In a move certain to shake up the IT as a Service business, as well as Cisco’s relationship with VMware, Cisco announced its intent to acquire IT as a Service and Service Catalog leader newScale. “Cloud computing represents a major shift in the evolution of the Internet, and as more customers migrate from traditional IT infrastructures, the need for rapid self-provisioning and efficient management becomes increasingly critical,” said Parvesh Sethi, senior vice president of Cisco Services. “With the acquisition of newScale, Cisco will be able to accelerate the deployment of cloud services through a service catalog and self-service portal that allows customers to easily manage their IT infrastructures.”
What This Means
The IT as a Service category of management software layered on top of virtualization really got its start with the announcement and release of VMware vCloud Director at VMworld in the Fall of 2010. However, while the release of vCD signalled the start of this race as a use case for virtualization, newScale had been putting in Service Catalogs for years – initially on physical infrastructure, and lately more and more on virtualized infrastructures. newScale over time built a position as a clear market leader in the Service Catalog business with an impressive list of enterprise clients.
However, once you really drill into which products do what some important details emerge. newScale does not really compete with vCloud Director. In fact newScale integrates with it, providing the Service Catalog functionality and letting vCD do the automated and policy based provisioning when the service is fulfilled on vSphere. The product that newScale really directly competes with is vCloud Request Manager is which VMware’s version 1.0 and relatively weak implementation of a service catalog.
Therefore we now have a situation where one of VMware’s most strategic partners (Cisco) is now for the very first time competing with one layer of VMware’s offerings. Previous to this acquisition, Cisco was 100% complementary to VMware, since Cisco was purely as hardware vendor, and being a hardware vendor is the only way to be 100% complementary to VMware (at least in the eyes of VMware).
So now VMware and Cisco are going to have to play the co-opetition game – where they cooperate 95% of the time around strategic initiatives to both companies like the Cisco UCS, but compete for the Service Catalog layer of the IT as a Service Management stack. Where this is going to get difficult for VMware and Cisco, and interesting for the market and customers is the fact that newScale is not just a service catalog. In IT as a Service Reference Architecture, we took a look at the products in the ITaaS ecosystem, and was clear that newScale offering features like multi-tenancy, provisioning, lifecyle management and orchestration, which makes newScale into a long term much more competitive offering to VMware’s cloud management stack. This is a much greater threat to VMware’s management stack strategy than just a third party service catalog that integrates with vCD, especially since it will have Cisco’s sales and services organization standing behind it.
This could also turn out to be a really big win for Cisco and the UCS. One of the strengths of the UCS is the degree to which it can be reconfigured on the fly to meet different provisioning scenarios and demands. Deep integration of newScale (basic integration already exists) with the UCS management layer offers the potential to provide the same kind of workload management that is through virtualization (with vSphere) but without requiring a hypervisor. It is in fact the case that some of Cisco’s largest UCS installations are not running any virtualization platform, they are running operating systems and applications directly on the UCS hardware, and achieving agility through the flexible management inherent in the UCS. Layering a service catalog with all of the other management features that newScale offers on top of what you can already do with a UCS is a huge win for Cisco – and ultimately a threat to VMware.
For enterprise customers this is all good. This represents a significant maturation in the IT as a Service or private cloud business as now a market leading and product functionality leading solution is available from a major systems vendor like Cisco who has a proven ability to support enterprise accounts with business critical IT infrastructure.