Following HP's announcement last week that it would acquire 3Com, speculation has arisen that more acquisitions related to storage and networking could happen soon, possibly including HP's absorption of 3PAR or Pillar. Another leading network company, Brocade, issued a denial that it was for sale, which nonetheless raises questions about whether its products and technology would fit well into a larger company.
As the industry moves into the next stage of applying virtualization, going beyond basic use cases such as consolidation, users are focusing increasingly on the broader impact that virtualization will have across storage and network infrastructures. Especially in large organizations, system managers now seek to achieve some of the same benefits from virtualizing storage and networking resources that they gained with server virtualization. In particular, they would like to reconfigure storage and network infrastructures with the same flexibility as virtual machines. For example, just as virtual machines can be moved around a network with functions such as VMware vMotion or Hyper-V Live Migration, virtual storage can be transparently relocated from one physical storage device to another with tools such VMware Storage vMotion. Similarly, administrators expect to be able to dynamically reconfigure virtual networks independently of the physical network and storage connections, which are generally changed as little as possible to avoid burdening network and storage management personnel.
Some of the requirements for these capabilities must be handled at the level of server hardware. Indeed, I/O virtualization technologies such as HP Virtual Connect, IBM BladeCenter Open Fabric Manager, and Egenera PAN Manager enable flexible connections between servers and the physical topology of networks and storage. However, to fully integrate virtual machines into virtual networks spanning datacenters or enterprises, specific functions must be implemented within virtual machine hypervisors. For this reason, the integration of Cisco's Nexus 1000V virtual switch with VMware vSphere 4.0 represents an especially crucial link. The commonality between Cisco and VMware's virtual networking technology enables VMware-based virtual networks to be managed with the same tools used for managing Cisco-based physical networks, in a way that allows virtual networks to be flexibly reconfigured. A key strength of the Virtual Computing Environment (VCE) coalition between EMC, Cisco, and VMware is their ability to further optimize the hypervisor, virtualized storage, and virtualized networking as a single integrated stack. Coupled with Cisco's entry into the server market with its Unified Computing System (UCS), VCE's thrust deep into the heart of virtual infrastructure steps up the challenge for other major systems vendors to respond with a credible alternative for end-to-end virtual infrastructures spanning servers, storage, and networking.
HP's acquisition of 3Com, following its renewed focus on the HP ProCurve line of networking gear in the past year, clearly represents a dramatic first step towards adapting to the new realities of the IT systems business, in which Cisco has become a strategic competitor. HP has also quietly started promoting an industry standard for virtualized networking called Virtual Ethernet Port Aggregator (VEPA), which it hopes will be more palatable for adoption by multiple server vendors than the VN-Link technology underlying Cisco's Nexus 1000V switch and the vNetwork distributed switch in VMware vSphere 4.0. As the strategic importance of virtual switching has become clearer, some other alternatives have sprung up in the industry as well, including Open vSwitch, which is based on open source technology developed in part by Nicira Networks and is being promoted by Citrix for its XenServer hypervisor.
How would additional acquisitions then help HP to compete with Cisco and VCE? First, acquiring 3PAR does not appear to be necessary. HP already has a broad range of storage solutions, including Modular Smart Array (MSA), Enterprise Virtual Array (EVA), XP, X9000, ExDS9900, AiO (Proliant Storage Server), RISS, and Lefthand. It is not clear how 3PAR would fit into this lineup, unless some existing product family were phased out. Indeed, most of the big storage companies have now made their clustered storage technology acquisitions, leaving 3PAR to compete independently. At this stage, it is unlikely that any of the major vendors would want to acquire the company, except for an irresistible fire sale price. One possibility would be for 3PAR to be acquired by Rackable (now SGI), should it still have any money left after its acquisition of SGI. More far-fetched, 3PAR could be acquired by someone out of left field, such as a cloud service provider like Amazon, Salesforce.com, Google, or even Microsoft. Any of these companies could take advantage of 3PAR's technology to build out a cloud service infrastructure that requires vast amounts of high-performance storage.
Acquiring Brocade could be more strategically significant, either for HP or another vendor such as Cisco. From the perspective of storage customers, Brocade is far more relevant than 3Com, which does not make Storage Area Network (SAN) switches. Brocade is one of only two independent suppliers of enterprise-grade Fibre Channel (FC) switches, the other being Cisco, which entered the FC market relatively late. While Brocade insists it is not for sale, the company now faces a long-term strategic issue as its core market of FC solutions nears the end of its natural lifespan. FC technology is now 30 years old, and while it has been the SAN interface of choice for the last 10 years, it will soon enter the sunset phase when FCoE and/or Infiniband start taking off as expected. As a result, Brocade needs to break out with some major new innovation or be acquired, otherwise it will perish.
One key advantage for Brocade is its DCX Backbones technology, which enables true Storage Network Virtualization, whereby SAN switches themselves are transformed into hosting virtual networks. Cisco is targeting converged storage networking with Fibre Channel over Ethernet (FCoE), but its technology is optimized more for the virtualized Ethernet layer of the stack, and it does not have quite the same degree of storage virtualization functionality as DCX Backbones. Whichever company acquires Brocade and its DCX Backbones technology could gain a crucial edge in the pursuit of Storage Network Virtualization.
Integrating DCX Backbones with Nexus 1000V technology would put Cisco, and the VCE coalition, in an even stronger position than before to drive the agenda of virtual infrastructure and Storage Network Virtualization, since most of the major systems vendors now OEM Brocade's technology for their existing SAN products. Conversely, should HP proceed to acquire Brocade, it would significantly strengthen its defenses against Cisco's drive into the server market. At minimum, having another switch supplier in its fold would help HP establish VEPA as a standard for virtual switching. Further, integrating Brocade's technology with other elements of HP's virtual infrastructure such Virtual Connect would go far in enabling HP to propose an alternative to VCE for virtualizing everything outside of the hypervisor (regardless of which hypervisor is installed, i.e. VMware, Hyper-V, or XenServer). While there is no evidence at present that either Cisco or HP is about to make a move on Brocade, the control of that company's assets remains a critical variable for determining how virtual infrastructure will be adopted across the industry.

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