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Cisco, What are You Thinking?

Who's the big winner in a VMware/Cisco teamup?

It didn’t take long for one of my VMWorld Preview predictions to come true. Recall when I said you should listen for major collaborations and partnerships amongst some of the industry’s leaders? Well, it happened early Tuesday morning when Cisco and VMware gave a joint press conference where they announced that they’ve entered into a strategic partnership focusing on virtual network infrastructure, accelerated desktop virtualization, and partnered consulting services.

Cisco and VMware? I know. I had the same reaction and was just as confused as you probably are. I tried to figure out what’s in it for Cisco since Cisco’s offering up its Nexus 1000V distributed virtual software switch as an optional add-on to VMware Infrastructure and providing its Wide Area Application Service (WAAS) and Application Control Engine (ACE) to replace the rather sluggish RDP for VDI acceleration. It appears to me that on the surface this alliance is a great deal for VMware and not so much for Cisco. VMware’s VDI solution gets a 65% speed boost to make VDI a viable option for those who want to head that direction, VMware’s lightweight virtual switch technology gets turbocharged with the Nexus 1000V product, and Cisco will go to customer sites with VMware to help design solutions. Sounds like a good strategy for VMware.

So what is in it for Cisco? You may remember that last year Cisco bought a $150 million hunk of VMware from EMC (VMware’s parent company), so was this announcement such a big surprise after all? Knowing this, the picture becomes clearer for me — Cisco has a stake in pumping VMware’s value by creating this alliance that’s existed since July 2007. Are you even more perplexed now?

It’s pretty simple really. Both companies need a boost and Cisco sees this as a way to maintain VMware’s leadership in this increasingly competitive market. Red Hat is about to become a major force in the virtualization space with its recent purchase of Qumranet, Microsoft’s Hyper-V is also taking aim at VMware’s market pole position, and don’t forget Citrix nipping at everyone’s heels with Xen. Sun’s xVM Server and xVM VirtualBox are too far behind to be on VMware’s radar but the other competitors are about to eat away at VMware’s bottom line. Only time will tell if this “new” alliance is a good idea but my gut feeling is that VMware won’t give up its lead with or without Cisco’s help.

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