Infrastructure Vendors Vying For Stack Supremacy

Cisco’s decision to create a monolithic environment, and to sell servers in competition with HP, IBM and other erstwhile partners, was just the first salvo in a battle for domination of enterprise data centers. IBM’s aborted attempt to acquire Sun was the next logical retort, and as my colleague Erik Sherman notes, Dell has just raised $500 million in the debt market, perhaps to make its own move on Sun in an effort to consolidate and expand its own position.

The emergence of new tools supporting virtualization technology, and the need by major platform vendors to maintain growth rates of bygone years, is creating a new dynamic that could reshape the configuration of corporate data centers within a few short years. Throw in the difficult economic climate, and there’s reason to believe the days in which Cisco, Sun, Dell, HP and IBM worked together throughout the server stack may soon be a thing of the past.

By far the most important factor abetting this tumult is the growing acceptance of virtualization technology as a tool for lowering costs and maximizing existing physical resources. The allure of virtualization is that it allows customers to run several virtual machines on a single physical server. While it has been widely in use for several years, it is has been given new impetus by Intel’s introduction of the Nehalem processor, the first chip made specifically to support virtualization. “It’s the first core change to make virtualization the dominant form of server computing, instead of just an additional form of computing,” said Shaun Walsh, vice president of marketing for infrastructure vendor Emulex.

Nehalem allows vendors to use virtualization technology on other aspects of the data center than just servers. For instance, vendors can now try to help customers manage their switching infrastructure and the speeds with which data is transferred from servers to storage devices and back again. It’s understandable that vendors have convinced themselves that they could help customers become even more efficient if all the equipment in this complex dance were made by a single company–theirs, of course. And that’s precisely Cisco’s rationale for introducing its own line of servers for its “unified computing system.”

Even when customers emerge from the recession, they will remain under pressure from shareholders to improve efficiency and cut costs, just as they were after the last recession, with technology seen as the prime mover of increased productivity.

Walsh told me that among customers with whom he’s talked, Cisco’s move to consolidate its power in the data center has been met by curiosity, but no rush to buy. “Is Cisco trying to be aggressive and get every dollar out of the data center? Sure, and good for them. But I’m not sure if IT managers will share that enthusiasm,” he said.

But clearly IBM, HP, and maybe Dell, aren’t taking any chances, and are busily making monolithic plans of their own.

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