Cisco Wraps Arms Around Enterprise Computing

Networking giant Cisco Systems unveiled a slew of new products and services Monday that promise to simplify, consolidate and lower the cost of running vast computer networks at large businesses.

The new products and services fall under an initiative Cisco calls the “Unified Computing System,” which unites computing, networking, storage access and virtualization into a scalable, single system.

Here’s another, simpler way to think about what Cisco’s trying to do: “It’s like when Mr. Scott from ‘Star Trek’ has to move power from the Enterprise’s forward shields to the ship’s life support systems,” said Yankee Group analyst Zeus Kerravala. “That’s the way data center automation is supposed to work. That’s the problem Unified Computing System is supposed to address.”

Cisco’s stock was up .9 percent to US$15.66 per share in mid-day trading on Monday.

Unified Computing System

Here are a few potential advantages the Unified Computing System will offer to customers, according to Cisco:

  • Reduces total cost of ownership by up to 20 percent in capital expenditures and up to 30 percent in operational expenditures;
  • Improves IT productivity and business agility by allowing for the provisioning of applications in minutes instead of days;
  • Increases scalability without added complexity because UCS is managed as a single system, whether it has one or hundreds of servers with thousands of virtual machines;
  • Improves energy efficiency through the significant reduction of power and cooling costs;
  • Provides interoperability and investment protection through industry standards-based infrastructure.

“Cisco is addressing a lot of the limitations and bottlenecks created through the virtualization of server workloads that is being done to such a large extent these days,” said Brent Bracelin, an equity analyst with Pacific Crest Securities. “It’s a purpose-built, pre-packaged suite of products and services. The big bottleneck is moving these applications across the network.”

The main goal is simplification — UCS is designed to reduce the number of cables and connections and the overall complexity associated with operating large networks, Bracelin told TechNewsWorld.

“If they can create just one box for customers, it’s a lot easier to manage,” he said.

The new suite of Cisco products will appeal most to large businesses that manage a lot of data.

“Take a company like Amazon,” the Yankee Group’s Kerravala told TechNewsWorld. “It has to expand the online transaction processing system for Black Friday, the busiest shopping day of the year, so it can meet demand. That’s the one day where Amazon’s network is actually used at maximum capacity. Cisco’s new products are designed to do just that.”

UCS Not a Surprise

The news out of Cisco on Monday did not surprise Bracelin, or, likely, anyone else.

“This has been the most blogged-about product this year,” Bracelin said. “Cisco entering a new market on the server side is big news, obviously. It was the worst-kept technology news secret in all of California. Everyone knew it was coming.”

Cisco’s new products could bring it into direct competition with two of its biggest partners — HP and IBM. However, competition among partners in the technology industry is not uncommon.

“The big goal is to create a new subsegment of the market, but obviously there’s going to be overlap with partners like HP and IBM,” Bracelin said. “HP already has technologies that overlap with Cisco’s networking products. That’s just the reality of a maturing technology industry.”

In keeping with its historic modus operandi, Cisco has designed and built its new networking systems without the help of industry partners, although it will be released in conjunction with products from some of its partners.

“Cisco built it themselves because they can control the quality from end to end and get a huge early-mover advantage,” Kerravala said. “When mass market adoption occurs, they will move it to other partners. It does give them a technological advantage to do it themselves for now.”

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