After years of vowing that it would never get into the disk business, Cisco Systems Inc. has announced an OEM agreement with EMC Corp. to resell its Celerra NAS products.
Right now, Cisco is limited to selling EMC's NAS products with its File Engine wide area file services (WAFS) technology, but the announcement hints at much more ambitious plans from Cisco down the road.
File Engine is Cisco's appliance-based product that uses WAFS, an emerging technology that gives users LAN-like performance for accessing central files from remote locations. Cisco picked up this technology with the acquisition of Actona Technologies last summer. Combining File Engine with NAS from EMC will give users an integrated offering to consolidate branch office data into the data center, according to spokespeople from both companies.
"Customers wanted the whole thing dropped in and supported from a single, established vendor … That way there's no finger-pointing if it goes wrong," said John Webster, founder and analyst with the Data Mobility Group. "You don't drop emerging technology in on top of critical applications without there being enough support." He added that WAFS could stretch to offices coast-to-coast and potentially across different countries, which would require a vendor with global scope to support such an offering.
Rocky Cheung, a network administrator with engineering firm Vanasse Hangen Brustlin Inc., is in the process of implementing 15 Cisco File Engines and is open to including EMC NAS as part of his set up. "We already use EMC and we will probably need large disk storage on the backend of our WAFS network at the central office … NAS might be our next step, but we have limited information about it at this point … I personally prefer a single source relationship as the vendor is usually more dedicated," Cheung said.
The offering will be sold and supported by Cisco directly and through its worldwide channel beginning in the second quarter of this year. Future implementations will provide a single management interface between the two products, but neither company would give a timeline for this. The OEM agreement includes the EMC NS500 and NS700 boxes that support Fibre Channel or ATA disk drives and all the associated software including replication, snapshot and RAID products. Cisco has not decided on a brand name for its version of the NS series yet.
Cisco's game plan
Arun Taneja, founder and analyst with the Taneja Group, said he believes that Cisco will ultimately end up manufacturing its own line of NAS products. "The reseller deal is a first step and part of a learning process, but Cisco wants to make storage a much bigger part of its business … Within two years I wouldn't be surprised if it didn't own this technology," he said.
When Cisco entered the storage market in 2001 it boldly stated that its goal was to reach a $1 billion in revenue, which analysts rightly pointed out would be impossible if it only sells switches. This entire segment is worth just a little over $1 billion, and Cisco only has 14% of it so far.
However, the networking giant is treading a delicate line. Today it relies on OEMs like EMC and IBM to resell its switches, and without these deals it would have no presence in the market. Entering the disk market would mean competing with these partners, which is obviously a precarious position to get into. EMC has been selling the Cisco MDS storage switches since 2003 and its up-coming Storage Router uses an MDS switch. Cisco reselling EMC's storage is a logical extension of this relationship, but still doesn't get the company up to that $1 billion revenue goal. Some industry insiders speculate that Cisco and EMC might eventually merge, which given the current M&A activity in the tech sector isn't totally out of the question.
Cisco will work with other NAS players
Meanwhile, Network Appliance Inc. (NetApp), the market leader in NAS, must be kicking itself as it began some NAS work with Cisco some time ago, but this appears to have fizzled out. In an e-mail statement, Network Appliance said: "Many parts of storage networking remain emerging segments, and we are carefully planning our own partner strategies for those." The note added that NetApp's products are interoperable with Cisco's WAFS technology and that Cisco's non-exclusive reseller relationship with other storage vendors does not preclude a future reseller relationship with NetApp. Today NetApp sells its NetCache product, but this is old and archaic next to WAFS technology.
With EMC and Cisco now firmly behind WAFS, it is likely to shift from being an emerging technology to an important new market. Coincidentally, Riverbed Technology, another WAFS vendor, announced this week that it has secured $20 million in Series C funding. Goldman Sachs, Accel Partners, Lightspeed Venture Partners and UV Partners who participated in the company's first two rounds of financing stumped up the latest funds. Riverbed's total funding raised to date is $37 million. Other vendors selling WAFS wares include Tacit Networks, Signiant Corp. and Disksites Inc.