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IBM Tightens Juniper Alliance, Downplays Cisco Rivalry

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NEW YORK (Reuters) – IBM on Wednesday announced it was stepping up its partnership with Juniper Networks Inc, but said it was also boosting ties with other equipment vendors including Cisco Systems Inc, playing down suggestions it was aiming to keep an increasingly competitive Cisco at bay.

International Business Machines Corp said it had agreed with Juniper on an original equipment manufacturing (OEM) partnership, under which IBM would rebrand Juniper’s switches and routers as its own and sell them as part of its family of products.

IBM said the move was aimed at providing its customers, in particular corporate data centers dealing with increasingly high-volume network traffic, with a wider range of server, data storage, and networking equipment to choose from.

“Most of our customers want choice. They want best of breed,” said Jim Comfort, vice-president of IBM’s enterprise initiatives.

Juniper executives said the deal would help expand its distribution.

IBM said it saw partnerships as a way of helping it become a one-stop shop for a diverse set of products, making it easier for customers to buy and manage their data center equipment.

Some analysts, however, have said IBM is trying to expand relationships outside its long-standing partnership with top network equipment manufacturer Cisco, which recently announced it was entering the server market — a move seen as a direct challenge to IBM and Hewlett-Packard Co.

IBM, which sells computer servers and software and technology services including outsourcing and automation, already helps to sell products made by Juniper, and Cisco, under resale partnerships.

An OEM deal provides a further incentive for IBM salesmen to promote Juniper products, and analysts have said that could be a way of retaliating against Cisco’s encroachment into IBM’s server space.

IBM, however, played down the rivalry and said it was bolstering its partnership with Cisco. IBM said it planned to resell Cisco’s new storage switches using fiber channel over ethernet (FCoE), an emerging technology that improves network speeds, when the products are launched in September.

IBM said it was also expanding its partnership with Brocade Communications Systems Inc, a much smaller rival to Cisco, to resell its FCoE switches.

“It’s not in response to anything that any one partner did,” Comfort said. “It’s our recognition of the need in the data center for a much more integrated and automated environment. This is about IBM’s agenda in the data center and how we want to leverage our partner relationships.”

Analysts said the expansion of various partnerships showed that while IBM was seeking to expand ties with Juniper and Brocade for diversity, it needed to remain friendly with Cisco.

Since many customers used a combination of products from both Cisco and IBM, it was too risky for IBM and Cisco not to ensure their products worked together seamlessly, they said.

“No doubt, they are going to be competing. But at the same time, they are ultimately trying to deliver value to customers,” said Seamus Crehan, a vice-president at research firm Dell’Oro Group.

“Cisco is a dominant player in ethernet switching and they have a very strong position in data center networking. So for IBM to offer their customers choice, they have to include Cisco.”

Copyright 2009 Reuters. Click for restrictions.

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