Cisco Has Found A New Way To Battle VMware

Cisco CEO John Chambers

Photo: AP

Cisco has sent a strong signal to VMware, a close partner which has increasingly edged into its core networking business.The networking-equipment maker just releasied its own version of an open-source cloud operating system.

In essence, Cisco said to VMware, “You want to go after our core industry? Then we’ll take a bite out of yours!”

VMware and Cisco have fallen into a love-hate relationship. On the one hand, they are close partners. Cisco’s blockbuster server product, Unified Computing System, leans heavily on tech from VMware and EMC, the storage maker which owns a majority stake in VMware. The three of them back a venture called VCE, which sells a popular data-centre-in-a-box product called Vblock.

But when VMware bought fledgling networking startup Nicira for $1.26 billion last summer, it told the world that VMware is ready to upend the networking business, much like it transformed the server industry. And that means taking on Cisco.

On Friday, Cisco fought back by releasing the Cisco Edition of OpenStack. OpenStack is a cloud operating system built with the cooperation of about 200 tech companies, including Cisco.

OpenStack competes head-to-head with VMware’s prize cloud operating system, vCloud. vCloud is the reason VMware spent $1.26 million on Nicira.

OpenStack is also one of the most politically charged consortiums in the tech industry right now. Nicira was a power player in it, working with Cisco to developing the networking portion of OpenStack. After VMware bought Nicira, VMware asked to become a part of OpenStack and permission was granted.

This upset a lot of OpenStack members because until that point, VMware had been dissing OpenStack.

“I was one of the few people that voted against VMware joining,” OpenStack board member Boris Renski told Business Insider. “Ultimately VMware didn’t join to help the project, but to neutralize and subdue it.”

Renski is cofounder of Mirantis, a company that helps companies build OpenStack clouds.  Mirantis worked with Cisco on its OpenStack edition and says Cisco isn’t ready to grab enterprises customers away from VMware … yet.

But, Cisco is getting ready to yank out its own internal deployments of VMware’s software and use OpenStack instead, and is doing the same for a handful of its strategic customers, says Renski.

And that means that Cisco will be able to end its relationship with VMware altogether, should it come to that, because it will soon be able to substitute technology from VMware and EMC with OpenStack.

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