SAN JOSE, Calif. Networking giant Cisco Systems Inc. jumped into the emerging but already crowded storage networking market last week through its novel spin-in company Andiamo Systems, stirring technical and market debates on several fronts.
Most observers noted that Cisco faces an uphill battle gaining technology and market credentials in storage. But some said the move ultimately could force a shakeout of existing Fibre Channel switch makers and accelerate the delayed rollout of storage systems based on Internet Protocol (IP). Cisco also is courting developers with a new applications programming interface for management software, potentially slowing a drive toward a standard in this strategic area.
Storage networks aim to give users a simpler way to see and manage terabyte pools of hard disk drives. A proliferation of new systems, architectures and standards, however, are complicating the emerging market for users as well as vendors.
"The number of companies entering the storage networking market is a big list, and it's already a mature market. I don't even begin to know who they all are," said Bob Passmore, who tracks that market segment for Gartner Inc. (Stamford, Conn.).
An uncertain future
Thanks to its backing from Cisco, Andiamo became the most-talked-about stealth-mode startup in Silicon Valley since CPU designer Transmeta Corp. (Santa Clara, Calif.). Whether the company can live up to its stated expectations of making the $19 billion Cisco the No. 1 or No. 2 player in storage networking switches remains to be seen, though. For that to happen, Cisco would have to overtake Fibre Channel switch leaders Brocade Communications Systems Inc. (San Jose) and McData Corp. (Broomfield, Colo.).
"Cisco has declared war on the storage-switch vendors," said one industry observer who asked not to be named. "They have big ambitions suitable to their size. This is one of the few growth markets today," he said.
Some analysts said Cisco's move spells the beginning of the end for a number of smaller Fibre Channel switch makers such as McData and Inrange Technologies Corp. (Lumberton, N.J.).
"The entrance of Cisco/Andiamo puts a flare in the sky announcing the zombiehood of Fibre Channel. Four years at the outside, two years at the earliest," predicted Ashok Kumar, senior analyst at U.S. Bancorp Piper Jaffray in a research note. "Of the Fibre Channel switch manufacturers, only Brocade seems to have a chance at surviving this environment over the long haul, but they will have to establish a role in the iSCSI industry soon to have credibility as an Ethernet/TCP/IP switch vendor," he wrote.
Brocade is the leading Fibre Channel switch vendor, producing more than $500 million in annual revenue. McData is second, with revenue of about $350 million. Market watcher Gartner Dataquest expects the Fibre Channel switch market to grow from $1.2 billion this year to about $4.3 billion in 2006.
Cisco said Andiamo's MDS 9000 multiprotocol switches, set to ship at the end of the year, will give it leadership in scalability and performance and provide new features. Those features include support for Fibre Channel, Small Computer Systems Interface over IP (iSCSI) and the FCIP tunneling protocol as well as virtual storage-area networks and new Fibre Channel diagnostics.
Steve Beers, director of hardware platforms at Brocade, said Cisco's move would not prompt the company to adopt iSCSI for which the company sees no demand. Brocade will, however, support links to third-party cards and systems that support iSCSI and FCIP, Beers said. While Andiamo's top-end MDS 9000 trumps Brocade's Silkworm in Fibre Channel port count (256 to 128), Beers said that is based only on use of Andiamo's 32-port cards, a density users may hesitate to adopt.
Beers added that Brocade already supports a variety of Fibre Channel diagnostics in its ASICs, as well as virtual storage-area-network capabilities via zoning. The company plans to roll out a new high-end switch with built-in gateway/routing features next year, he said, that will also include a new storage virtualization architecture being developed with third parties.
Rife with risk
Cisco faces a number of hurdles in its storage gambit. Chief among these is leveraging its expertise in IP-based networks that have yet to arrive for storage nets.
The move to iSCSI has been delayed by protracted work on the standard, now in its thirteenth and still not-yet-final draft. The iSCSI protocol also requires TCP hardware acceleration to gain full Gigabit Ethernet performance, making iSCSI about as expensive and still slower than the 2-Gbit Fibre Channel currently shipping.
