In this blog I look beyond the obvious and try to find out why people and companies do what they do - and what it means for the rest of us. 
I have entered the Twitter experiment. To be completely candid, I think that there is a better than average chance this will end up a big mistake, as the LAST thing I need (and hopefully you too) is a new means of availing myself to spammers. However, I've been yelled at enough to the point where I am now official.
If you want to follow along with my exploits, by all means do so – i'm "Stevedupe" in the land of tweets.
I promise not to tell everyone when I am going to the bathroom, unless of course something funny occurs while doing so.
I joined Friday night but I waited to see if anything of interest came about on the big Cisco announcement today (http://www.enterprisestrategygroup.com/ESGPublications/BriefPopup.asp?ReportID=1181) on Twitter. There was a ton of activity – mostly wrong, mostly junk, but a ton nonetheless. Thus, I shall see if the medium holds merit for those of us who care about such things, or bail out if it becomes a nuisance.
My take on Cisco – way smart, way interesting, and way out there. How much it will matter to HP and IBM – who they really must have irritated with all of this - depends on how they price the stuff.
I know this – VMware couldn't be any happier about it – and why not? They need to get moving towards ubiquity – and having a purpose built hunk of iron like this will only help their cause.
Back to Cisco – why not do what they did, but at the same time announce the form factor as a standard and let HP and IBM etc. build blades that fit the box? I can't imagine Cisco really cares about selling Intel chips that much, and since the value appears to really be in the collapsed unified networking and overall packaging, who not let your former best friends come along for the ride?
They are a machine to be reckoned with. They had a lot of big players along for the ride – EMC, VMware, Microsoft, Oracle, etc. It was well played really. I'm most curious to understand the way it's priced, because conceivably, dumb pricing might actually push people away and back to IBM or HP.
IBM sells a billion bucks worth of Cisco a year – plus all the services and things it drags with it. I figure they probably make 20% GP anyhow on the branded resale business – so that's $200+ million a year right to the bottom line. They sure aren't gonna be happy about a new server competitor, but will they be so pissed that they walk from that dough? I don't think so – at least not in the short term.
HP on the other hand, is different. They have their own ProCurve networking gear – at least for edge switching – that costs half of what Cisco charges. I'm fairly confident we'll see them go full bore away from Cisco whenever they can, and I can't blame them. The C-class blades have been kicking butt and this sure won't help things along.
The IGS and EDS plays are wildcards – this stuff is built for the "next" data center – not so much as a replacement as far as I can tell, and IGS/EDS are likely candidates to be brought to the table for such discussions. If both of them hold positions of influence, they could put the old Heisman up to Cisco's forehead (stiff arm block).
Will be interesting for a while no matter what.
Which gets me to my Saturday night. Went to see comedian and former Bostonian Louis C.K. at the craphole known as the Orpheum theater. He might be the funniest person I've seen in many, many years. Anyone who can call his 5-year old an asshole and be funny about it is OK in my book. Louis tweets also, fyi. I don't think he follows me yet, however.
Related posts:
blogs
So whats your point that makes you asert that everyone else on twitter was wrong?
I don’t see any clear analysis here except you notion that IBM and HP wouldn’t walk from the services revenue that Cisco brings.
—–Hi Mark, not everyone on Twitter was wrong – but most early tweets didn’t understand the overall announcements nor its potential ramifications. I merely suggest that early speculators who might not have been fortunate enough to have heard the details in advance weren’t able to piece together the full picture. I contend that while Cisco is selling blades – this isn’t about that – it’s a SYSTEM play with much more than just blades. It’s a data center in a box, and has ramifications all across those who partake in the current data center architecture.
In the hope of furthering consolidation, Cisco have put themselves in a path to compete systemically – not just on blades.
Finally – it’s not the service revenues that are the killer consideration – it’s the actual product revenue (more specifically -the margin associated with it.) Services drag other kit, so there will be a loss there certainly, but it’s hard to quantify that amount.
Cheers – Steve
C.K. is no Carlin, but he has managed to take ordinary observations about his own family (things many of us have thought in the past) and turn them into a funny stand-up routine. Having written that, he sorely needs new material.
I share your distaste for Twitter. It’s 95% noise…as you will discover…and painful to find the nuggets of value.
On topic, I wonder about the impact if EMC and Cisco decide to tie the knot over the next 12-18 months.