Will 'Collateral Damage' Destroy VMware-Cisco Relationship?
"We're going to do everything in our power to continue to build the partnership we have with Cisco," Gelsinger said. "We've had great success in many areas with them. NSX is going to be a great platform for Cisco infrastructure. I'll point out that the customers we had on stage [at one of the VMworld keynotes]--those are big Cisco customers running NSX in their Cisco environments. "That's going to be our continuing focus for the NSX platform. Every API, every SDN service, every programmatic interface that they provide, will be taken advantage of in NSX. Because the more value that they deliver in a programmatic way through the infrastructure, the more value we can give to our shared customers. "We're not going to stop in the pursuit of that innovation," Gelsinger said. "This is like ESX in 2004; we see at least a decade of innovation in front of us." 'Collateral Damage' Takes Its Toll"This all showcases the collateral damage that you need to consider when you move into an adjacent area," Enderle told eWEEK. "The first major collateral damage [affecting Cisco] was back with HP, when it went from a stealth network provider to being a massive, major competitor (after buying 3Com) that Cisco hadn't faced before. If you look at Cisco's stock performance, pretty much since they (HP) started doing this, they went flat. "That's the difficulty here. As they expand out, the collateral damage companies do to partnerships, relationships and their core businesses may exceed the incremental revenue they get going into that secondary business," Enderle said. As VMware and Cisco bump heads, he said, VMware is more likely to hook up more tightly with somebody else--a Cisco competitor or a vendor that develops its own hardware. "Remember, a company that was designed and built around software is probably going to be better at building and selling software, which is where the market's going in the software-defined space," Enderle said, "and it puts Cisco at a disadvantage as the market converts." VMware, Cisco Still Have a Lot to Gain King told eWEEK that he doesn't see a VMware-Cisco breakup anytime soon because they have so much to gain by working together. "Cisco's been under pressure from any number of traditional companies, vendors that it's partnered with for years, without anybody stepping on anybody's toes," King said. "HP's acquisition of 3Com a few years ago was the first major step in that direction. IBM acquired its own network switch; Dell's doing the same thing. Oracle's got a switch, and so on. "VMware is pushing really hard right now in the direction of the software-defined data center," King said. "What we're seeing is what were once specialized vendors getting into one another's businesses." "This is an issue of sensitivity for Cisco, and so many of its enterprise customers are heavily invested in VMware, that I can imagine there would be tension. But I also can't imagine that there would be any break between them."
eWEEK then asked a pair of respected veteran IT analysts for their takes on all of this: Rob Enderle of Enderle Group and Charles King of Pund-IT.