Cisco is unfazed by the realization that FibreChannel over Ethernet, the storage virtualization technology it helped define, standardize and evangelize, is essentially being given away for free. FCoE is designed to help unify a data center switching fabric by converging FibreChannel storage traffic over Ethernet, thereby saving the expense and operational complexity of running separate cables, deploying separate NICs and, eventually, SAN switches.
Currently, FCoE is a single hop technology at the server access level. Servers with converged network adapters - those running FibreChannel over a single 10G Ethernet port - connect to a top-of-rack FCoE switch, like Cisco's Nexus 5000, or Brocade's 8000 series or VDX boxes.
In a 10,000 sq. foot, 1 megawatt data center, FCoE can save about 40% of the cabling just in that first hop alone, says John McCool, Cisco senior vice president and general manager, Cisco's Data Center, Switching and Services.
But FCoE, to the surprise of analysts and other industry observers, is being given away for free by leading adapter and switch vendors due to immaturity and market inertia. The virtualization technology is virtually the same price as a naked 10G Ethernet port, which undermines claims of high demand for FCoE - it's essentially getting a free ride from 10G.
Cisco still charges a license fee for it and so does Brocade, on its new VDX switches. And McCool, who we spoke with at last week's Cisco Partner Summit, says the freebie aspect aligns with Cisco's strategy of offering services on top of port speed increases:
"Our networking business has always been driven by transitions. People typically think of them as port speed transitions but every time there's been a port speed transition, there's also been additional value. There's always been a value enhancement that's gone along with those transitions. So when you think about the move from 1G to 10G in the data center and how it moves beyond, the value driver there is not only the port performance but the ability to really structure a network around a large number of virtual machines, and storage is a huge component of that -- being able to unify both block and file drives the value of that 10G port, which has been the success that we've seen with the Nexus family."
Cisco has seen an FCoE "attach rate" of 30% on its Nexus 5000 switches. And the company's pleased with the broad support of FCoE among silicon, adapter and switch vendors, even though it returns little or no revenue in return.
McCool takes issue with that last point though. He says much of demand for the 10G Nexus 5000 and 7000, as well as the company's MDS SAN switches, is driven by FCoE. The Nexus 7000 is on a $1 billion annual run rate:
"The people that use 7000s and 5000s to carry storage traffic, that's an overall increase in the available market opportunity that we have for the 7K, 5K, as well as MDS (SAN switch). This has been very good for the MDS product line as well as this whole view of convergence comes together and people start to invest."
Again, it goes back to Cisco looking to "fuse" everything onto the network. Storage, security, WAN optimization and application acceleration appliances, all virtualized to run as a service over an Ethernet/IP network. Value in virtualization.
It's as if Cisco is trying to virtualize its SAN, security and Layer 4-7 competition.
"We don't look at these as segmented markets. We look at these as how we can enter into a market and how ultimately that market begins to fuse with the network technology. We've done that in the past with network services - the integration of service blades in the (Catalyst) 6500. We're taking that same approach with unified network services in the data center by running our WAN optimization product as a virtual machine on the (Unified Computing System) and ISR router. Basically, it's fusing that technology into the IP network. You'll see that as a basic approach from Cisco."
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