Cisco upgrades UCS as battle with HP and IBM hots up

Networking giant takes on former partners with new server system

Cisco revamps its server offering, taking on HP and IBM on their own turf

Networking vendor Cisco is hoping to grab more server market share by announcing the second generation of its Unified Computing System (UCS).

The company said the new offering will reduce IT infrastructure cost and complexity and provide better support for datacentre virtualisation.

It added that by harnessing new Intel processors and its own new networking chips, the new servers are more energy efficient, with power savings of 30 to 50 per cent compared with the first generation systems.

A relatively new entrant to the server market, Cisco debuted its first offering last year, putting it in direct competition with long-time sales partners HP and IBM.

But Andrew Butler, vice president at research analyst Gartner, said that Cisco faces “a long, slow battle to get to any level of volume leadership [in the server market].”

Some barriers for Cisco

Cisco will face some barriers in its attempt to achieve increased market share, one of these is that its focus has traditionally been at the top end of the market, while HP and IBM's market offering is broader.

“Cisco does not do small and cheap. With Cisco’s x86 platform, it’s concentrating on high-end or mid-market datacentre platforms,” said Butler.

Another problem for Cisco is that few customers will be willing to undertake a wholesale change to their server architecture from HP or IBM.

For the past 10 years, IBM and HP have provided servers, relying on Cisco for the networking and communications infrastructure and typically using another partner, such as EMC, in the storage solutions area.

End-users have been told that taking a heterogeneous model is the best approach, and very few are expected to change from that.

“A lot of customers are interested to know more about UCS and they will have no fears about Cisco building a decent product, but it is unlikely that a business will kick out HP and bring in Cisco as a primary choice for its servers,” said Butler.

Cisco's UCS is likely to achieve most success in sites where there is very little legacy. If a company is expanding and setting new datacentres from scratch, then deploying new hardware from a new supplier might make sense.

Cisco and HP will need to continue collaboration

Cisco’s decision to compete with IBM and HP in the server space has come not long after HP decided to go head-to-head with Cisco by entering the networking field with its ProCurve offering.

The two companies had established a successful collaborative relationship but risk jeopardising this by setting up in direct competition with one another, even though Butler argued that "increased competition is good for the market”.

HP and Cisco will need to continue to have a collaborative relationship because end-users will need ongoing support for projects that have been implemented by both HP and Cisco.

“They cannot collaborate on a global scale, but on a local scale, they’re going to have to say ‘let’s at least have a civil relationship’,” said Butler. “Officially they’re at war, but unofficially, they will have to work together on a country, regional or vertical level, in order to satisfy the ongoing needs of their existing customers.”

“You can expect the talk to be very confrontational, but the walk will be a little different,” Butler concluded.