Tuesday, March 17, 2009

Unified Computing System to cut costs in rough economy

On March 16, Cisco Systems introduced a new data center architecture named the Unified Computing System. Cisco’s new architecture, composed of numerous new Cisco hardware products like blade servers, an interconnection “fabric,” a chassis for the blade servers, fabric extenders and network adapters, are designed to work together to limit the number of servers within a company (Reardon 1). The Unified Computing System is designed to unify networking, computing, storage, and virtualization resources in order to reduce its total cost of ownership, “radically reduce” the number of devices requiring management, and reduce other labor and financial expenditures as a result (Skillings 1).

Cisco’s new product is being debuted at the perfect time for a more efficient server, when all companies are looking for ways to cut costs and cut back spending. With the economy suffering, any new technology that limits the need for expenditures and man power is certainly popular in the business world. The only question is whether businesses will ditch their current business technologies and servers in favor of the new Unified Computing system, as this will require a substantial expenditure. The question comes down to whether companies see a benefit in the long-run of cutting server size despite the initial cost, or whether they will maintain the status quo and hope that the markets improve before long, thus enabling them to maintain spending.

According to Jon Oltsik, senior analyst at the Enterprise Strategy Group, Cisco’s UCS servers will successfully cut the amount of storage space, cooling, and power needed to run the equipment as compared to other servers (Oltsik 1). This technology only further pushes this system’s capability to save a company money in numerous different avenues, making it that much more appealing. Additionally, Cisco manages the entire UCS virtual data center with one management platform. Cisco management can be integrated with other management platforms from vendors like BMC (Oltsik 1). Not only will Cisco’s new system cut costs due to the requirement of less hardware, but also will not require any new management platform for some businesses.

According to Cisco’s CTO Padmasree Warrior, “We are going to compete with HP. I don’t want to sugarcoat that. There is bound to be a change in the landscape of who you compete with and who you partner with.” One could argue that Cisco has the upper hand in their partnerships, thus making them more promising for the long-run. Cisco has teamed up with BMC, EMC, VMware (who is an industry leader in the cloud-computing phenomenon), and most importantly, Microsoft. Financial-services industry expert Larry Dignan points to this new competition as one that is very beneficial for businesses across the United States. According to Dignan, the clash of major technology experts will not only lead to better products, but also cheaper prices for consumers (Dignan 1).

Essentially, Cisco is cornering the market of any business encountering server problems in this economy. Any business looking to improve capabilities will certainly do so with their bottom line in mind, and any system that will cut costs on so many different levels will certainly be popular in the industry.




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