Go Big or Go Home
I thought I would re-visit my cathedral-builders blog, since a couple of interesting stories popped up this week.
For starters, Nick Lippis posted a well thought out blog on his short list of cathedral-builders (Cisco, HP, and IBM). Yes, I know I have a bias, but these three companies would be my top 3 as well. I think all three companies have the correct blend of vision and completeness of footprint. If I were to add a fourth, it would probably be either Oracle or Dell–both companies are certainly working hard on carving out a broader role.
Over at Gigaom.com, Gary Orenstein pondered if networking would become the final area of differentiation in the data center. Certainly, I am not going to be upset if networking capability becomes the primary point of differentiation between Cisco, HP, and IBM :), but, sadly, I don’t think it will be that simple. I do, however, think he brings up an interesting dynamic for product vendors (the brick sellers in my original post). If networking becomes a key point of differentiation, I don’t think the current arms-dealer approach of selling their wares to everyone and anyone will fly any longer. If you are selling bricks with no compelling differentiation, then I think your business gets commoditized and the profit is driven out of it. On the other hand, if you do have compelling differentiation, then I think you get get snapped up by one of the cathedral-builders to give them a point of differentiation in the broader data center battle that Gary talks about.
All, of which, perhaps helps explain the reports that surfaced this week that Brocade is shopping itself around. This type of chatter usually makes customers nervous (often with good reason), but in the scheme of things, I can see why Brocade would want to take that risk and leverage its Fibre Channel expertise to find a home with one of the cathedral-builders in the market.
Anyway, I think it will be interesting to see what evolves over the next 12-18 months–how the cathedral builders flesh out their portfolio and what happens to the remaining brick sellers.
Disclaimer: These are my personal musings. Please don’t take this as an indication of any potential M&A activity on Cisco’s part. Trust me, I am the last one they would tell.