Sources: Cisco To Unveil Hyper-Converged Offering, Aims To Undercut Nutanix, SimpliVity On Pricing

Cisco Systems is poised to make its long-awaited entry into the hyper-converged infrastructure market next week at its partner conference in San Diego, sources familiar with the vendor's plans told CRN Monday.

At the event, Cisco is planning to unveil a hyper-converged offering that consists of UCS servers running modified software from hyper-converged startup Springpath, said the sources.

As CRN first reported last month, Cisco quietly inked an OEM agreement with Springpath last year and also made an undisclosed investment in the Sunnyvale, Calif.-based startup, which was founded in 2012 by former VMware storage engineers.

Springpath is a relative newcomer to the hyper-converged space, which refers to software that enables compute, storage and networking to run on industry-standard x86 server hardware.

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Cisco is coming late to a market in which startups Nutanix and SimpliVity -- which have collectively raised nearly $590 million in venture funding -- are already well entrenched. Nutanix filed for an IPO in December seeking to raise up to $200 million, and SimpliVity has indicated recently that it is also on track to go public.

It's not clear how much Cisco will charge for its hyper-converged offering, but the sources said it plans to use aggressive pricing in order to quickly build market share and close the gap on the startups, according to knowledgeable sources, who all requested anonymity.

"It does appear that [Cisco] thinks they will be priced under the starting point for Nutanix and SimpliVity," said a high-ranking executive from one national Cisco partner, who didn't want to be named.

A Cisco spokesman declined to comment.

Cisco partners with nearly every major and second-tier storage vendor in developing converged infrastructure solutions, with Hewlett Packard Enterprise and Dell being the major exceptions. But thus far, Cisco's only route to the hyper-converged space has been a partnership with SimpliVity, which sells its OmniStack hyper-converged software on UCS servers.

SimpliVity CEO Doron Kempel told CRN last month that the startup has sold more than 1,000 units of the combined product, known as OmniStack Integrated Solution with Cisco UCS. SimpliVity partners told CRN last month they're seeing growing sales of the product as well.

One main selling point for hyper-converged infrastructure is that it obviates the need for centralized SAN storage. This means that in addition to cutting hardware costs, organizations don't need as many staff to manage storage systems.

Nutanix and SimpliVity both trade on the cost-savings angle, and both target a wide range of customer segments with their hyper-converged offerings.

Howard Ting, chief marketing officer at Nutanix, told CRN that his company's entry-level hyper-converged offering costs around $25,000 for a three-node configuration, a price that also includes support.

Marianne Budnik, chief marketing officer at SimpliVity, said the entry-level OmniStack Solution with Cisco UCS, including three years of business-critical support, costs "less than $20,000."

Although Cisco's entry is sure to intensify competition in the hyper-converged market, it should also serve as further validation of the technology and get more organizations interested, according to one hyper-converged vendor executive.

"This should help put the final stake in the heart of SAN arrays," said the executive.