A New Agenda

Cisco seems to be slowly and aggressively moving away from its core business
which mainly involved providing Internet building blocks in the form of switches
and routers to enterprises and service providers. Its turning more into a
company which provides end-to-end data center solutions.

Cisco launched a data center platform that integrates computing, network,
storage access and virtualization called Cisco Unified Computing System. This is
aimed at reducing total cost of ownership, increasing business agility, and
improving productivity besides scaling service delivery, reducing the number of
devices requiring set up, management, power, cooling, and cabling. In a
nutshell, Cisco will offer all components of a data center in an integrated
manner.

Another interesting part is that two of Indias leading players, TCS and
Wipro, are Ciscos global business consulting and system integration partners,
apart from Accenture and CSC. Incidentally, John Chambers, during his India
visit, also announced a partnership with TCS under which the company will set up
a technology practice focused on Ciscos industry-leading data center networking
and security solutions.

As a result of these factors, IBM, Dell, and HP, which have traditionally
been Ciscos partners for various sets of solutions, would be forced to redefine
their relationship with the networking giant.

Implications and Challenges

Data center is one of the potentially lucrative and growing markets that all
vendorsranging from storage, servers, networking to cablingare aspiring to
jump onto. Virtualization technology has also added additional spice to these
offerings and vendors are realizing that after years of serious effort, this is
beginning to become an important component of the CIOs decision-making process.

There would be some implementation for Ciscos long-term nearest competitor
Juniper. Juniper, which continues to play second fiddle to Cisco in the
networking space, particularly the routers market, appears to be happy with the
development, going by comments of some senior executives. The thinking at
Juniper is that with Cisco trying to compete with some of its partners like HP
and IBM, Juniper can get into a better relationship with these vendors to bundle
its routers. This, as per Juniper, is bound to happen since Ciscos server and
storage partners will look alternative vendors. Juniper is also banking on those
CIOs who are reluctant to put all eggs in one basket.

More than the challenge of getting its new unified concept-based products to
the prospective customers, the bigger challenge is the current economic scenario
where enterprises are cautious of adopting new technologies and increasing their
IT and networking spend. Another challenge would be in developing new a set of
channel partners ecosystem which will play a crucial role in the success of its
unified computing system strategy. Only time will tell, whether Cisco remains a
networking vendor or morphs into an IT company in the same league as IBM and HP.

Sudesh Prasad

sudeshp@cybermedia.co.in