Cisco aggressively branches out into the data center

By , CIO |  Data Center, Cisco

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.

Employees: 63,870

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.

The Pitch

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.

The Catch

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.

The Score


Originally published on CIO |  Click here to read the original story.
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