It is widely reported and expected that within the next 24 hours networking and communications technology company Cisco will announce its entry into the blade server market, thus extending its expertise and revenue from switches and routers in the data center to web servers. The original speculation regarding this move began to emerge in January after a blog post by Padmasree Warrior on the official Cisco blog about something that Cisco calls ”Unified Computing”. Just what is this? According to Cisco, ”Unified Computing is the advancement toward the next generation data center that links all resources together in a common architecture to reduce the barrier to entry for data center virtualization. In other words, the compute and storage platform is architecturally ”unified” with the network and the virtualization platform.”
It seems as if Cisco is interested in providing a standardized data center platform which will serve as a foundation for software advancements in virtualization. One wonders if this is a play to more or less ”own” the data center – and if the other web server players will simply roll over and let Cisco have this lucrative marketplace.
Why is this move by Cisco such a threat to current data center web server vendors? Consider these facts, Cisco is both huge and hugely successful. Cisco currently has a market capitalization of around $90 billion. The company employs over 68,000 employees and has annual revenues of over $39 billion. In March of the year 2000, at the height of the dot-com boom, Cisco was the most valuable company in the world, with a market capitalization of more than $500 billion. It is still among the largest and most successful technology companies in the world. The vast bulk of its revenues and market leadership have come within the data center in the form of switches, routers and networking gear. Now the company has apparently set its sites on web servers.
The companies that now stand directly in the path of the Cisco server tsunami are IBM, HP and Dell. These are all companies that manufacture web servers and for the most part do not compete in routers and switches. Additionally, rivals in the router and switch market such as Juniper Networks may find themselves suddenly shut out of a proprietary system constructed by Cisco which necessitates the use of only Cisco hardware and software. One company that stands to gain is VMware. That is because it is reported that VMware virtualization software will become the software platform for the new system.
Daniel Foster, co-founder of UK website hosting company 34SP.com thinks that Cisco will make a bold move if it chooses the server path, ”34SP.com uses Cisco switches exclusively. The company has proven itself a leader in data center components and software. If they do decide to move into manufacturing web servers, they will have a direct path to the data center buyer via their current products – that makes them a force to be reckoned with.”
Stifel Nicolaus analyst Sanjiv Wadhwani was quoted by the Associated Press on Friday after meeting with a Cisco executive that ”Cisco is about to announce a server code-named ”California” as part of a package for data centers. It’s designed to integrate with VMware Inc.’s virtualization software, which lets one computer act like several machines. That technology is already reshaping data centers. ”California” is in the ”blade” category – thin, relatively low-end servers that can be rack-mounted in great numbers – and is powered by Intel Corp. chips, Wadhwani believes. ”Cisco’s goal is to radically change the way data centers are designed, built and operated,” Wadhwani wrote in a research note.”
Look for more information over the next 24 hours from Cisco on their web server plans.
About Derek Vaughan
Derek Vaughan has been actively marketing on the Internet since 1995. His extensive online marketing experience includes the online direct marketing of books for $300 million per year NYSE traded book publisher Thomas Nelson. Mr. Vaughan also marketed products online at the Walt Disney Company as the online marketing manager of ecommerce for ESPN.com. He was also the marketing manager for the launch of the NASCAR Online Store in October of 1999.
More recently Mr. Vaughan turned his attention to online marketing for the Affinity Internet, Inc. family of companies - which owns a broad portfolio of web hosting brands. Additionally, Mr. Vaughan served as Vice President of Marketing for Aplus.Net and helped them establish a strong position in the web hosting field. Derek has also serverd as the VP of Marketing at HostMySite.com.
Derek Vaughan holds undergraduate degrees from both Indiana University and Purdue University, and has earned a Master of Business Administration degree from the Owen School at Vanderbilt University.
Through his theWHIR blog, Derek will touch upon online marketing in the Web hosting space, web hosting events and industry trends.
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