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Is Insieme inserting Cisco into storage?

Track record of spin-in founders points to new markets, not existing ones; follows trend of IT titans wanting to own the whole stack

Everyone outside of Cisco and Insieme is still speculating on what the Cisco spin-in is developing to augment its parent's programmable network strategy. Some of the speculation had Insieme building the next-generation Nexus boxes with programmable hooks to a Layer 4-7 controller...

But other hypotheses have Insieme building the only piece Cisco's missing in data centers and IT: storage. And this speculation seems to make more sense now when you consider Cisco's dominance in networking and building momentum in servers and virtualization.

And this is another sign that the days of the VCE coalition and alliance between Cisco, EMC and VMware may be numbered.

With VMware buying Nicira and EMC aligning itself with server vendor Lenovo, it's becoming apparent that the titans in IT are not content partnering with other titans. See Cisco getting into the server business and alienating partners HP and IBM...

So those titans are filling in the missing pieces: EMC with Lenovo servers, VMware and Nicira network virtualization, HP with 3Com and OpenFlow, IBM with BLADE Network Technologies and OpenFlow, Oracle with Sun and Xsigo... and Cisco with Cisco ONE and perhaps with storage arrays built by Insieme. Partnerships are temporary; the data center/cloud giants want to own the infrastructure. Period.  Servers, storage, networking, virtualization, and some, applications. InformationWeek's Art Wittman also lays out this scenario.

"That (Cisco/EMC) relationship was a tough relationship," one source says. "It's been there because of the sheer will of the people at the top. At some point, that will starts to crumble. I don't know how this Nicira acquisition and VMware's big intentions of getting into the networking space are going to be taken by the other networking vendor. And EMC announcing Lenovo as their partner for servers is going to be taken by their server partner Cisco."

It would not make sense for Insieme to re-invent Cisco's switching dominance - 70% of a $21 billion market. Cisco needs to tend that installed base and ensure recurring $14 to $15 billion annual revenue from it, not disrupt it with a next-generation platform from a spin-in start-up.

Besides, Insieme's founders have always developed products to insert Cisco into new markets and gain new share, not upgrade and extend share in existing ones. Those founders got Cisco into SANs with Andiamo Systems, and purpose-built data center switching with Nuova Systems; we now believe Insieme could be building network-centric storage platforms to fill out Cisco's IT infrastructure "stack" and compete head on with EMC and NetApp, and the other IT giants.

And perhaps drive the final nail into the VCE coffin, despite the business-as-usual reassurances from coalition parties.

"It's no longer the ideal order of 2000, where you're the networking vendor, I'm the server vendor, you're the software vendor, you're the systems integrator, and we work together to scratch each other's back," our source says. "It's all-out war because everybody wants to become the infrastructure provider, the vertically integrated big infrastructure company.

"All those alliances, all those lines are up for re-draw," he says. "Those business constructs are up for renegotiation."

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