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Cisco's Year of Storage Acquisitions

In the twelve months that passed between the start of summer 2004 and last week's departure of several storage networking execs, Cisco made a series of acquisitions that furthered its storage aims. First came Actona in late June 2004, then Topspin in April, and FineGround in May.

In the context of the networking giant's 13 other acquisitions in the same period, the three represent only a small part of Cisco's acquisitions. But three related acquisitions by an industry heavyweight are reason enough for storage watchers to sit up and take notice.

From outside Cisco, these moves might look like part of a grand storage networking strategy. "Part of an overall strategy for the data center," clarifies Jackie Ross, Cisco's vice president of marketing. The first part of that strategy was an expansion from the "front end" of the data center — Cisco's core IP routers and Ethernet switches — to the "back end," the storage network.

Cisco first got into storage switches with the spin-in of Andiamo Systems in 2002. Just last week, several of those involved in the development of Cisco's storage networking product line left Cisco, including chief development officer Mario Mazzola and senior vice presidents Luca Cafiero and Prem Jain. It's not yet clear how or if these engineering changes will affect Cisco's storage plans.

In any case, Cisco's data center strategy only begins with expansion into storage networking. The full vision is much broader, including providing a common networking infrastructure across the data center, according to Ross. And indeed, it reaches outside of the data center, with already-deployed FCIP SAN extension support in the multi-protocol MDS switch and WAFS technologies from Actona and FineGround.

“...They are opportunistically picking up pieces, but they haven't quite figured out what they want to be when they grow up in storage.”

— Arun Taneja

Analysts don't see a strategic picture emerging from these acquisitions. "They don't necessarily tell a cohesive story as to what the storage strategy is for Cisco at the moment," says Arun Taneja, founder and consulting analyst at the Taneja Group. "My thinking is, they are opportunistically picking up pieces, but they haven't quite figured out what they want to be when they grow up in storage."

James Opfer, research vice president at Gartner Research, believes that Cisco's strategy can't be determined from its acquisitions alone. "I don't think you can see [a strategy] from the acquisitions, but you could put together something that you might believe is a strategic direction, which is to get a presence in the data center, and to connect up to that data center from remote locations," Opfer says.

What Acquisitions Bring

Actona WAFS technology gives Cisco a branch-office data consolidation solution. "It's a WAN optimization technology, so that you can access the applications that may be stored in a central data center at wire speed," explains Ross.

According to Ross, the technology is a practical approach for moving branch office information back to the data center. "Instead of having individual file servers at the branch, you could consolidate into a NAS filer in the data center," she says.

The Topspin acquisition completes the data center switch picture, with Topspin's InfiniBand switches adding server cluster switching to go along with Cisco's existing storage networking (MDS, with Fibre Channel, FCIP and iSCSI) and Ethernet (Catalyst) switch lines. And even further along the road to a common networking infrastructure, Topspin brings in Ethernet to InfiniBand and Ethernet to Fibre Channel gateways. Says Ross, "The Topspin switch brings the gateway to IP, so Catalyst connectivity, and the gateway to Fibre Channel, so MDS connectivity."

Acquiring Topspin also brings Cisco into the server virtualization business, with Topspin's VFrame server virtualization software. Ross calls VFrame "a very important portion" of the Topspin acquisition, and notes that virtualization plays an important role in Cisco's long-term vision for the data center.

FineGround gives Cisco secure application acceleration technology, but FineGround had also debuted a single-box WAFS product shortly before its acquisition. FineGround WAFS technology complements that brought in by the Actona buy, according to Cisco's FineGround/WAFS team. FineGround single-box Velocity-FS provides file access over HTTP and is being positioned as a remote access offering, while Cisco's existing WAFS technology is seen as the site-to-site solution for providing CIFS and NFS file services across the WAN.

It's apparent that Cisco views WAFS as a significant technology, a new avenue of centralization for businesses looking to address continuity and compliance concerns. "We're seeing this push toward centralization of the storage, and now this is not just SAN attached, but NAS attached as well," says Ross.

Fitting the Vision

Ross describes Cisco's data center strategy as having three phases: consolidation, virtualization, and automation. The last of these is a far-off goal, an intelligent network guiding the provision of network resources automatically, based on policy. Current acquisitions don't much affect this target, but they further Cisco's progress in the earlier phases.

The consolidation phase seems well under way, with Cisco offering infrastructure components for storage networking, for IP networking, for server clusters, and the means to tie it all together across long distances. WAFS, and therefore the Actona acquisition and to some extent FineGround, fit in with Cisco's consolidation efforts.

"The glue that ties these platforms together is a common set of intelligent services," says Ross. "Whether it's an MDS SAN switch, whether it's a Catalyst 6500, whether it's a server fabric switch from Topspin, the common set of intelligent services include the multi-protocol capabilities, the ability to do quality of service, it includes security, and it includes management."

Achieving a common set of services may be more difficult when you start with diverse products gained through acquisition. But Taneja thinks the goal is reachable, especially given the company's history of successful integration of acquired companies. "If somebody knows how to do that, it's Cisco," he says. "They are a sharp company, and I think they are very capable of making some kind of universal API over time, but it is not a slam dunk by any means."

The virtualization phase is less far along. "The vision is you would be able to have a pool of networking, storage, and server resources that you could dynamically allocate as required," says Ross. Currently, virtualization tools are platform specific, including VSAN on the MDS switch. Topspin's VFrame software adds server virtualization to Cisco's virtualization capabilities.

Market Targets

Cisco's technology direction is relatively clear. But what of the company's strategy in the storage market, which it entered with Andiamo? In 2003, Cisco was discussing a billion dollar presence in storage five to seven years after entering the market.

"Their initial aspirations were a little naïve," Taneja says. "Since then I've seen a lot more sanity, at least in terms of expectations. Over the last twelve months, things have been more consistent with how the storage market is and what Cisco's presence within that is."

Still, Cisco may expect more from storage than it has seen to date. "In the sense of competitive position, their storage products are doing very well," says Opfer. "Whether the total volume or the total market size met their earlier requirements or desires, I have no idea."

"In the grand scheme of things, those revenues are not what Cisco has been aspiring for," says Taneja. He doesn't expect Cisco to see a billion dollars in revenue from storage in the near future. "The only way that's going to happen is through a massive acquisition. Whether or not that's EMC, I don't know," says Taneja, referring to recent rumors of a Cisco-EMC deal.

For more storage features, visit Enterprise Storage Forum Special Reports