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Tuesday, January 29, 2008

Cisco rolls out new data-center switch

SAN FRANCISCO (MarketWatch) -- Cisco Systems Inc. introduced on Monday a new data-center switch that the company says can copy all the searchable data on the Internet in less than eight minutes, or run 5 million concurrent high-quality videoconferences between New York and San Francisco.
Analysts say Cisco's (CSCO:Cisco Systems, Inc
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4:01pm 01/28/2008

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CSCO 24.10, -0.10, -0.4%) Nexus 7000 underscores the growing demand for more powerful computer-networking gear, especially with the rapid increase in video traffic in what has been described as Web 3.0.
"It's infrastructure for the next generation of data-center requirements," said analyst Roger Kay, president of Endpoint Technologies Associates. "In Web 3.0, a high proportion of the content is video, high-definition video even. And many software elements are delivered as a utility."
Cisco shares were up more than 1% midday Monday.
In a bid to keep costs down, many companies are pushing for more power-efficient networks. An emerging trend, called software on demand, lets companies buy computing power the way one purchases a utility such as water or electricity.
Cisco says that the new data-center switch would be able to copy all the searchable data on the Internet in 7.5 seconds, download Wikipedia's database in 10 milliseconds or download 90,000 Netflix movies in less than 40 seconds. It also can run 5 million concurrent transcontinental videoconferences using the company's Telepresence Collaboration systems, a company spokeswoman said.
The product will be available in the second half of 2008, according to Cisco.
Analyst John Anthony of Cowen and Co. said the new data-center switch "will undoubtedly drive sales for Cisco, although the timing of the revenue contribution is uncertain."
He also pointed out that a major Cisco competitor, Juniper Networks Inc. (JNPR:JNPR
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JNPR, , ) , is expected to introduce its own high-capacity switch as well.
"Given that both Cisco and Juniper will have significant new products in the marketplace, customer evaluations will likely take longer than normal," Anthony wrote in a research note.
Kay of Endpoint Technologies Associates said that Cisco also faces competition in this market from Brocade Communications Systems Inc. (BRCD:BRCD
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Gary Beach, publisher of CIO magazine, which is geared toward chief information officers, said that Cisco appears to be "making a big bet" on the new data-center switch at a time when big corporations are looking to improve the way they manage their networks.
"Large corporations are drowning in data that needs to be quickly dispersed in globally integrated enterprises," he commented. "Moreover, as budgets remain relatively flat, CIOs must continue to search for more efficient ways to manage their infrastructures."

Cisco's New Data Center Plan Looks Promising. What Will IBM Think?
Cisco Systems revealed a major offensive today in its ongoing assault on the data center market. And more than ever, it proposes a vision in which data centers are defined not by a computer architecture, be it mainframe or PC server farm, but around the network itself. That makes sense. After all, almost every kind of software is evolving from something that was written for a particular computing platform, into something that is written to be delivered as a service via the Internet. And not static services, either, but ones that can be adapted at a moment’s notice on a users’ whim—say, by adding a new widget to Facebook, or a new customer order on These days, the communication of information—not just the processing of information—is where the action is.

Specifically, the company announced the Nexus 7000, its biggest upgrade of the basic corporate network switch since Cisco started selling its now-ubiquitous Catalyst line in the mid-1990s. The box is so fast it can download all of NetFlix’ 90,000 movies in 38 seconds, or copy the entire searchable Web in 7.5 minutes, the company claims.

But the speeds and feeds of the new box are not the big change.

The real news is a new layer of software, called a fabric, that is designed to orchestrate the efforts of the various kinds of technology found within any data center. Rather than just oversee the Cisco gear that moves bits in and out of the building, this fabric can also be used to control the servers that process those bits, the storage gear that holds them, and the applications that do something useful with them.

If it works, Cisco would mark off a hugely strategic niche for itself, as a kind of king of virtualization. That's the name of a technology that's risen to prominence in recent years within pockets of the data center. VMWare, for example, has become corporate tech’s new darling thanks to software that lets companies spread work among all of their available servers, rather than have them sit idle waiting for their particular job to be called. In storage, gear from companies like Brocade plays a similar role. But until now, no company has figured out a way to easily coordinate these various pools of virtualized gear. With a Nexus, companies will be able to automatically create “domains” to describe a given combination of bandwidth, processing, storage and software, says Cisco senior vice president Jayshree Ullal.

It’s been a huge undertaking, she says. She first assigned 50 top techies to the job almost three years ago. Now there are more than 500 on the job. The company has spent nearly $250 million on the project—mostly on perfecting the ten million lines of code in the new software.

Given Cisco's proven ability to move into new markets and its vast cash reserves and market influence, I don't think Cisco will fail. But here’s my question: How will today’s kings of the Data Center feel about Cisco taking on this expanded role? Cisco assures me it's worked this out to everyone's satisfaction, and referred me to a number of its partners. Top executives at VMWare and Intel, for example, both said they welcome Cisco’s approach. “We don’t think it threatens us, because we work at a fundamentally different layer,” says Bryan Byun, VMWare's vice president of Global Partners and Solutions. Since virtualizing the entire data center depends on being able to virtualize the computers, “we think the two approaches complement each other.”

But what about IBM, the world’s leading data center supplier and Cisco’s most important partner in recent years. I didn’t interview anyone from IBM, and I’m sure its executives will profess support, publicly. But the basic philosophy of Cisco’s new mantra can’t help but be threatening at some level. Ullal refers to servers, storage gear and other kinds of products as “peripherals” to the real platform of the future: the network. I’m sure IBM, a company that’s spent decades designing and building corporate data centers, doesn’t see itself as a peripheral maker. And Ullal says that as Cisco settles into this new role, it will begin rolling out many new services to help companies take advantage of its technology. Makes sense, but it will be interesting to see if Cisco can pull it off without encroaching on the turf of IBM’s Global Services division. “Cisco is trying to subsume control of the IT space,” says Frank Dzubeck, president of consultancy Communictions Network Architects. “They’ve got to be stepping on [some of its partners’] toes. It’s a question of how much it hurts before they start turning to other [partners].”

No doubt, Cisco won't enjoy any clear sailing. By the time the Nexus 7000 finally ships--it's not due out for another six months--it will face increased competition. Microsoft is pushing ahead with new virtualization plans. Brocade recently introduced a box called the DCF, for Data Center Fabric. And industry insiders expect Juniper Networks to announce a new switch for corporations at a Jan. 29 press event. Indeed, Juniper CEO Scott Kriens implies that Cisco made its announcement today in part to steal Juniper’s thunder. "I'm sure they knew we were having our little party in New York [tomorrow]."

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