Chambers declares war on VMware

A pedestrian walks past the Cisco logo at the technology company's campus in San JoseCisco CEO John Chambers has declared war on VMware. In a recent call to the financial analysts he termed VMware “enemy number 1 for Cisco” and vowed to “crush” VMware’s software-defined networking (SDN) product, NSX, in the market, said Wikibon Principal Research Contributor Stuart Miniman in a discussion on theCUBE from IBM Edge this week (see video below). For users this means choice and competition in the market that they can leverage to get better deals and service from the vendors.

According to Business Insider, Chambers told a group of financial analysts recently that Cisco’s Application Centric Infrastructure (ACI), is already having a positive impact on CIO mindshare. He predicted that Cisco will take back the customers it has lost to VMware since its purchase of software-defined networking (SDN) pioneer Nicira a year ago and its subsequent introduction of NSX based on Nicira technology. Miniman said he heard the “enemy” quote from several sources.

This is strong language considering that Cisco is closely allied with VMware parent EMC in VCE, the leader in the converged infrastructure market. VMware also is an important part of VCE, and while the company ships several configurations of its software about 90 percent are shipped with vCenter installed. VCE is a major growth generator for all three companies in a market in which more traditional hardware growth is stalling, and Chambers obviously does not want to upset that arrangement.

Lenovo & VMware


VMware, meanwhile, is making its own market moves, including apparently developing contacts with Lenovo, which is buying IBM’s x86 hardware business. This includes its System x servers, network switches and PureFlex, the x86-base portion of IBM’s converged system line. Lenovo and IBM have announced a close partnership as part of the transfer of IBM’s System x business to the commodity hardware manufacturer. IBM will introduce Lenovo to its x86 customer base and partners and comarket the Lenovo hardware with IBM’s software and services both to its existing customers and to potential users in the fast growing Chinese marketplace, where Lenovo will be the leader in the partnership.

In recent years IBM’s x86 line has been losing server marketshare. “Cisco is eating the high end of the market, and Quanta has been eating the entire market,” Miniman said. Lenovo, which bought IBM’s PC and laptop business several years ago and has grown it to become number one in the market, is widely expected to push aggressively to become the number one supplier of commodity x86 servers. “Lenovo will attack Cisco with lower-priced solutions in those data centers that aren’t the five biggest in the world and aren’t going to buy Quanta,” Miniman said.


A deal in the air


“What I hear from the IBM guys who are moving to Lenovo is the phone’s ringing” between Lenovo and VMware, Miniman said. VMware may be seeking some level of partnership with Lenovo. IBM has been using the open-source KVM hypervisor and the OpenDOVE software-defined networking product, which is part of OpenDaylight, internally, although whether Lenovo will adopt those as preferred solutions remains to be seen. Ultimately Lenovo will want to provide the hypervisor of the customer’s choice on its x86 servers, and in the West at least that often will be vCenter, so it will want a positive relationship with VMware.

A relationship with Lenovo that includes NVS could also help VMware against Cisco, which only offers ACI on its expensive Nexus 9000 switches. A commodity-priced network switch from Lenovo, a large, established provider, with NSX software and direct market support from IBM would be a powerful challenge to Cisco’s network dominance in the longer term. However, OpenDOVE may become a third choice. As open source products, KVM and OpenDOVE come at price points that are particularly attractive for commodity hardware providers, for whom pennies count.

Definitely battle lines are being drawn in the market, and CIOs should pay close attention to what the various players offer before placing bets. One major question is whether Cisco can continue to grow server revenue faster than the overall market with the reinvigorated competition that Lenovo brings. Users should short list both Cisco and Lenovo and use the competition to extract the best deal.

Cisco photo credit: REUTERS/Robert Galbraith
Pat Gelsinger photo at EMCworld 2011 courtesy EMC