Quick Alert: HP and Brocade; “…Be Nice Until It’s Time to Not Be Nice…”

The HP Technology Forum 2010 is in full swing as HP and Brocade continue to “be nice” and reaffirm their decade old partnership.  According to Brocade’s press release, “…Brocade and HP enjoy the largest SAN customer base with over 3.5 million HP B-series ports installed.”  Note: HP OEM’s Brocade’s technology under the HP StorageWorks brand.

What did they announce? A new 64-port 8Gbps Fibre Channel module for HP’s StorageWorks SAN switches, a new host bus adapter card for HP’s BladeSystem C-class servers, and a the availability of HP StorageWorks P2000 G3 Smart Array that creates a deployment ready bundle of storage arrays, SAN switches, and HBAs.

Brocade has a two-pronged strategy: Arm the likes of HP and IBM with OEM’d products and provide a competitive vision of the next generation data center within Brocade One.  This “have your cake and eat it too” strategy is needed to combat Brocade’s largest rivals while shielding them from Cisco.  However, whatever revenue benefits this brings Brocade in the short-term may be overshadowed by an inevitable showdown between Brocade Foundry and HP ProCurve in the long-term.  After all, if you are Brocade you don’t spend $3 billion on Foundry Networks to play third or fourth fiddle and if you are HP you don’t spend $2.7 billion on 3Com to “margin share” with an OEM.

In the end, I’m reminded of a scene in Road House where Dalton says; “I want you to be nice until it’s time to not be nice.”  And how will you know when not to be nice?  When Mark Hurd says so.

Why Cisco needs Liquid Computing

It must feel a bit like being in the movie Groundhog Day over at Cisco as they continue to face increasing competition from both large and small challengers.  However, unlike the past, consolidation and the rise of the next generation datacenter (Cloud Computing) has dramatically raised the stakes.  Cisco cannot simply use their superior channel, army of certified engineers and sales people, partnerships, and market power to eliminate or marginalize the competition.  Further complicating matters is the delicate balance between companies that both cooperate and compete within the same market.

As Cisco marches forward with their Unified Computing strategy, they’ll need more than organic development and growth to unseat the likes of HP, IBM, Dell, and Sun.  I was highly disappointed with Cisco’s UCS B-Series Blade Servers as they weren’t as innovative or as tied into the Nexus products as I had hoped.  To that end, it is time for Cisco to shake up the server market with an acquisition (or two) of their own.

One such acquisition target is Liquid Computing headquartered in Ottawa, Ontario, Canada.  Liquid Computing has built a unified computing system called LiquidIQ that is made up of both hardware and software.  From a hardware perspective, Liquid Computing is innovative, dense, and creates a “datacenter in a rack”.  From a software perspective, Liquid Computing has created a central point for management with their LiquidView software including server, storage, and network configuration and management. 

With one brush of Cisco’s checkbook, they would instantly change the game and rock the IT industry.  An acquisition of Liquid Computing could be as important to Cisco as it was when they purchased Kalpana in 1994.  While Liquid Computing has been branded a “Visionary” in Gartner’s 2009 Magic Quadrant, an acquisition by Cisco would certainly elevate them into the Magic Quadrant (Upper Right-Hand Corner).

Imagine re-branding and integrating Liquid Computing with Cisco’s Nexus and Unified Computing product lines.  Virtually overnight, this new solution based on Liquid Computing would be injected into the Cisco machine and made available to customers worldwide.  Over time, Cisco would strengthen Liquid Computing’s ties to EMC and VMware, while injecting more and more core Nexus technology into the solution.

Cisco is on the cusp of not only redefining themselves but also an entire industry.  To complete this transformation, Cisco must bold and move out of their comfort zone.  The game has definitely changed as Cisco’s greatest competitive threats do not necessarily come from classic networking providers or start-ups such as Juniper, Brocade, or Riverbed; instead, it comes from the likes of HP, IBM, Dell, Huawei, and more. 

Instead of simply watching HP buy 3Com, Dell and IBM OEM Juniper equipment, Oracle buying Sun, and awaiting Huawei’s entrance into the U.S Market (possibly with the purchase of Motorola), Cisco must launch an offensive on the server vendors via a visionary acquisition. 

Could this visionary acquisition be Liquid Computing?  Perhaps Groundhog Day may be coming to an end.