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.

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.

Cisco’s New Data Center Products Trump HP’s New Avaya Partnership

HP continues to plug-the-holes against Cisco by signing a three-year agreement with Avaya.  The agreement calls for HP sales and services teams to be trained and certified in Avaya call center and unified communications.  HP sales teams will have the ability to resell Avaya and offer outsourced management.

What’s interesting about this announcement is that HP now has agreements with multiple competitors for the next generation data center including Brocade and Avaya.  If you add the potential overlap between Avaya and Alcatel-Lucent mixed with a bit of Microsoft then you have the danger of some explosive conflict.  Of course, HP is no stranger to handling this type of conflict.  However, would a future Avaya acquisition make better strategic sense for HP?

Meanwhile, as HP strengthens their partnerships, Cisco strengthens their next generation data center arsenal.  Once again, Cisco has trumped their competitors by introducing FabricPath, a superset of the emerging IETF standard called Transparent Interconnection of Lots of Links (TRILL).  Remember, Brocade is committed to TRILL within their recently announced Brocade Virtual Cluster Switching (VCS).

FabricPath is an upgrade to NX-OS that combines the best of layer-3 routing and layer-2 switching allowing for scaleable data centers with predictable network performance.  Take the following example from Cisco that was featured in an article by Kevin Komiega in InfoStor:

“With spanning-tree you have multiple links which are blocked and a high level of oversubscription. With FabricPath you can build a scalable, flat, non-blocking network with two layers and no oversubscription with a 16X improvement in bandwidth performance,” says Nikhil Kelshikar, product marketing manager for Cisco Nexus 7000 Solutions.

Additionally, FabricPath and Cisco’s new F-Series modules for the Nexus 7000 allow Cisco to combine six Nexus 7000 switches into a single product.  Cisco is offering a pre-packaged solution called FabricPath Switching System (FSS) that can be grouped in clusters of eight to allow for 160Tbps of raw switching capacity.  Wow, did I just write that?  Not to mention the fact that Cisco just took the air out of Juniper’s Stratus Unified Fabric.

If that wasn’t enough, Cisco announced the availability of a software release of WAAS that can be run as on on-demand service on the Cisco ISR.   Next, Cisco rolled-out new cloud deployment professional services and Cisco introduced a new Catalyst 4948-E Switch with increased capacity, performance, and automation.

Finally, Cisco is introducing Cisco Intelligent Automation Solutions for IT Services.  Building on Cisco’s acquisition of Tidal Software, Inc., they are releasing new versions of the Tidal Enterprise Scheduler and Tidal Enterprise Orchestrator.  As any reader of this blog knows, I am very interested in the autonomic aspects of the next generation data center and I hope to obtain additional information about this solution.

In this latest round of the battle for the next generation data center, Cisco’s products trump HP’s partnerships.

Google Must Change Tactics and Android Must Succeed

It is safe to say that I have not been a big fan of Google. I have issues with their tactics, business model, and insatiable appetite for personal information. It will come as no surprise to my readers, that I was delighted by Google’s recent announcement to cancel plans to bring the Nexus One to Verizon. However, my reasons behind supporting this decision may come as a shock to you; Android must succeed. Why?

To put it bluntly; Google may be the only company left that can stop Apple’s dominance in the mobile space. While Microsoft certainly has the talent, I question if they have the will as they continue to chase Google for advertising dollars. Meanwhile, Nokia seems a bit dazed and confused by Apple’s success as they cling to Symbian OS. RIM is stuck in the Enterprise world as they must now fight Apple on their home turf with devices that seem behind the times. Finally, Palm may find a buyer but also obsolescence.

One of my best friends put it this way, “When you buy an iPhone you are buying a device without root access.” In essence, we are forced to use and develop applications on the iPhone via the pleasure and direction of Apple. In the past few months, we have tried to develop more than a few interesting iPhone applications only to find we were in danger of violating Apple’s Licensing or Apple’s iPhone OS did not support or allow what we were trying to build. While some have gone the “jail breaking” route to overcome these obstacles, we would rather stay within the mainstream user population and remain legal.

