Partners: Cisco Needs To Step Up Its Software-Defined Storage Game To Compete With Dell-EMC

If Cisco Systems wants to compete effectively against Dell-EMC and become a leader in the hyper-converged market, partners say the networking giant needs to up the ante and invest in a software-defined storage play.

"They should continue to stay in front of some of the software-defined storage if they want to have a bright future," said Robert Keblusek, chief technology officer of Downers Grove, Ill.-based Sentinel Technologies, a Cisco Gold and EMC Gold partner. "For them to get into the traditional SAN, I'm a little torn on that because they're following more of a software-defined storage trend. And if you look at future market position, that trend is really where there is a significant amount of growth in storage."

Greg Schulz, senior analyst at research firm StorageIO, said if Cisco wants to grow its footprint and not be left in "the shadows of Dell-EMC," a storage acquisition or internal R&D investment is warranted.

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"If they want to really grow, they have to start treating storage as more than an accessory to the network," said Schulz. "They've got a good footprint and they've demonstrated that they can move beyond their traditional networking reach. … They're big. They can survive but, candidly, unless they just want to be comfortable they need to do something around storage."

Cisco declined to comment to CRN on whether it sees a need to improve its storage position.

The San Jose, Calif.-based networking giant closed its Invicta storage business last year after a failed attempt to enter into the storage market following its acquisition of Whiptail in 2013.

Partners say most of EMC's storage solutions now fit into some sort of hyper-converged or converged system play, an approach in which Cisco should up its investment. Dell also recently expanded its hyper-converged offering with new technology from EMC, VMware and VCE – in which Cisco owns a small stake.

Cisco unveiled its HyperFlex hyper-converged offering in March, which uses UCS servers and software-defined storage technology from a partnership with startup Springpath. Cisco said it has invested in Springpath, while sources have told CRN that Cisco has the option of acquiring Springpath based on revenue results.

"HyperFlex gives a strong Cisco partner the ability to be less dependent on EMC and Dell," said Ethan Simmons, vice president, East, for Dallas-based Lumenate, a Cisco partner that is ranked No. 145 on the CRN 2015 Solution Provider 500. "As all that storage becomes software-defined or virtualized, I see Cisco wanting to become more and more relevant in that space."

Sources also have told CRN that Cisco is in talks about forming a strategic partnership with hyper-converged superstar Nutanix. Sources say the plan is for channel partners from both vendors to sell Cisco UCS with integrated hyper-convergence software from Nutanix.

IDC analyst Nolan Greene said Dell-EMC stands to "gain ground" if Cisco doesn't enhance its storage play.

But Greene said it's not only Dell-EMC or Hewlett Packard Enterprise that Cisco needs to worry about, it's also storage networking vendors like Brocade Communications. Brocade recently unveiled plans to acquire Ruckus Wireless for an estimated $1.2 billion, which partners said would put even more pressure on Cisco.

"It wouldn't be reckless for Cisco to acquire a storage company -- their cash reserves and even their acquisition cadence are much higher than many of their rivals," said a top executive at a Cisco Gold partner, who declined to be named.

"Cisco should see how hyper-converged does in the next year, learn some lessons from how Springpath applies that storage, then make an acquisition towards the end of the year," said the executive.