Detente in Cisco/IBM "war"?

Despite blade server stand-off, article suggests IBM will still sell "large quantities" of Cisco gear

Buried at the end of this Marketwatch story on Cisco's upcoming earnings is a quote by a securities analyst to the effect that IBM will continue to sell a significant amount of Cisco product despite the networking giant's invasion of IBM's data center server turf. IBM sold about $1 billion worth of Cisco gear in 2008 and the analyst, Samuel Wilson of JMP Securities, sees no reason for that to abate, according to Marketwatch.

Wilson says IBM is focused more on software than hardware, as indicated by recent acquisitions like the $1.2 billion offer for SPSS. This is a good sign for Cisco, the story asserts, and perhaps for IBM as well.

Quoting Wilson from a recent report he authored, Marketwatch states:

"Based on its software acquisitions, we doubt that IBM wants to enter a full-fledged war against Cisco the way that H-P has thus far."

Indeed, Cisco has sent signals that it expects a standoff with H-P now that it's encroached on H-P's blade server turf as well, with the introduction of the Unified Computing System. H-P plans to build out its ProCurve networking arsenal to take the battle with Cisco to the front lines.

IBM has taken a more conservative and measured approach to Cisco's toe-stepping. While not cutting Cisco out completely, it has established OEM relationships with Cisco rivals Juniper and Brocade. But IBM has also agreed to resell Cisco's Nexus 5000 FCoE data center switch as well.

So little by little, IBM seems to be extracting Cisco from some of its larger data center opportunities. Then again, it can't conduct a full extraction because some customers will still demand Cisco product.

So IBM still needs Cisco; and Cisco still needs IBM. It's one of those, "I love you but..." relationships.

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