While Apple controls every aspect of the iPhone, Google has the chance to disrupt this model. For some reason, Google has a tenancy to follow leaders in particular spaces. In my opinion, that is why they created the Nexus One as they thought controlling the hardware and software was key in creating a successful device. HTC and Motorola proved this notion incorrect when they created superior devices with the same Android OS. What Google really needs to do is concentrate on improving and refining Android’s usability and functionality to exceed that of Apple’s iPhone OS.

A refined Android with a vibrant community filled with robust application development has the chance to trump iPhone because it is open (we have root access!) and a killer application is sure to be developed. Google has many different avenues to make money off of Android including advertising, cloud services, and more.

Therefore, Google must change their tactics by concentrating on refining and improving Android while supporting their hardware and carrier partners.

Apple’s Next Move; Buy Yahoo

It seems like only yesterday when the world wasn’t quite so complicated. When good vs. evil was as simple as Apple vs. Microsoft. With the rise of the Internet came the birth of a whole new paradigm of communicating and sharing information. Proprietary software has new open source challengers that are surprisingly refined while continuing to expand their capabilities. Client/Server gave way to Web based user interfaces and the deliver of legacy software is giving way to the cloud. The desktop has been replaced by the laptop, the cell phone became a mobile device, and Apple has become a powerful force within computing, music, video, mobile devices, and more. However, once again the world has changed and Apple must adapt to face a new challenge; Google.

Once upon a time Apple and Google were friends with a common enemy and clear boundary lines. Today, those lines have been crossed and they are headed on a collision course. Apple didn’t start this skirmish, but they did create an inflection point that has become a clear threat to Google’s future. The rise of OSX, iPod, iPhone, iTunes, and now iPad, flew in the face of Google’s Internet vision centered around their cloud. Google risked losing control of the end-user platform and the advertising revenue they covet; they had no choice but to stop Apple’s momentum. Therefore, Android, Chrome, and Chrome OS were born.

While Google is on the offensive, Apple continues to chart their own course. However, this changed when Google released the Nexus One and then snatched AdMob from Apple’s hands forcing them to settle for Quattro Wireless. This skirmish is now an old fashion feud and may escalate into an all out war. Maybe that’s why Schmidt met with Jobs last Friday to attempt to deescalate the situation, but remember that Jobs never yielded to Gates. If Apple wants to attack Google, then look no further than Yahoo as a perfect takeover target.

Apple would not be buying Yahoo for search, that’s Microsoft’s problem. Instead, Apple would be gaining a cloud and advertising platform for which they could re-launch current Yahoo services, build on Yahoo’s mobile and location based strategy, and integrate current Apple offerings. Imagine a new Yahoo that has been injected with Apple’s DNA and provided innovative services and content for Apple’s computing and mobile products. How about a cloud based iTunes Store, the merging of Flickr with iPhoto, or Time Capsule based back-up in the Cloud. I shutter to think how Apple could redefine and reinvigorate Yahoo.

Consider this, Yahoo is still the third most popular website on the United States. Yahoo’s problem has never been visitors, instead it has always been the monetization of their incredible content. Does anyone doubt Apple’s ability to introduce new and innovative business models to the market? Additionally, Yahoo’s Fire Eagle location-based service would be downright explosive in Apple’s hands.

As Jobs rightfully stated, “We (Apple) did not enter the search business. They (Google) entered the phone business.” Now is the time for Apple to take their massive following, passion, and ability to invent ground breaking intuitive technology and attack the advertising revenue that is at the heart of Google’s dominance. The centerpiece of such an attack is the purchase of Yahoo serving as a catalyst for Apple’s continued domination of the mobile space.

Defending Microsoft and Offering a Commentary on Google vs. China

Some of my closest friends and colleagues will find it ironic, yet again, that I am compelled to write a blog post defending Microsoft.  After all, I have been engaged in a computing project aimed at removing all commercial software from a computer’s image.  Alas, that is a different story, but I will happily report that there is definitely a bright light for technologists but not for the average Joe.

