Cisco pushes storage consolidation

Soni Jiandani, GM of Cisco's storage business, says customers want fewer vendors, not point product solutions, and this is what's behind the company's partnership with EMC.

Soni Jiandani, vice president and general manager of high-end switching and storage at Cisco Systems Inc., discusses the company's growing market share in storage, wide-area file services (WAFS), Cisco's partnerships with EMC Corp. and QLogic Corp., and iSCSI vs. Fibre Channel.

Competition

According to the latest market share numbers from the Yankee Group, Cisco is eating into McData's Director-class switching business. Between the third quarter and fourth quarter of 2004, McData lost $4 million while Cisco gained almost $7 million in Director revenue. Are you doing anything in particular to woo McData customers over to your products?

Soni Jiandani: The Director-class business has been our sweet spot … about two thirds of our business has come from replacing McData products, but we also compete with Brocade in this market. Half of our customers are repeat business and half are new opportunities for disaster recovery and then there are customers that are expanding to cover the whole network for large scale SANs.

Are they picking Cisco because of some technical superiority or is it that you have such strong account control that in many customer shops it becomes a no-brainer to go with Cisco?

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Jiandani: It's not just technical superiority … many customers are looking to consolidate the number of providers they use and not go with point product vendors where they might not know which platform to place where or whether it will be around in three years or not. Invariably, they have a relationship with Cisco in the data center and feel we have reached a critical mass in storage.

How many customers do you have?

Jiandani: More that 2,000.

Is there room for further storage switch consolidation?

Jiandani: Maybe there is room … it wasn't as clear six to nine months ago that customers wanted to deal with more mainstream vendors. The fewer companies you deal with the less energy you have to put behind each decision you need to make.

WAFS

Brocade just made an equity investment in Tacit Networks, a WAFS company. Cisco bought one of Tacit's competitors, Actona, last year. Did you look at Tacit before buying Actona?

Jiandani: We did do an in-depth analysis of Tacit. The uniqueness about Actona was the company's compression capabilities and low latency.

How many file engine appliances, which is your technology based on the Actona product, has Cisco sold?

Jiandani: We're engaged with many large, reputable organizations, but I don't know what the numbers are.

Do you expect a competitive response from QLogic or McData in the WAFS area?

Jiandani: We are in the content caching business already, which has a close tie with networking and requires optimization. This is not an adjacent market for QLogic to enter … they are focused on HBAs [host bus adapters] and the low-end switching space. And if I were in McData's shoes, I'd have my hands full with integration. It would be an interesting project for them to try and take on at this point.

Cisco's NAS strategy

Cisco made a surprise announcement in January that it would resell EMC's NS500 and NS700 NAS boxes beginning in the second quarter this year. The company once said that it would never get into the disk business. What changed, and can you tell us the thinking behind partnering with EMC?

Jiandani: It was not as much to do with solely getting into the disk business but more about enabling us to offer a solution from one vendor. We wanted to ensure that those customers that wanted to procure NAS and WAFS from one vendor could get it from Cisco. If they don't have a NAS standard and want to consolidate their branches over WAFS and move to a single NAS provider, we can offer that. If they happen to have an existing NAS vendor, they could retain and leverage that.

It's been said that you are alienating your other OEMs, whom you rely on to sell the MDS switches, through this deal with EMC. How did they respond to it? Have you noticed any resistance from them?

Jiandani: We have very good relationships with all of them. We have a long standing and more comprehensive relationship with IBM in the data networking world and this is getting closer. With HP we have a long-standing relationship on the network management side with their OpenView product. And last but not least, HDS [Hitachi Data Systems Inc.], which is the only other standalone storage company and we have full certification with them. I would not downplay these partnerships … we work together to present a unified entity to the customer.

Would it make sense for Cisco to resell other EMC products, like the AX series and the Clariion line?

Jiandani: That is a rumor. So far we have not had that type of discussion.

Resell low-end QLogic switches

It's been widely reported by the press and analyst community that Cisco will soon announce a deal with QLogic to resell its 20-port 4 Gbps switches. What is the market for these products, and why did you decide to partner rather than build this technology?

Jiandani: We are already shipping the 9100 and 9200, which are fabric-level products for companies as they build out their Director class, with consistent software and management across the line. This is a key attribute.

Then there are the midsized enterprises. We wanted to be able to build out smaller SANs for midsize companies -- around 1,000 to 3,000 employees -- that don't need all the high-availability functions. Not the typical Fortune 1000 customers. We think this opportunity will be later in '05. It's a product augmentation strategy.

iSCSI vs. Fibre Channel

Why does it appear that Cisco is abandoning its support for iSCSI in favor of Fibre Channel [FC]? We hear that Cisco is pushing its OEMs towards FC and FCIP products and has actually pooh-poohed iSCSI to a number of users. Is this because the margins are better with FC?

Jiandani: If the deal is end-to-end Ethernet, we have a lot of Ethernet! It's not about margins. We drive our product line on what our customers ask us for.

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