Will EMC and VMware Survive the SDN and Converged Systems Threat?
Cisco and VMware have, over the last few months, launched diametrically opposed SDN, or software-defined networking, strategies. Cisco's SDN strategy involves Application Centric Infrastructure, or ACI, which is a hardware-centric approach to data center network programmability. VMware's NSX, on the other hand, involves network virtualization through all-software network overlay technology.
When it comes to storage solutions, EMC and its subsidiary, VMware, offer federated (stand-alone) point solutions. The industry trend over the past few years has, however, been leaning more toward converged systems. Large OEMs such as IBM and HP are increasingly offering a broader capability across the stack in the form of converged solutions, instead of point products.
Investors were alarmed that Cisco chose to work with Red Hat instead of VMware in its KVM server hypervisor project, despite the fact that the two have been working together on the Virtual Computing Environment, or VCE, project since 2009. How big are these threats to EMC and VMware?
Cisco and Red Hat partnership
Red Hat is collaborating with Cisco to offer customers an ACI that is integrated with RHEL, or Red Hat Enterprise Linux, OpenStack platform, which can be defined as open SDN.
Cisco gave several reasons why it preferred working with Red Hat and ACI instead of VMware's NSX. These can be summarized as:
- VMware's pricing model is flawed. This raises operational expenditure costs and affects key network design decisions and scale.
- Many aspects of VMware's architecture require vendor lock-in. VMware is the only hypervisor platform that locks customers into a proprietary controller. Other platforms such as RedHat, Hyper-V, and KVM provide open access.
- NSX's openness is rather limited. This means that the breadth of infrastructure, orchestration models, and OS platforms that it can support are limited. ACI, on the other hand, supports any hypervisor and encapsulation models.
- NSX's ability to scale is limited. This means that the platform will eventually reach the same limits as other software emulations running on the hardware.
- The NSX abstraction model reduces visibility and requires separate management of two infrastructures: the virtual and physical. It also requires management of individual nodes. ACI provides the flexibility of the software overlay and combines it with the performance and visibility in hardware.
Some of Cisco's reasons look quite valid. But, people should not forget that SDN is still a young technology and there are many varied strategies that can be used to deploy it. Most vendors will end up leveraging what they are good at in their SDN approach. For VMware, that will mean bringing networking into the virtual world and de-prioritizing focus on hardware.
For hardware heavy hitters such as Cisco, SDN will mean integrating the underlying physical infrastructure while still leaving room for network virtualization.
The IT world is heavily segmented, and each company has different needs based on whether its top priority is network, security, systems, storage, development groups, and so on. Ultimately, choosing between these radically different SDN strategies might boil down to the technology comfort level of the development teams with each strategy.
Network engineers are likely to be more comfortable with Cisco' hardware-centric model. One of the main pillars of Cisco's ACI strategy is the Nexus 9000 series switch line, which runs a simpler version of Nexus operating system, and with which many networking engineers are already familiar. Systems engineers, on the other hand, are likely to be more comfortable with VMware's vision of the future and promise of network virtualization.
Cisco ACI is likely to appeal strongly to data centers and large enterprises that consider port density a significant driver. The combination of merchant and proprietary silicon allows for very competitive per-port pricing on the 9000 series.
But, the big caveat here is that few enterprises, including many large ones, will need that level of port density. This is where NSX wins, since it requires no upfront hardware upgrades.
What about converged systems?
Converged systems are here to stay. Building a converged system requires several hardware and software components for networking, servers, and storage. EMC actually has a good amount of these: it has storage hardware and software, networking software (from VMware's Nicira), and server virtualization software. What it lacks is server and network hardware.
EMC will, at some point, have to consider partnering with an OEM, quite possibly like the Taiwanese white box manufacturer that builds servers for Facebook's Open Compute Project. Such a combination would give Cisco's UCS servers a run for their money.
For networking hardware, EMC might collaborate with a company like Brocade.
VMware's software-centric SDN approach is not inherently inferior to Cisco's hardware-centric approach. Networking engineers may prefer Cisco's ACI, while systems engineers might prefer VMware's NSX, which is also preferable for enterprises with low port density needs.
Ultimately, EMC will have to partner with an OEM and networking hardware companies to help it build converged systems and keep up with industry trends.
Are you ready to profit from this $14.4 trillion revolution?
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.
The article Will EMC and VMware Survive the SDN and Converged Systems Threat? originally appeared on Fool.com.Joseph Gacinga has no position in any stocks mentioned. The Motley Fool recommends Cisco Systems and VMware. The Motley Fool owns shares of EMC and VMware. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.