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VMware, Cisco Build Rival Data Center Teams

Mitch Wagner

As carriers find vendor lock-in as repellent as skunk, vendors are changing their seduction strategy. Vendors are building partnerships to impress carriers with freedom of choice, and win control of the data center.

"Pretty much everybody is building partnerships," says Heavy Reading analyst Roz Roseboro. "They know operators don't want vendor lock-in. They're all trying to build ecosystems."

Cisco Systems Inc. (Nasdaq: CSCO) and VMware Inc. (NYSE: VMW) are the most visible alliance-makers lately, with VMware recently announcing a high-profile partnership with high-flying Arista Networks Inc.

Arista and VMware last week announced a strategic relationship to help customers build what the two companies are calling the "software-defined data center," focused on development and joint marketing of Arista and VMware integrated solutions for VMware NSX. The partnership builds on previous work with VMware vSphere, vCLoud Director and VXLAN. The two companies have been partners since 2010, working on cloud and interoperability between physical and virtual networks.

Arista is a good friend for VMware -- or anyone -- to have. In its first-ever report as a public company last week, Arista reported a big 65% year-on-year increase in quarterly growth on revenues of $137.9 million. (See Arista Stock Jumps On Meteoric Growth.)

Other VMware partners for its NSX virtual networking software include a full roster of hardware companies that aren't Cisco: Brocade Communications Systems Inc. (Nasdaq: BRCD), Dell Technologies (Nasdaq: DELL), HP Inc. (NYSE: HPQ) and Juniper Networks Inc. (NYSE: JNPR), as well as Linux OS vendor Cumulus Networks.

Colt Technology Services Group Ltd (London: COLT) is using Arista hardware and VMWare NSX software to migrate from a Cisco-dominated proprietary network to open, virtual networks. (See Colt Pulls the Trigger on Data Center Virtualization, Arista Stock Jumps On Meteoric Growth.)

A Networking Vendor Finds Lock-In Unsuccessful
Trigger warning: Video possibly offensive to women, French people, perfume manufacturers, members of the seduction community, and skunks.

Meanwhile, Cisco has been racking up partners for its OpFlex protocol, announced in the spring as a competitor to OpenFlow in early April. Partners include Canonical, Citrix Systems Inc. (Nasdaq: CTXS), Microsoft Corp. (Nasdaq: MSFT), and Red Hat Inc. (NYSE: RHT) And Avi Networks, Citrix, Cisco-backed Embrane Inc., and F5 Networks Inc. will ship an OpFlex agent with their appliances. (See Goin' South: Cisco Offers 'OpFlex' as Alternative to OpenFlow .)

Cisco partner Microsoft is playing both sides of the street, allying with VMWare on the Geneve protocol to bridge VMware's VXLAN (Virtual Extensible LAN) and the Microsoft-backed NVGRE (Network Virtualization using Generic Routing Encapsulation) protocols. (See Microsoft, VMware Team on Virtualization Standard

F5 is also allied with both Cisco and VMware, and plans to announce a broader VMware partnership this month.

Cisco plans its quarterly earnings report Wednesday afternoon. Cisco revenues have been falling for three consecutive quarters; financial analysts predict sales growth will continue to decline, down 2.2% year-over-year, with revenue of $12.14 billion and earnings of 0.53. (see Cisco Earnings Suffer From Carrier Weakness.)

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Technology analyst Tom Nolle says the Arista/VMWare alliance could be "one of the pivotal steps in the evolution of networking." It's all part of a big battle by vendors for the data center, real estate which IBM has been losing influence in in recent years due to its early withdrawal from networking, lagging virtualization and cloud strategies, and more recent withdrawal from x86 servers.

"IBM’s loss here put the critical data center space more up-for-grabs than would have been the case normally," says Nolle. "Cisco and VMware have been the two trying hardest to do the grabbing, with HP a close third."

Cisco and VMware are using alliances to strengthen vulnerable flanks. Cisco is vulnerable in that networks are becoming increasingly software-defined, while VMware is vulnerable in that networks still need hardware to actually "move real packets. You have to be able to actually connect stuff using copper and fiber," Nolle says. So Cisco is using alliances to strengthen its software strategy, and VMware is using alliances to bolster its lack of hardware product.

Dell is in the middle of a couple of key partnerships. It partnered with Big Switch Networks in April, plans to announce a partnership with VMware at that company's VMworld customer conference later this month. (See Open Season: Dell Taps Into Big Switch.)

That's a quick rundown of high-profile industry partnerships, very nearly off the top of my head. Am I missing anything important? Let me know.

— Mitch Wagner, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profileFollow me on Facebook, West Coast Bureau Chief, Light Reading. Got a tip about SDN or NFV? Send it to wagner@lightreading.com.

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User Rank: Light Sabre
9/5/2014 | 4:49:19 PM
Cisco's software partnerships..
Will these strategic partnerships for software platforms really give Cisco any edge over its competition? (Sounds a bit like Nokia adopting Windows to me.. the burning platform isn't going to be saved by outsourcing a key function to another company that has its own interests to look after.)
sam masud
sam masud,
User Rank: Light Sabre
8/12/2014 | 3:28:22 PM
Re: Increased partnerships tell a longer story as well
Could not agree more, and your post says what I'd been thinking (except you said it better). With the coming tsunami of openness and disaggregation of the layers, somebody is going to have to put the multivendor pieces together for customers. Quite possibly the "pre-integrated" solutions will be be like a Cisco on steroids--minus the premium and proprietary hardware/software.
User Rank: Moderator
8/12/2014 | 10:18:27 AM
Increased partnerships tell a longer story as well
For the better part of two decades, we have seen the Best of Breed era in IT. Solutions have been cobbled together by companies (or integrators) after picking the best of breed solutions for each point component within the broader solution.

What VCE and Exadata teach us is that companies will win big dollars if they handle the integrations for the customer. The first step is to partner, but this will be followed by even more consolidation in the industry. 

Over time, we will end up at pre-integrated solutions that are offered by a smaller number of very large players. This re-verticalization of IT will fundamentally change how we buy and deploy infrastructure, which will remove some constraints and create additional requirements on the underlying platforms. 

I don't think this plays out immediately of course, but we likely will see a very different competitive landscape 5 years from now after a period of relative stability for some time now.

Mike Bushong (@mbushong)

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