HP Slashes Cisco's SAN Prices.
Making a bold claim that Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation).
Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. Inc' entry to the storage market has been blunted by overly high prices, Hewlett Packard Co says it has begun selling Cisco's SAN hardware at prices up to almost a third less than other Cisco resellers.
HP said it has begun filling orders for Cisco's MDS MDS,
n See temporomandibular pain-dysfunction syndrome.
MDS 1 Maternal deprivation syndrome, see there 2 Myelodysplastic syndrome, see there 9000 SAN switches and directors, making it Cisco's fourth storage reseller An organization that sells hardware and software to the general public. Resellers purchase products from software publishers and hardware manufacturers. . It is recommending the device only to greenfield Greenfield, town (1990 pop. 18,666), seat of Franklin co., NW Mass., at the confluence of the Deerfield and Green rivers, near their junction with the Connecticut; settled 1686, set off from Deerfield and inc. 1753. customers, or those looking to implement mixed Fibre Channel and IP SANs, and has talked up what it says is a close relationship between it and Cisco's sales forces.
"We're establishing a new price point. There was a premium pricing Premium pricing is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price. policy being applied, but the functionality of the hardware was too similar to other products to justify it," said HP's vice president and general manager of infrastructure and NAS (1) See network access server.
(2) (Network Attached Storage) A specialized file server that connects to the network. A NAS device contains a slimmed-down operating system and a file system and processes only I/O requests by supporting the popular division Roger Archibald.
The other three resellers of the MDS 9000 are EMC (1) (EMC Corporation, Hopkinton, MA, www.emc.com) The leading supplier of storage products for midrange computers and mainframes. Founded in 1979 by Richard J. Egan and Roger Marino, EMC has developed advanced storage and retrieval technologies for the world's largest companies. Corp, IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) Corp and Hitachi Ltd, although Hitachi has yet to formally announce its presence on the list.
Archibald said: "We've worked with Cisco to make sure we have competitive prices. Depending on configuration, our pricing will be 20% to 30% lower than some of the earlier resellers." HP has not been able to discover Hitachi's prices, Archibald said.
Archibald said that HP's MDS 9000 prices will be comparable with those for the rival hardware that it OEMs from McData Corp or Brocade Communications Systems Brocade, Inc. NASDAQ: BRCD, based in Silicon Valley, designs, manufactures, and sells storage networking solutions and management applications for storage area networks (SANs) and file area networks (FANs). Inc.
"We said to ourselves 'Let's make sure the Cisco prices are compatible with those for other switch products,'" he said - implying clearly that EMC, IBM and Hitachi have been charging up to 30% more for the Cisco gear than for comparable Brocade brocade (brōkād`), fabric, originally silk, generally reputed to have been developed to a high state of perfection in the 16th and 17th cent. in France, Italy, and Spain. or McData hardware.
Cisco has in the past attempted to dispel claims that it is charging a premium for its SAN gear in the same way that it does for its data networking devices, in order to protect its 70%-odd profit margins.
The company points to the difficulty of achieving meaningful comparisons caused by the different a-la-carte and all-in software pricing schemes adopted by different vendors, and says it carefully calculated the prices it charges to its result to result in competitive per-port end-user prices.
The claims are at least half true, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. a detailed analysis of IBM's list prices published in March by investment bank SG Cowen. According to the bank, IBM's list prices for the smaller MDS 9516 switch is higher than for similarly configured rival hardware with equivalent software, by up to a whopping 59% in the worst case when compared to very low-cost McData Sphereon 4500. But a 128-port MDS 9509 director has an IBM list price 24% less than rival gear, the bank said.
Apples-to-apples comparisons are also made harder by the fact that, unlike other SAN hardware, the modular MDS 9000 includes options for lower-cost lower-service blocking ports. The price quoted by HP for a 64-port version of the MDS 9509, including full software and optics but only 32 full-service ports is $176,187.
SG Cowen's report in March said that IBM's all-in price for a 64-port MDS 9509 - port service levels unspecified - was $225,508. List prices are of course much higher than real discounted street prices, but do represent a starting point Noun 1. starting point - earliest limiting point
terminus a quo
commencement, get-go, offset, outset, showtime, starting time, beginning, start, kickoff, first - the time at which something is supposed to begin; "they got an early start"; "she knew from the for negotiations.
SG Cowen's report was prompted by IBM's decision in March to cut its price on the 9216 by 14%. The bank speculated after what the bank speculated was pressure applied by IBM to Cisco.
As ComputerWire went to press on Friday evening, Cisco refused to comment on the deals it has struck with its resellers, or the prices they are charging. "This is an HP decision," a spokesperson said.
HP declined to comment on what prices it had negotiated from Cisco. It is possible that Cisco has changed its stance following the first six months' experience of selling the MDS 9000. Last month it reported that it had sold $10m of MDS 9000 hardware to date, and was planning to double those sales in each successive quarter.
Cisco itself has been selling the device on a limited basis since January, and IBM became the first reseller in March. In April Hitachi said it would resell re·sell
tr.v. re·sold , re·sell·ing, re·sells
1. To sell again.
2. To sell (a product or service) to the public or to an end user, especially as an authorized dealer. the MDS 9000 - provided it could negotiate satisfactory terms with Cisco. According to Archibald, IBM and EMC between them have cut MDS prices more than once.
HP will not pitch the MDS 9000 to customers who have already built SANs using Brocade or McData hardware.
"We hope customers will see us as an objective advisor. We should lead with the same technology they are already using. If they've already got Brocade or McData hardware, then they should obviously continue with those," Archibald said, citing the disruption and expense of adopting another SAN supplier.
But when customers are building new SANs, or want to build FCIP-based metropolitan links between isolated SANs, or use iSCSI to build low-cost links out to stranded servers, HP will pitch Cisco's gear. "Our prime positioning will be for mixed protocols," Archibald said.
According to Archibald, HP has a much closer relationship to Cisco than either EMC, IBM, or Hitachi. Although IBM resells Cisco's hardware, he claimed that this is mostly through IGS IGS - Internet Go Server. , not IBM's products groups.
"IBM is just introducing its sales people to Cisco. We have tremendous engagement at the field level - we already know how to work together. We've already got MDS 9000 orders to fill," Archibald said.