However, once again Microsoft is on the defensive about their products and policies.  As an example, let’s talk about Bing.  While Bing is an innovative “new” Internet search engine, analysts and writers are preoccupied by its position as the number two search engine in the market (including Yahoo).  Everyone wants to know how Microsoft is going to catch Google and become the number one search engine.  Why?  Does anyone think that Microsoft was going to catch Google overnight?  Does anyone believe that Internet search is capturing quality results across all the billions of pages on the Internet?  What about Facebook?

Internet search is destined to become like the Walkman™; supplanted by something more innovative and useful.  What!  Are you kidding me?  In the early days, Internet search was a battle of relevance and content.  Google won the initial search wars by creating an interface that was clean, fast, and was able to crawl a significantly larger percentage of the Internet.  Today, Internet search is filled with hundreds (millions) of pages ranked by relevance, key words, advertisements, and more.  Other than me, who flips to page 8 of their search results?  Furthermore, how many of us are surprised when a friend, stranger, etc. provides us with a new and exciting website on a topic you covet that you never new existed?  Unfortunately, the current paradigm forces us to re-visit the same set of websites over-and-over again while using search as more of a research or curiosity tool. 

In the end, Microsoft should be applauded for attempting to innovate in a space that has been virtually unchanged for years.  Instead, Microsoft is bombarded with the same old questions about Google’s search dominance.  Of course, I am not sure that the innovation will come from the likes of Microsoft or Google, but from the garages, dorm rooms, and coffee houses across the globe.  Does anyone remember a few years ago when Palm was all the rage?  How about MySpace?  Or, the fears that Apple was dying?  Do you remember your first slick Nokia Phone, where is it now?

On a side note, this is not a political blog, yet I feel compelled to comment about the Google vs. China Internet mess.  There are two very different sides to this story; business and personal.  On a business note, Google is an international business “baby” with limited experience and a certain naivety about how they deal with in-country and international laws.  China is a sovereign nation that has the ability to pass and enforce their own laws regardless of their political system.  If Google, or any corporation, does not like China’s laws, then leave.  Perhaps if the West was not so obsessed with spreadsheets and bottom-line results, then China would not be the manufacturing powerhouse and money making machine that they are today.  Microsoft is making the correct business decision by staying in China, offering an alternative, albeit censored, to Baidu.

On a personal note, I agree with Google’s moves as censorship has no place in today’s world.  Someday, people across the globe will rise up to this evil practice of censuring information for the good of controlling people.  However, doesn’t the mere presence of Internet companies such as Google or Microsoft offer people hope?  It certainly is a complicated issue as my prior statement alone causes conflict and contradiction.

Quick Alert: HP Counters Cisco with Polycom Partnership

In a woefully under reported story, HP has signed a global agreement with Polycom for Visual and Unified Communications solutions.  This is an important signing for HP as they continue to be on a collision course with Cisco.  While Cisco’s purchase of Tandenburg was a coup, many outside the industry had to research the company and their products.  Polycom is a different story, as it feels like their equipment is found in just about every conference room across the globe.

Per Polycom’s press release, “Under the expanded agreement, Polycom video and voice solutions for unified communications and stand-alone operation will be sold and delivered through HP as part of the company’s Unified Communications and Collaboration Services portfolio. This will enable organizations to leverage HP’s global presence for evaluating, designing, implementing and supporting communications systems that deliver a consistent, high-quality experience between all locations to ensure maximum benefits and rapid return on investment. The companies will also deliver interoperability between Polycom’s line of standards-based telepresence and video conferencing solutions and HP Halo telepresence.”

Translation, we’re going to kick Cisco’s butt by leveraging our customer relationships, services division, and powerful sales channel.  We may have lost LifeSize to Logitech, but we aren’t going to lose Polycom to anyone. Hello, IBM, are you watching this?

Additionally, Polycom announced an expanded partnership with Microsoft.  They are going to jointly develop and deliver “an extended portfolio of unified communications solutions.  Why is this important?  Since Cisco is aligned with EMC/VMware for their UC platform, HP is indirectly playing their trump card in Microsoft.  Who has a stronger relationship with Microsoft; Cisco or HP?

