Cisco Systems on Tuesday unveiled its long-expected move into the high-end Fibre Channel switching market with a new set of fabric-class and director-class switches and the acquisition of a privately held storage start-up secretly funded by Cisco more than a year ago.
Cisco seeded that start-up, Andiamo Systems, in January 2001 as a developer of IP-based storage products but only early this year publicly announced its existence.
The vendor expects to pay as much as $2.5 billion to acquire the remaining portion of Andiamo it does not yet control, based on how sales of Andiamo products fare in the three months prior to the close, as well as Cisco's sales and market capitalization at the time.
Andiamo, which is located on the Cisco campus, and its 270 employees will join the Cisco Storage Technology Group when the acquisition is closed, company executives said.
Along with the Andiamo acquisition, Cisco on Tuesday also unveiled a series of Fibre Channel switches, signaling its entry into the SAN switching market.
The MDS 9216 is a modular fabric switch, with one fixed slot containing 16 2-Gbps Fibre Channel ports and an expansion slot for an additional module with either 16 or 32 ports. It is expected to be available next quarter with a base price starting at $29,995, said Bill Erdman, director of marketing for technology alliances at the company's Storage Technology Group.
The company also unveiled three director-class switches in its MDS 9500 family. They offer up to 1.44 terabits per second internal bandwidth, with density of up to 256 ports per switch and up to 768 ports per rack.
For high-availability infrastructures, the MDS 9500 switch can be configured with dual supervisor modules to offer redundant operation, Erdman said. They are compatible with Fibre Channel, iSCSI, and Fiber Channel-over-IP (FCIP) protocols and are ready for 10-Gbps Ethernet, he said.
The 9500's management software is embedded in the supervisor modules and offers Web-based access to the devices. No additional software licenses are needed, Erdman said.
The 9506 has room for six modules, which can be either one or two supervisor modules and any combination of 16-port Fibre Channel modules, 32-port Fibre Channel modules or 8-port iSCSI and FCIP modules. The 9509 has room for nine modules, while the 9513 has room for 13 modules.
The 9509 is expected to be available next quarter, while the 9506, 9513 and the iSCSI/FCIP module are expected early next year. Prices have yet to be unveiled for these products, Erdman said.
The Andiamo acquisition is just the latest step in Cisco's moves to become a storage vendor.
In July 2000, Cisco paid about $450 million for NuSpeed Internet Systems, Maple Grove, Minn., which eventually became the company's Storage Technology Group.
Since then, the company has shipped an iSCSI router and, most recently, an iSCSI router with Fibre Channel connectivity.
Cisco's push into the Fibre Channel market has the potential to hurt the market-leading position of Brocade Communications, analysts and other observers said.
Bill Yassinger, director of networking solutions at Forsythe Solutions Group, a Skokie, Ill.-based solution provider, said he is not sure what Cisco's move will do to Brocade, which he described as one of his company's best vendors in terms of relationships.
"There will be a negative effect on Brocade and McData because they have similar products," Yassinger said. "Cisco has such a tremendous marketing machine. But they will have to do some education of their sales force for this market."
Brocade has addressed issues such as storage security and vendor partnerships for several years, whereas Cisco is totally new to these issues, said Stephen Beer, director of product marketing at Brocade.
"Brocade brings a lot of training and support to the channel," Beer said. "We haven't heard this from Cisco. They still need to ready a lot of support to get into this market."
Actually, Brocade welcomes Cisco to the market, Beer said. "This is an acknowledgement and an endorsement that Fibre Channel will be a primary storage infrastructure in the data center," he said. "Cisco's stepping [up] and acknowledging Fibre Channel in a big way confirms what we have been saying all along."
Solution providers agree that Cisco's entry into the market is a plus for the industry as a whole.
Brad Wenzel, president and CEO of Wenzel Data, a Stillwater, Minn.-based storage solution provider and Cisco partner, said Cisco's entry is exactly what the Fibre Channel market needs.
"It needs someone with that kind of bandwidth to make Fibre Channel a protocol that can compete nicely with other protocols," Wenzel said. "With Cisco coming from its focus on Gigabit Ethernet, this will help Fibre Channel."
While Cisco has been involved for years in core switches, LANs and WANs, it has not been active in Fibre Channel and other storage protocols, Yassinger said. "This will act to bridge the convergence gap between IP and storage," he said.
Cisco's Erdman said his company plans to make the indirect channel the focus of its marketing efforts.
Over the past few years, Cisco has moved to depend on its direct team for sales, but has fulfilled through the channel, Erdman said. As a result, about 90 percent of the company's sales are now fulfilled by partners. Cisco plans to continue this with the new Fibre Channel products.
However, Erdman did warn that Cisco plans to recruit relatively few solution providers. "From our experience with new markets, we know there is a lot of training to be done. . . . We have to be careful about who we train and certify," he said.
Cisco employs roughly the same strategy for its current storage products, and limiting itself to a small number of partners is of no concern to him, Wenzel said. "I'm totally for everyone coming out with new competition," he said.