Only a select group of Cisco's VARs will see an immediate benefit from the company's long-awaited push into the data center server market, which was announced this week.
That's because for now Cisco is targeting the new server and its accompanying technology at a focused group of enterprise players and going to market through only a select group of VARs. Over time, as the technology trickles down from the very large enterprise into more of the market, the rest of the channel is expected to catch on. It's still unclear, however, how long that will take.
On Monday, Cisco CEO John Chambers, flanked by executives from Microsoft, Intel, EMC VMware and others, unveiled Cisco's Unified Computing System (UCS), a new data center technology strategy.
Despite the much anticipated server announcement, Chambers spent as little time as possible talking about the actual blade release -- the UCS B-Series Blade Server. Instead, he stressed that the blade would not be a standalone product but part of an overall UCS strategy.
That multi-pronged system includes computing, networking, virtualization, storage access and management software, as well as capability to integrate applications from all of the technology partners present at the press conference. Boiled down, the compute aspect is the blade, which is built on Intel Nehalem processors and includes extended memory to enable larger datasets and allow significantly more virtual machines per server than competitors offer.
The servers fit into the UCS Series Blade Server Chassis, which will hold up to eight blades and two fabric extenders. The servers then attach to a unified fabric in the network with 10 GigE switching that connects storage area networks (SANs), LANs and WANs, with fewer adapters, switches and cables.
The unified fabric changes the storage game because network managers can access storage over Ethernet, Fibre Channel, Fibre Channel over Ethernet, and iSCSI. And, ultimately, new management software provides visibility and provisioning across all of the servers and hundreds of virtual machines. Cisco says the UCS software can handle up to 320 physical servers and more than 1,000 virtual machines.
The selling point is that tightly integrated virtualization and networking fabric will lower both capital and operational expenditure for users.
The sheer number of servers and virtual machines enabled by the system makes it a clear option for service providers offering cloud computing services and for large enterprises handling extreme data loads and application delivery.
Though Cisco promises that the technology is accessible down-market, it remains unclear how many smaller companies would actually buy into such a large system.
"There doesn't need to be thousands of severs for this to be an economical play," said Jackie Ross, vice president of Cisco's server and virtualization business unit. "Those organizations that may be doing data-intensive processing applications [can benefit]."
UCS only for mega-partners?
For now, though, Cisco is aiming the technology at just 350 large enterprises with heavy virtualization need and is working with only very experienced VARs.
"We're working closely with 250 data center partners to help bring these solutions to life," said John Growdon, director of go-to-market for Cisco worldwide channels.
Growdon added that the majority of those partners already have computing and virtualization in their practices. Of those partners, only about 50 will be brought into Cisco's new Advanced Technology Partner (ATP) program for the UCS.
The presence of Accenture chairman and CEO William Green at the Cisco UCS press conference may suggest that Accenture is the type of very large integrator and consultant that Cisco expects to bring the technology to life in the market, at least initially, according to IDC analyst Janet Waxman. Cisco and Accenture recently formed a joint business unit that is probably aimed at taking on Hewlett-Packard, now that HP has acquired EDS.
"This is not a mass-market play," Waxman said. "It will be interesting to see if this unified computing gets traction and moves downstream. If it does, then it will bring with it additional channel opportunities." Whether that will happen depends on how quickly Cisco releases new iterations for the system, Waxman said. Cisco partner WorldWide Technology Inc., based in St. Louis, fits the grade of VAR that Cisco has invited to sell the new technology.
"Several years ago, we were very much focused on just the networking. Then we invested heavily in data center and virtualization as key focus areas," said Bob Olwig, vice president of business strategy for WorldWide. "I think it's going to take some VARs quite a while to [understand this technology]. This is very different [from] core routing and switching. It takes understanding the compute and virtualization aspects of the data center more than just the core networking. We feel fortunate we made investment several years ago."
Cisco partner Coleman Technologies, based in Orlando, Fla., has been invited to work with UCS. Ben Patz, CEO of Coleman, said Cisco had no choice other than to begin with "mature VARs."
"[The data center server industry] is a well-established market. Cisco's entry into this market is going to have to be with a very mature product even before the product is mature. So they have to go to market with well-established VARs," Patz said. "Once you go after enterprise customers with mature VARs, then strategically you can go after the market with a wider array of partners."
Some partners say that while this system may be too big for smaller users and VARs, there are other elements of Cisco's Data 3.0 strategy that will begin to get partners into the game.
"The initial release is targeted at enterprises and service providers; however, there are a number of elements of Data Center 3.0 that can be positioned in SMB clients, such as the VMware-optimized Nexus 1000V, which will ship later this year. This switch integrates the physical network into the virtual infrastructure, improving security and manageability," said Greg Bowden, group vice president for data center and storage solutions at Cisco partner Dimension Data.Spreading the wealth
Cisco does plan to train partners to bring them into the data center fold as demand increases, according to Growdon. Over time, Cisco will add two new individual certifications for data center architects and engineers. Becoming certified will help partners move toward eligibility for the new ATP.
"We will incorporate a broader set of channel partners into the overall mix here," Growdon said. "But they will have to have constituent parts, or they'll need to be trained."
Growdon also expects that some partners will gain these skill sets through acquisitions of other partners. "We've seen this occurring more lately," he said.
Changing the sales game
Meanwhile, as this technology makes its way into the mainstream, it is very likely that VARs will find themselves approaching entire IT organizations instead of just dealing with network managers. That's part of where the new skill sets are expected to play.
"In positioning this solution to a client, the integrator not only introduces new technology but must integrate the expertise of previously isolated teams," said Bowden. "That could be a challenge not just for the integrator but [for] the enterprise, [which] often has completely different teams for networking, systems and storage, for example."
It may turn out that enterprises begin changing the organization of their internal IT teams as the silos between networking, systems and storage begin to disappear. Analysts believe that Cisco's technology is "game changing" and could prompt competitors to offer similar unified technology. That would result in changes across the board.
"I am not sure that the HPs and Ciscos of the world are going to tell the business community how they have to structure their departments," Patz said. "But we were already moving in that direction."
The big HP-Cisco feud -- or not
Much of the excitement around Cisco's push into servers came from pundits who believed this would result in an all-out cat fight with longtime Cisco friend HP. But with this release, partners say they don't feel forced to choose between the two, and it's too soon to tell just how disruptive this release will be.
WorldWide's Olwig said Cisco's release only gives integrators more choices to offer customers. What's more, he said, both HP and Sun have very strong products that customers won't let go of any time soon.
Dimension Data's Bowden said he sees no conflict in the product offerings from the two companies -- and therefore no need for partners to choose.
"While there is some overlap with the new announcement and other data center companies and partners, each has a unique set of products," Bowden said.
Coleman's Patz has hope for a little market disruption.
"It may replace other offerings over time," he said. "I am hoping that a rising tide lifts all boats."