The first question you have to ask about Cisco’s unified computing system (UCS) is, why would Cisco enter the server market now? After all the last decade has seen far more companies exit this market than enter it? Surely it’s so commoditized that’s there little left to do but find ways to make a server cheaper than everybody else!
Cisco would dispute both of these arguments. First they believe that they are not entering the server market they are creating a new market, that of unified computing systems. Second, they argue that unified computing, which emphasizes the integration of the entire infrastructure combined with ubiquitous server virtualization, offers plenty of scope for innovation at all levels, and the high-margins that a differentiated product brings.
I can certainly see the strength of the latter argument; the combination of server virtualization, server platforms optimized for server virtualization workloads, sophisticated I/O virtualization technologies and unified network fabrics open up tremendous opportunities to optimize the compute infrastructure.
What I’m not so sure about is the first argument, i.e. that this is a new market, not just part of the natural evolution of the commodity server market. My feeling is that existing vendors are already heading down the same path, particularly with their blade servers (HP would argue that they are already there). So, my feeling is that Cisco may have got the jump on some of the vendors for a few months, maybe even a year, but the other vendors will respond.
Of course, the real motivation behind this is that Cisco needs a new market to expand in. The halcyon days of explosive growth in enterprise networking revenues are probably gone, and grabbing a slice of x86 pie probably looks pretty attractive right now, lets just hope that Cisco’s eyes aren’t bigger than their appetite!
Posted by: Nik Simpson