Cisco reveals aggressive pricing for blade server system

Claims some configurations will cost as much as a third of what competitors charge

As promised, Cisco this week divulged more details on its Unified Computing System for data centers, including pricing and performance benchmarks.

UCS combines networking, blade servers and virtualization into an integrated system optimized for a unified data center switching fabric of LANs and storage-area networks. Its key benefits, according to Cisco, are embedded management, customizable service profiles and patented memory extension for scaling virtual machines.

It also features Cisco's entry into the blade server market with internally developed blade servers optimized for virtualization and the memory extension capabilities. The servers run Intel's new Xeon 5500 processors. (Compare Server products.)

Cisco says each UCS component – blade, CPU, disk, memory and I/O cards – is priced competitively with other leading server vendors' elements. Yet UCS costs about 10% less in a configured system due to its ability to converge host bus adapter and 10Gbps Ethernet network interface card capabilities, which eliminates about $725 in additional cost.

In a configuration of about 320 blades, UCS costs about one-third of leading vendors' systems due to a 10x reduction in the number of Ethernet and Fibre Channel switches, management modules and associated software licenses, Cisco says. The company adds that a leading vendor's 320-blade configuration cost $1.6 million vs. UCS's price of just over $500,000.

UCS pricing opened the eyes of some industry watchers. Cisco has a reputation of charging a premium for its products.

"Pricing surprised me a little bit – I thought they would be a little bit higher than that," says Zeus Kerravala, an analyst at the Yankee Group. "I find it a little hard to believe. I guess it shows the efficiency of having the network built in and not having all those external switches. It drives down the cost quite a bit."

UCS can also save users 40% in capital expenditures, 19% in cooling over a three-year period, 86% in the amount of cabling and 61% in rack space compared to a legacy 320 blade system, according to Cisco. In its own 1 megawatt, 10,000 square foot production deployment, the company says it saved 40% on cabling, fiber, patch cords and labor costs; gained 30% more power for servers; supported 50% more physical servers in the same space; and increased virtual machine support per kilowatt by almost fourfold.

In benchmark testing, Cisco says UCS was among the top ranked systems in VMmark and SPEC performance trials. Cisco says those results will be available soon. Cisco also says the memory extension capability of UCS allows the Intel Xeon 5500 CPU to access as much as four times the amount of memory as "typical" blade server systems.

This capability saves users 33% to 60% of the cost of memory in 64, 96 and 144GB configurations, and expands available memory to 192 and 384GB, Cisco says.

"This is what virtualization has been missing: the ability to aggregate memory and slice it per VM," Kerravala says. "I think there is a wave of server upgrades coming because of virtualization. The question becomes, how much of that market can Cisco capture?"

Cisco also said that claims of UCS requiring a forklift upgrade for data centers due to incompatibility with legacy systems, and that it can only work in virtualized environments are "myths."

UCS is in beta with 10 customers. It will ship later this quarter.

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