Cisco Kills EMC NAS Deal

Decision to stop selling EMC NAS raises questions, but could be sales related

June 2, 2006

3 Min Read
NetworkComputing logo in a gray background | NetworkComputing

Cisco is out of the NAS business, or at least the EMC NAS business.

Cisco quietly end-of-lifed the EMC NS500 and NS700 NAS systems it has been reselling for about a year as the Cisco FS5500 and FS5700. (See Cisco & EMC Close NAS Deal.) There was no official announcement, but Cisco posted a notice on its Website saying it would stop taking orders for the EMC NAS boxes May 15 and stop shipping them June 1. Cisco will offer support through 2011 on systems it sold.

Which apparently weren't many. Industry insiders wonder if the decision to stop reselling EMC NAS was due to a lack of sales or a deterioration of the relationship between the companies. One Wall Street analyst who follows EMC says the storage company had low expectations for the deal and they were met.

"EMC people didnt really expect any material revenues from Cisco with NAS," he says. "Cisco doesn't know how to sell storage and they don’t have any interest in spending a lot of effort in an area that is not their core competency."

When contacted by Byte and Switch, Cisco released a statement saying the "relationship between Cisco and EMC is at its strongest point ever." Indeed, Cisco maintains the NAS end-of-life notice "is a first step in a broader Cisco/EMC relationship that will ultimately deliver a more tightly integrated sales and marketing effort. We are currently finalizing that agreement and more will be communicated shortly."Not everybody is buying that. Another Wall Street analyst, who asked not to be named, claims poor sales alone would not have caused Cisco to stop selling EMC's NAS. "It makes you wonder about the relationship," he suggests. "Why stop selling it? There's nothing to gain."

When the deal was forged in January of 2005, Cisco was looking to move deeper into storage than just selling Fibre Channel SAN switches through EMC and other storage vendors. Its goal was to combine NAS sales with the wide area file services (WAFS) it had recently picked up by acquiring Actona. (See Cisco Wades Into WAFS.) But Cisco hasn't done well in the WAFS space yet either.

"I'm not sure what this really signals other than that Cisco is out of the NAS reselling game, which I don't believe was a real focus for them," says analyst Greg Schulz of StorageIO. "It was more connivance for certain customers who were looking for Cisco switches, WAFS, and related technologies."

According to Schulz, Cisco's NAS focus has moved to managing NAS systems. The company recently made a strategic investment in NAS file management vendor NeoPath and is expected to strike an OEM deal with the startup.

NeoPath sells its product on an appliance that sits in the network and manages files stored across different NAS systems as one big pool, using virtual namespace and load balancing. NeoPath's File Director appliance helps customers manage multiple NAS boxes from EMC and others, but EMC picked up similar technology last year when it acquired Rainfinity. (See EMC to Buy Rainfinity.)Cisco's statement to this publication said the company sees value in the combination of its WAFS products and EMC NAS. The Cisco Website announcing the NAS end-of-life touts the combination of NAS along with Cisco Wide Area Application Services, which is the software acquired from Actona: "Hence, customers are encouraged to continue to purchase NAS devices including the EMC NS500 and EMC NS700 from vendors like EMC..."

— Dave Raffo, News Editor, Byte and Switch

  • Cisco Systems Inc. (Nasdaq: CSCO)

  • World Cellular Information Service (WCIS)

  • NeoPath Networks

  • The StorageIO Group

SUBSCRIBE TO OUR NEWSLETTER
Stay informed! Sign up to get expert advice and insight delivered direct to your inbox

You May Also Like


More Insights