If the partnership between HP and Polycom takes-off, then I’d expect Michael Hurd to open the M&A wallet once again.  After all, HP must counter Cisco’s moves.

CA buys 3Tera: Playing the Cloud Computing Field to find a Diamond in the Rough

CA has announced the acquisition of 3Tera for an undisclosed amount of money.  Like Cassatt, 3Tera is a pioneer in cloud computing and they will join CA’s ever expanding list of acquisitions within Cloud Computing Management.  3Tera is home to AppLogic which started off within Grid Computing and has now morphed into a Cloud Computing Platform.  Per 3Tera’s website, “AppLogic is a turn-key cloud computing platform for running and scaling distributed applications.”

It seems that CA is engaged in “a throw spaghetti at the wall and see what sticks” method of M&A.  Only two of CA’s last four acquisitions have sustainable/notable customer lists (per their respective websites), at least two of the acquisitions have technology overlap between themselves and/or other CA products, and one acquisition may have come with few customers yielding little revenue.  Of course, this may be indicative of the space itself as Microsoft has revealed that revenues are years away from Cloud Computing providers.

Perhaps CA is attempting to become the “arms dealer” of Cloud Computing Management, but that’s a tall order for any company.  HP has spent billions on notable software companies such as Opsware, Peregrine, and Mercury Interactive.  BMC has added BladeLogic, Tideway, and Phurnace to integrate within their Remedy/Atrium products.  Meanwhile, VMware/EMC, Microsoft, and Citrix continue to beef up their management portfolios along with a host of start-ups and disruptive virtualization management companies.   IBM has recently acquired Intelliden to plug a hole within their Tivoli management software and they are the fathers of autonomic computing.  Finally, Cisco lurks as an ever present threat within this space.

For CA to be successful, they must not only continue the development and integrate these products into a single solutions suite, but they must execute on a coherent marketing and sales strategy.  With BMC set to fill the management void left by the rift between Cisco and HP, CA may look to Juniper, Brocade, or perhaps Huawei as potential partners.  If not, CA will be forced to compete with Cisco, HP, and IBM on the back-end of these next generation datacenter build-outs with a management agenda that is often an after-thought.

While I wouldn’t count CA out, they have a lot on their collective plates.  Will CA be able to quickly expand 3Tera to support VMware?  Will CA figure out what to do with Cassatt?  Will CA open new markets to NetQoS?  What about security management?  What will CA do to counter IBM’s purchase of Intelliden?  Will CA’s properly package these new products?

How many acquisitions does it take to create a market within Cloud Computing Management?  One…NetQoS…Two…Cassatt….Three…Oblicore…Four….3Tera….Five…

It’s a great time to go shopping for companies that have money and CA is definitely playing the field in search of that diamond in the rough.

Defeating Wrap and Roll

Wrap and roll is a sales and marketing technique that involves a complicated set of maneuvers designed to placate your most feared competitors.  In most cases, wrap and roll is used by larger companies to attack smaller, disruptive, or fast growing start-ups within a particular niche market.  Whether wrap and roll slows, stops, or allows for M&A within a market, it definitely has an impact on innovation.

Wrap and roll needlessly confuses customers, prospects, analysts, and media.  It starts with an innocent phrase, “yes, we can do that and have done that for years” and ends with a new product launch, professional service bills, or an acquisition.  Basically, large companies cannot react quickly enough to smaller disruptive technology challenges.  However, these smaller companies typically lack the scale and market power of the larger companies.  Faced with the prospect of losing a key market, the larger company puts their machine into motion.

