Convergence was a big topic at the SNW conference earlier this month, and it’s one that puts Cisco at the center of discussion.  Convergence solutions for both the network and full stack are becoming increasingly integrated, with server and desktop virtualization forcing functions for the evolving role of an IT manager.

For Cisco in particular, its convergence solutions introduce new operational models, with the company’s new take on FCoE making it a high point of interest.  But for Cisco, helping other organizations restructure their storage and networking solutions is a big part of its own restructuring, as the company faces critique and concern over its current role in shaping converged networks at this still early stage.

Is Cisco’s current solution enough?  Network and storage equipment providers like Cisco, NetApp and EMC are dealing with bandwidth and data management issues, and the question of how convergence should be approached led to a rather heated discussion at SNW, outlined in a Computerworld article.  The disparities between network and storage are longstanding, and still encouraging of a viable solution.

Stu Miniman, a Senior Analyst at Wikibon and a moderator at the SNW panel where this heated discussion took place, offers his own recap, noting that “what was not captured in that article is that the “heated user” also said that he believed that this transition from FC to Ethernet was inevitable, but that a slow adoption fits his large organization (and most know that his Redmond, WA based parent company has been challenged in recent years to move fast).

“We are definitely still at the early side of the adoption curve of both FCoE and converged stack solutions like NetApp/Cisco FlexPods and VCE Vblocks.”

It’s a big opportunity for Cisco, but its position within the converged networks industry also redirects attention to another longstanding question about its business practices–how involved will Cisco become on the storage side?  While Cisco’s primary focus is on switches (it still owns this space), the company’s added storage solutions to its product offerings within the past few years.  The move has made competitors of old partners, like HP and Dell.  But decade-old rumors of Cisco abandoning its close relationship with EMC have been reignited, also brought on by CEO John Chambers’ company-wide memo acknowledging that Cisco’s lost its edge.

Though these rumors are being revisited, a full-on entry into developing and selling storage arrays doesn’t seem to fit with Cisco’s larger goals, especially those new missions set forth by Chambers’ memo.  Cisco will become a nimbler company, hoping to avoid the fate of that Redmond-based company that’s also been slow to change in a rapidly mutating market.  Now may not be the time for Cisco to expand into additional arenas, but rather to “double down” on their core markets, even shedding the perception of a large conglomerate going after adjacent markets.

This may be a retreat from Cisco’s initiatives proposed last year at Cisco Live, though it shouldn’t be expected that Cisco entirely abandon its side projects.  It was during the Cisco Live event last year that Miniman recapped on whether or not Cisco’s ongoing changes were good for customers, already noting the shift towards converged networks and Cisco’s inability to fully address customer demand.

“This is a lot of change for customers to swallow and while Cisco has a large and loyal install base, it is of network people.  The boundary between the server decisions and network decisions are blurring with virtualziation, but not fast enough or in enough accounts for Cisco yet,” Miniman writes.

“Their partnerships with VMware, EMC and NetApp give them more access into the data center customers, but still not to the server decision makers. IBM, HP, Oracle and Dell all have deeply entrenched relationships with company CIOs and application heads and a very robust channel and ecosystem.”

This all puts Cisco at a crossroad, and there’s little to conclude until Chambers offers more specifics on his new goals for the company.  Dave Vellante, founder of Wikibon, estimates that “HP and other competitors such as Juniper have some disruptive momentum that will continue. At the same time, Cisco will be willing to take a margin hit to maintain customers – and if it gets aggressive that will resonate with many clients.”

In all, it’s good news for customers, as pricing, terms and services are likely to improve in the near term, even in an increasingly competitive market.  Vellante goes on to note that this trend is likely to continue across the enterprise, with the IT business in particular becoming “oligopolistic where a few large suppliers (IBM, HP, Oracle, EMC/VMware, Microsoft, Intel) basically control the playing board and moves by one creates near-immediate reaction by others. Current moves on the chessboard involve higher degrees of vertical integration (e.g. oracle, IBM and HP), better pricing (HP/3Com), greater simplicity (VMware), etc. These are good and positive trends.”