEO because he’ll be out of a job soon.  Pick a fight with the largest software company on earth.  Awake the sleeping giants in IBM, Sun, HP, and more as they want their slice of the pie.  Finally, you bring your most loyal customers to VMworld and proclaim that you are still the king.

Strap on your helmets, take your Dramamine, and fasten your seatbelts because VMware is in for a bumpy ride.  Oh wait, isn’t Google working on this too?

VMware: Leadership and a Changing Market

Let the announcement of the firing of Diane Green, VMware’s founder and CEO, serve as a warning to all companies large and small; adapt or die. Unfortunately, this is lesson that we have seen before with the likes of Kodak, Xerox, Netscape, AOL, Palm, Inktomi, Motorola, and more. However, VMware’s situation is unique as they may not only topple themselves but potentially could ruin another technology giant in EMC.

Whether you are a leader, follower, innovator, or disrupter, a company’s focus must remain on their customers, vision, and the market at large. Too often companies become enamored with their own technology, success, wealth, analyst reports, articles, speeches, etc. and lose focus, execution, desire, hunger, and more. While the highs are incredible, the lows determine the winners from the one-hit-wonders.

VMware did not pioneer virtualization technology, that honor belongs to IBM, but they were one of the first to recognize and develop it’s application within the x86 world of Intel and AMD. One can only surmise that VMware has poured thousand of development hours to perfect their vaunted hypervisor. The end-result is an enterprise class application that is well designed, stable, and widely deployed.

Energized with their acquisition by EMC, VMware continued perfecting their hypervisor, improving their server and workstation products, and watched their sales soar. Blinded by their success and market dominance, VMware lost sight of the market pulse while EMC hit the jackpot with their IPO spin-off. In the meantime the market began to shift as enterprises realized that the virtualization value proposition of server consolidation actually created new challenges of security, virtual machine sprawl, and management worries. Virtualization had an impact on the consolidation of servers, but overall sever sales and capacity continued to grow.

When the dust had settled, VMware awoke to a host of competitors on multiple fronts including; the hypervisor, management, desktop virtualization, P2V, Policy and Security, Virtual Desktops, and more. From IBM, Citrix, Sun, HP, and BMC to Parallels, Quaramet Qemu, Embotics, Veeam, Scalent, Cassatt, and more, VMware is under attack with no where to hide. To make matters worse, VMware awoke the sleeping giant in Microsoft and must now contend with a competitor with seemingly unlimited money, talent, R&D, and marketing power.

Faced with mounting competition, the rapid commoditization of the hypervisor, downward pricing pressure, and unrealistic expectations of both EMC and Wall Street, someone had to take the fall. To add insult to injury, Diane Green was replaced by ex-Microsoft executive Paul Maritz. The emperor has no clothes, the enemy has entered the building, and it is clear that EMC is firmly in charge of their public subsidiary.

VMware is to virtualization as Xerox is to copiers. Whether they can remain relevant is now in the hands of Mr. Maritz, EMC, and the rest of VMware’s leadership team. Will VMware disappear like Inktomi or Netscape, or will they re-invent themselves like BlueCoat or GE? Will other companies learn from their mistakes? Or, is history doomed to repeat itself?

Power, money, hyper-growth, or a fancy new HQ campus, does not guarantee success. Only innovation, humility, partnerships, people, strategy, vision, and a mindful eye on the market will create a lasting entity. In the end, it all comes down to leadership. The evidence is clear; Buffett, Gates, Coffin, Welch, Walton, Merck, Packard, and more inspired, served, and led their organizations to greatness. Be mindful of history, learn from the mistakes of others, and never be satisfied, innovate, and lead.

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