Best known as a networking vendor, Cisco is taking on IBM and HP with its Unified Computing System
Company: Cisco Systems
Headquarters: San Jose, Calif.
2011 Revenue: $43.2 billion
CEO: John Chambers
What They Do: Cisco is the largest vendor of networking equipment for enterprises and service providers. It has also branched out into other areas, including servers, video and collaboration.
Since its introduction in 2009, Cisco Systems' Unified Computing System (UCS) has become the driving force behind the company's data-center strategy and, by some measures, has grabbed third place in the worldwide blade-server market. That's a remarkable record for the first foray into computing by a company that's synonymous with networking.
UCS combines servers, virtualization, networking and management software into a single package. Cisco now claims 11,000 customers and $1.3 billion in annual revenue for UCS, but it's not standing still. In March, along with introducing a new generation of blades based on Intel's Xeon E5-2600 processors, the company expanded its lineup of rack-mounted servers and doubled the switching capacity of the fabric interconnect that links UCS servers. In the second half of the year, Cisco plans to make its UCS Manager software control multiple UCS domains--up to tens of thousands of servers in an organization.
Though UCS has grabbed about 14% of global blade-server sales, most servers are larger rack-mounted units, so Cisco only has about 4% of the whole market, according to Gartner analyst Andrew Butler. On the other end, blades are starting to get squeezed by the popularity of "skinless" servers, which are simpler and less expensive than a blade, and which Cisco doesn't yet make.
Moreover, in many IT shops, established players such as Hewlett-Packard and IBM are too deeply entrenched for Cisco to break in, Butler says. "Unless something bizarre happens, Cisco's future growth does start to become constrained," he says.
The company's server strategy is aimed at making the whole of its architecture more valuable than its pieces. This helps the company set itself apart and avoid competing with commodity products based on price, says David Yen, senior vice president and general manager of the company's data center group. Skinless servers are on Cisco's road map, but only in the long term. As for rack-mounted systems, Cisco wants to make them as economical and easy to manage as blade servers, Yen says.
As Cisco moves into the data center, it's going down a different path from some of the bellwethers of large-scale computing. UCS servers are designed to fit into modules that can be combined to form a very large data center. Through fabric interconnects and overarching management software, Cisco can make those modules manageable with a single set of policies, Yen says. Cisco's approach is different from that used by public-cloud giants such as Google and Amazon, which expand a single-layer architecture to a massive scale. But for most enterprises, Cisco's approach is better for manageability and incremental growth, Yen says.
Cisco's aggressive approach to the market helped to sell one CIO on UCS as a long-term bet. "They pointed at the big guys and said, 'We're coming at you,'" says George Reed, CIO at travel insurance company Seven Corners. UCS blades replaced a data center full of desktop servers at Seven Corners, where they've helped the company calculate the risk of new types of insurance policies more quickly, Reed says. And he says Cisco's support is either better or cheaper than support from the other big server makers.
This story, "Cisco aggressively branches out into the data center" was originally published by CIO.