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VCE & Acadia the Tipping Point of Private Cloud?

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… Most customers can’t afford that status quo, where the majority of their expenditures go into keeping the lights on versus innovation.  It really comes down to the CIO’s desire to enable their business strategy rather than a cost center. …

This is how Cisco’s John Chambers portrayed today’s VCE announcement during the joint webcast with EMC’s Joe Tucci and VMware’s Paul Maritz.  What Chambers was describing was the Private Cloud.  While only time will tell if VCE will be the tipping point of Private Clouds, today’s announcement was clearing laying out a destination for IT over the next few years.

What is VCE?

Industry Leaders at VMware vSphere Launch
Industry Leaders at VMware vSphere Launch

Rather than repeating all the details that have been provided elsewhere, the cliff notes summary is that VCE is a partnership between Cisco, EMC, and VMware.  By combining Cisco UCS server hardware and networking with EMC storage and management VCE creates a certified and supported data center solution to enable turnkey virtualized data centers running VMware vSphere on Cisco and EMC hardware components.  Along with the partnership, a new corporate entity called Acadia was announced to provide solution services under a separate entity from the primary stake holders of Cisco and EMC with participation from Intel and VMware.

Here is a list of others talking in more detail about VCE Coalition (I’ll try to update this over the next few days as well):

All of this private cloud chatter just a day after Gartner predicts cloud computing spend to take off.  Should be interesting to watch Cisco announce their Q1FY2010 earnings tomorrow…

Why Do I Think Enterprises Should Care about VCE?

Private clouds are a reality in the enterprises.  I have clients who are either mid-project of building a private cloud or deep in the architecture and planning for their private clouds.  The simple reason being that they know they need a fully virtualized, self service environment to respond to their internal business customer’s needs.  The stories of business groups being told it would take a year or more to deploy their new application environments are true.  Some times this is due to lack of data center space or capacity (that seems to be the pandemic spreading quicker than swine flu), sometimes due to lack of human resources in today’s recession recovering economy, sometimes a combination of both.

Virtualization is the key to the data center capacity pandemic facing many enterprises.  But just layering virtualization on top of the existing data center is like providing some Tamiflu to someone who is sick with the flu.  It may help them get better over time, but not over night.  There are still data center designs which don’t take into consideration the ramifications of virtualization.  I have clients who have plenty of extra floor space in their data center, but not enough power, or backup generator capacity, or floors that aren’t strong enough to support a storage array needed to fill the empty space with virtual computing infrastructure.

On top of that, virtualization with the legacy process in place don’t allow IT to respond to customers needs at the speed of business.  This is where private clouds with automated management and self-service provisioning capability come into play.  Take that low hanging visualization fruit and let the users feed themselves.  Providing internet cloud capabilities in the enterprise data center for web apps and basic services is just the start.  Once you start providing that self service capability for enterprise applications as well, now you’ve got something.

What I see VCE providing is the same building block approach that Amazon, Google, and Yahoo have each individually custom built for their own data centers, but in a packaged, tested, and supported format from trusted infrastructure vendors.  Now any Enterprise, big or small, has the ability to run their data center in an automated fashion using virtualization and hardware solutions purpose built for the task.  Enterprises are risk adverse in their IT departments, so having Cisco, EMC, and VMware standing behind the solution with a independent services and support group in Acadia, will help ease concerns.  And with the enterprise sales forces of both Cisco and EMC selling VCE solutions, access into the key decisions makers in Enterprises is there.

It’s easy in the early days of a partnership like this to show how all of this is nothing new, and in many ways true statements.  So the additional details that come out over the new few quarters will be important.  And the amount of traction that VCE has over that same time still needs to be seen.  But I see the foundation that is presented in VCE, as well as the potential that is there for the near future, as helping many enterprises solve the data center challenges facing them today as well as help enterprises break through that 30% virtualization barrier.

And What Impact Do I See to VMware?

I have seen various discussion today debating whether the VCE coalition is a good or bad thing for VMware.  Scott Lowe, for example, raised some interesting questions on the impact of VCE on VMware which sprouted some interesting discussions.  But over all, today’s VCE announcement was largely Cisco and EMC with support from VMware.  VMware’s partnerships with other hardware vendor’s and solution providers are still in full force.  If down the road the VCE coalition starts to show high numbers of VMware enableed servers shipped than other hardware vendors, there is nothing that prevents those other vendors form creating similar partnerships that include VMware.

In the end, it comes down to the same thing as always…market demand.  If the enterprise customers demand a fully integrated virtual data center solution, then more and more of the enterprise vendors will need to start offering them to remain competitive. As The Register pointed out, right now it’s a two vendor story: VCE and HP…and both include VMware.

And will VCE/Acadia be the tipping point for Private Clouds?  We’ll have to look back in a few years and find out.  But between now and then we’re all in for an interesting ride in IT-land.

