IBM Tells Cisco: 'Let's Go!'

IBM Corp. (NYSE: IBM) has become the first major storage vendor to announce its intentions to resell Cisco Systems Inc.'s (Nasdaq: CSCO) Fibre Channel switches, a milestone that portends a strong entrance into this market for Cisco.

Although not totally unexpected, the deal should strike new fear into the hearts of the incumbent Fibre Channel switch players, for whom IBM has been a critical partner in the distribution of their products.

Under the terms of the deal, announced this morning, IBM and IBM's business partners will offer Cisco's MDS 9000 family of switches to their customers, starting with the Cisco MDS 9509 director and the MDS 9216 fabric switch and associated modules. Financial details of the deal were not disclosed (see IBM to Resell Cisco Switches).

However, IBM isn't quite yet ready to roll on the Cisco boxes. The company says it expects to finish interoperability testing and qualification of the MDS switches and announce their availability by the end of the first quarter.

So why did IBM decide to announce this partnership now, instead of waiting until the products actually are available? "It's been in our labs for the past several months, and now is the time to let everyone know about this new relationship between IBM and Cisco," says Tarek Makansi, director of storage products for IBM. (Translation: We wanted to get our press release out before EMC Corp. [NYSE: EMC] did.)Big Blue is keeping mum on pricing until it ships the MDS line, although Makansi says the switches will be "competitively priced given their value." (Probable translation: They're going to be more expensive per port than current Fibre Channel products.)

The deal is nonexclusive for both parties, and IBM says it will continue offering SAN switches from Brocade Communications Systems Inc. (Nasdaq: BRCD), McData Corp. (Nasdaq: MCDTA), and Inrange Technologies Corp. (Nasdaq: INRG).

Makansi says the Cisco switches "will be particularly appealing to customers who want to consolidate their management of Fibre Channel networks with their IP networks." But he points out that the MDS 9000 line doesn't support Ficon and Escon protocols, whereas both McData and Inrange do. Cisco executives say Ficon support is in the works, but they wouldn't say when it will become available.

Other Fibre Channel switch players, at least publicly, reacted to news of the IBM/Cisco deal with the (rather predictable) observation that Cisco's entrance "validates" the market.

"In terms of our relationship with IBM, we don't anticipate any changes as a result of this announcement. IBM continues to be our largest customer and the relationship is strong," says Dale Lafferty, Inrange's VP of marketing and alliances. "In fact, at this very moment, IBM and Inrange are taking part in one another's 2003 kickoff meetings and are planning joint programs for the coming year."Still, IBM's partnership with Cisco puts to rest one of the bigger question marks about Cisco's entry into the FC switch market. Analysts wondered how well Cisco would be able to link up with the major storage vendors -- and its deal with IBM answers that decisively (see Cisco's Sales Strategy Unclear, Storage OEMs Warm Up to Cisco, and The Cisco Hammer).

Meanwhile, sources tell Byte and Switch that EMC has already finished qualifying the MDS 9000 line with its storage arrays. But an EMC spokesman says it hasn't officially completed qualification yet. "It's in our labs, and we'll make it available to our customers when final qualification is completed," says EMC's A.J. Ragosta.

Cisco confirms that it is right in the thick of lining up additional storage array suppliers as partners, but executives won't comment on who might be next. The company says it shipped a "very limited" quantity of MDS 9000-series switches to end customers last month, as a handful of its 20 beta sites moved into production.

"We have limited availability [direct from Cisco], because our strategy is to provide the solution through our partners," says Jackie Ross, VP of marketing at Andiamo Systems Inc., the "startup" that Cisco spun in last August. Andiamo, to remind you, means "let's go" in Italian (see Cisco Buys Andiamo and Cisco's Creative Andiamo Options).

As Cisco gathers momentum in the SAN space, it may seem as if it's marshaling a force the size of Sauron's evil undead army in The Two Towers.But Cisco is a newcomer to Fibre Channel, and it still hasn't proven itself in this market. The IBM deal is certainly an important development, but neither this nor any other partnership guarantees Cisco's success.

Todd Spangler, US Editor, Byte and Switch
http://www.byteandswitch.com