First marketing springs to action creating comparative charts, graphs, and FUD (Fear Uncertainty and Doubt) presentations that attempt to create an aura of superiority.   Second, technical marking tests the competitive gear to find weaknesses in the products and to share information with M&A teams.  Third, sales begin to circulate the marketing FUD and attempts to slow down the sales cycle to give them a chance to win.  Fourth, engineering teams attempt to create a new product while M&A teams look at potential acquisitions.  Fifth, engineering fails to create a product while the M&A teams decide that the top two competitors are too expensive and purchase a relatively unknown company.  (Note: This phase usually takes a long time as companies will get mired in the build vs. buy phase while trying to band-aid a solution together.)  Finally, the entire niche solution is renamed and put into a new suite of products that give customers increased functionality without additional licensing costs; maintenance is another issue.

While wrap and roll won’t produce one hundred percent success rates, it can be effective in slowing down a hot market by forcing proof of concepts, competitive bake-offs, and request for proposals.  Wrap and roll also serves as a mechanism whereby the larger company attempts to commoditize a growing market while stymying disruptive start-up behavior by choking off vital revenue growth.  An additional consequence of these actions is increased consolidation within the niche as other large companies seek to fill product gaps.

How do you defeat wrap and roll?  Guts, determination, listen, disruption, and an incredible team.

  • Guts; to say no.  No to the naysayers, no to due diligence, no to the quick payout.
  • Determination; to win.  To find roads where there are roadblocks, to work harder and faster than the competition, to know that we are the best.
  • Listen; to your customers.  Build what they need, deliver what they want, and give them what they desire.
  • Disrupt; all areas.  Provide a revolutionary product, present the wow factor, and support the heck out of them.
  • Team; in perfect cadence.  There is nothing more wonderful than a company that marches in perfect cadence and executes across all areas (executives, engineering, marketing, sales, etc.) of the organization.

Here’s to the companies that have the guts to build teams that have the determination to listen to customers and disrupt markets.

The bamboozle is over: Google’s Mantra is BS

Google is scary on many fronts; from the information they collect about their users to how they use their size/power to bully their way into markets.  While Platen has written about the evils of advertising based services and the power that Google (and Facebook) hold over their users, the mainstream media and “Wall Street” are in love with GOOG.  Why?  They are a money making machine with a cult-like following.  Search has become synonymous with Google.

What has Google really done?

Google Search and AdWords puts Inktomi out of business…YES
Google Mail ends Yahoo Mail’s dominance…NO
Google Docs ends Microsoft’s Office dominance…NO
Google Talk ends Skype’s dominance…NO
Google Chat ends Yahoo/AOL IM’s dominance…NO
Google Chrome ends IE/Firefox’s browser dominance…NO
Google Android ends iPhone’s dominance…NO
Google YouTube ends Hulu’s dominance…NO
Google Books ends Amazon’s dominance….NO
Google Nexus One ends iPhone’s dominance…Any bets?…NO
Google Orkut ends (take your pick)’s dominance…NO
Google Chrome OS ends Linux/Microsoft’s dominance…Any bets?…NO
And the list continues…

Has Google made a strategic mistake?

While Microsoft continues to fight Google on many levels, they are too polarizing of a company to be a fanatical threat to Google.  However, the same cannot be said about Apple.  Apple users are incredibly loyal, fanatical, and growing.  Additionally, Apple already has what Google wants and needs; OSX, iPhone, iPad, and i(whatever they want to build).   Google sees the future; it’s in mobile devices and owning the mobile OS and/or advertising platforms.  Apple has the devices, the store, and the platform to dominate.

After Steve jobs said, “…This don’t be evil mantra: It’s bullshit.” Google’s world is very different.  With a single OS upgrade, Google search becomes a memory on the iPhone.  Or, with a single purchase, iSearch is born.  Or, …

As Carl Sagan said, “One of the saddest lessons of history is this: If we’ve been bamboozled long enough, we tend to reject any evidence of the bamboozle.  The bamboozle has captured us.  Once you give a charlatan power over you, you almost never get it back.”

Google isn’t a non-for-profit, they aren’t the Gates Foundation; instead they are like any other corporation that seeks to maximize profits and shareholder value.  However, while IBM sells services, Cisco sells hardware, and Wal-Mart sells goods, Google needs YOUR personal information, YOUR habits, YOUR mood, YOUR clicks, and more to make money via advertising.

The bamboozle is over.

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