Of Server Vendor Expansion, Contraction & Future Data Centers

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Monday I was too busy with helping customers optimize their current data centers with virtualization to write about the (finally) announced Cisco Unified Computing System.  And I’m glad that I didn’t have the time, because now I can expand my original thoughts based on the rumors and reactions that IBM is in talks to buy Sun.  I’m not surprised that in the same week we see the server vendor marketplace expand we also see possible signs of it’s contraction; honestly it is about time someone buys Sun, it it isn’t done soon their future could parallel SGIs and they just fade away from existence.

First, Cisco

I have known about Cisco’s California Project Servers, now UCS, for a number of months now thanks to my role at VMware.  Since the moment that I first heard about them and later when I learned a bit more about the architecture, I could see how they could help change the data center as well as the hard struggle Cisco would have to do it.  One of the biggest use cases I see for UCS is with virtualized desktops.  With all the memory these systems will have in them, uses should be able to achieve higher density numbers for virtual desktops per core than with other servers.  Desktops typically are idle most of the time, the limiting factor on gaining higher consolidation density is memory, especially when you consider memory requirements for desktops will only increase over time possible eroding virtual desktop density numbers.

UCS’s promise of a centralized managed and clustered high density computing environment will enable data centers to consolidate physical space in their data center even further than could be accomplished with just virtualization.   Making this a reality will still require some changes in how data centers are run.  Primarily, not being afraid of running a server at higher than 30% or 50% utilization.  While you can’t run them all at 100% utilization as there is no place to failover, I still see many people running virtualized environments in much too conservative a fashion.  Let’s get server frugal, pinch that server penny to get all you can out it.

Cisco’s biggest challenge will be convincing customers to adopt these servers in large scale.  I don’t know if pricing has been disclosed yet, but considering that Cisco’s classic play book is to operate in key hardware markets where high margins can be maintained, I expect the cost per physical device to be higher than the competition.  Which might cause sticker shock for those who aren’t adjusting their thinking to cost per virtual machine from cost per physical server.  In addition, most of the big customers that Cisco will need to go after already have existing server vendor relationship in place.  And that server vendor relationship is with a vendor (i.e., the top three server vendors of IBM, HP, and Dell – see ZDnet’s Larry Dignan’s post) that sells more than just servers to a company.  Most of the large enterprises have pretty straightforward formulas for dealing with their strategic vendors, Cisco gets X-ish% of budget, HP gets Y-ish% of budget, and IBM gets Z-ish% of budget.  If a customers is going to increase Cisco’s percentage, where is it going to come from?  Another vendor?  At what risk to the rest of the operation?  Decisions like this are highly political in nature.  It will be interesting to see who decides to upset their politics.

Second, Sun

I have been wondering for the past year or more “who will end up buying Sun?”  Years ago I heard stories from high level Sun sales execs about how Sun’s upper management didn’t get that it’s not about the servers but about solutions.  Last year at Startup Camp in SF,  Johnathan Schwartz gave the kick off address.  After talking for 15 minutes about how people don’t know what Sun does, I was expecting him to wrap up his speech with a clear statement and direction for the company.  Nope, he left it hanging out there…as if he was saying “no one really understands what Sun’s goal in life is…including me.”

So, the real question of the day is “who is considering buying Sun?”  Many rumors that the IBM leak was just to drive up the price for the real bidder.  Some think it could be Dell, which would be a good way for dell to capture more market share but still keep it in the #3 spot.  Some think it should be Cisco, which would help Cisco catapult into 4th spot in the server market but hard to do considering all the money they just spent on the UCS development and launch (though some have been hypothesizing about the large amount of money Cisco borrowed a few months back, last time they did that was right before they bought WebEx…).  I find it interesting to think about Apple buying Sun, how much longer can Apple continue to grow without putting both feet in the business pool.  Apple wouldn’t want to do that on the desktop side since they would then have to start exposing future direction to business customers to allow them to plan for future changes (which ruins their big launch surprises) but doing this on the server side allows them to keep the Apple shock factor…though I don’t see the long term strategy there.

Either way, I think it will be inevitable for someone to buy Sun.  Investors want their money back.

Third, Data Centers

It is inevitable that partially alone, but definitively in combination these two announcements will impact the data center of the future.  The data center of future running on top of a virtualized data center operating system has to built out of standardized and common hardware building blocks. This means less hardware vendors and more innovation in the automation and services front.  Needless to say, the data center strategy discussion I will be having in the near future with one of my customers will be very interesting.  Partially because of the vendors that will be in the room and partially because of how the customer will be reacting to each of them based on these announcements.

Even with all the economic woes and recession depression, at least the shock waves from these two announcements will keep the server technology market interesting for the rest of the year.   I can’t wait to see how this all shakes out over the next few weeks…

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If you haven’t seen them, here is a short list of interesting articles I have read on the Cisco announcement:

Favorite quote from the Cisco buzz:  “Cisco and Intel are joined at the chip.”

And a second set of interesting articles about the Sun purchase announcment: