IBM net gear set to go Cisco

IBM users gird for change as Cisco takes over.

By Marc Songini
Network World, 09/06/99

When it comes to installing large networks, IBM has a new message for customers: Go Cisco.

In a dramatic turn of events, IBM last week said its Networking Hardware Division (NHD) was getting out of the switching and routing business.

A number of users admit they are nervous about what type of support they will be getting from IBM as a result of the move.

One IS manager at a large insurance company, who asked not to be identified, fears there will be a mass exodus of NHD's best talent, which will leave him without adequate service and support for his IBM 2216 routers. "This is huge for us," he says.

His company has a network anchored by 15 IBM 2216 routers and hundreds of Cisco routers. To simplify managing this net, the IS manager had already been considering taking the IBM routers out of the network and making it an all-Cisco net. This announcement will probably hasten that initiative, he says.

"I'm not sure exactly what IBM selling its patents to Cisco is going to do," says Ken Mangold, an IS manager at J.B. Hunt, a transportation firm based in Lowell, Ark. This is just another example of how IBM has been reshaping its role to become an OEM supplier, Mangold says.

IBM will still maintain a data center presence with its mainframes and midrange servers, Mangold says, but now they'll be attached to Cisco switches and routers rather than channel-attached boxes made by NHD.

IBM's response

For their part, IBM executives tried to reassure customers that the company was not skipping town on them. "We will try to exit gracefully over the next 12 months. We will continue to maintain the product for as long as customers want," says Michel Mayer, general manager of NHD.

In the meantime, IBM will fulfill all existing sales contracts and continue the production and improvement of its current switching and routing lineup for the next year, Mayer says. Support and service will continue for another four years or so. For those who don't want to migrate to a Cisco platform, Mayer says IBM is willing to help customers go to other vendors.

"IBM always had strong communications technology and seemed to be moving ahead in the high-speed Ethernet and ATM areas, but had been hampered by the lack of a strong sales focus," says Donald Haile, an IS manager at Fidelity Investments, a Boston financial services company. Haile is a former NHD chief executive, and he believes Cisco got a very good deal for the money it paid for the patents.

Some observers have taken a dim view IBM's business acumen. One net executive who requested anonymity says the product lineup was actually pretty good. "The company started to come out with some home-grown products that meet the market's needs and started to show a real technology lead at a good price point."

But he says NHD "could neither understand how to market network hardware as a real complement to the server platforms it succeeds with day in day out, nor did the company have the desire to succeed in corporate networking land."