The combined problems have pushed the release of many iSCSI systems products out to 2003, and several people say IP won't effectively compete with Fibre Channel in storage until the 10-Gbit generation.
"There has been a lot of development and disappointment out there, but I think Cisco could accelerate the drive to iSCSI," said Greg Schultz, director of storage networking for Inrange, which sells high-end Fibre Channel switches with as many as 256 ports. The move to iSCSI has been marked by delays, Schultz added, but should take hold in the market in 18 months.
Schultz and others said the long-term goal for the market extends beyond Cisco's stated plan of switches that support Fibre Channel and iSCSI to include Infiniband as well. "All these technologies need to come together. The question is whether [it happens] one or five years from now," he said.
To succeed, Cisco will have to garner support from third parties for a new application programming interface (API) for management software. Currently, leading vendors such as EMC, IBM and others have their own management APIs and applications, but several vendors are backing an emerging standard called the Common Information Model (CIM) as a de facto management software interface.
"We don't want to go down the road of everyone swapping APIs with partners. If we continue to say 'let's trade APIs,' there's less incentive to do CIM and the standard won't become ubiquitous," said James Staten, director of software marketing for Sun Microsystems Inc.'s storage group.
Sun announced last Tuesday (Aug. 20) storage management software that Staten said implements most of the CIM 1.0 work. He expects Sun to ship a fully CIM 1.0-compliant application early next year. A first industrywide CIM interoperability lab is planned for October.
Hewlett-Packard Co. is taking a different route to the same goal. HP announced Tuesday it had exchanged storage management APIs with IBM and plans to do the same with Hitachi Data Systems soon. Access to the APIs will help HP better manage the other company's products through its OpenView SAM software, said Howard Elias, general manager of HP's network storage group.
"As we do more of these API exchanges we will be able to do more interactive work [with other companies' systems]. This is on the road to CIM," he said.
Cisco said its MDS 9000 products will support iSCSI and CIM in early 2003. It is working to certify its products with about 10 companies that make storage arrays, server adapter cards and applications, including Adaptec, BMC Software, Hitachi Data Systems, IBM, Tivoli, JNI Corp., Qlogic and Veritas.
Brocade's Beers noted that his company already offers a 32-page booklet of 300 companies whose products are certified to work with its switches.
"The initial [Cisco] products are not likely to have much impact on the storage industry for the next year or so due to the time it will take to certify them and make them part of everybody else's solutions," said analyst Kumar. "The surprising lack of industry endorsements for Cisco should help Brocade and all the other FC switch companies sleep easier for months to come," he added.
For its part, McData expects to ship a 140-port Fibre Channel switch this fall. It will also demonstrate iSCSI and FCIP interfaces this fall and put them into products next year.
Cisco must also come up to speed in other areas. The storage-system buyer is a new customer for Cisco, and the networking giant lacks the other pieces of a storage network puzzle that companies such as EMC, Hewlett-Packard and IBM can sell, said Jack McDonnell, chairman of McData.
"Typically Cisco calls on the network buyer. This is a new customer for them," he said.
Cisco will leverage slightly lower prices and direct sales to end users to power through some of the market problems.
Jackie Ross, vice president of marketing for Andiamo, estimates the company's switch will cost about $1,850 per port compared to about $2,200 per port for Brocade's product. "Our philosophy is to be very competitive on price but not to be a price leader," Ross said.
A vulnerable spot
Brocade has vulnerability here, with gross profit margins said to be as high as 40 to 50 percent. In addition, three-quarters or more of sales for both Brocade and McData are via OEMs such as EMC, IBM and HP, which add to the end user's cost. However, the OEMs also bring expertise in melding storage arrays, switches and servers.
The MDS systems include about eight ASICs developed by Andiamo, including the company's own iSCSI silicon. The systems use dual 720-Gbyte/second passive backplanes and support six to 13 slots.
Cisco began investing in Andiamo in April 2001, housing the 270-person company on its San Jose campus. It has made its investment in the form of an $88 million convertible note, giving it a 44 percent stake in the company. Cisco said it will acquire the rest of the company by July 2004 at a price to be determined based on market milestones it has set for the startup.