Cisco Marks One Year Anniversary in Storage with Strong Leadership and Growth
August 20, 2003
This week marks the first anniversary of Cisco Systems announcement to enter the storage area networking (SAN) infrastructure market with the Cisco MDS 9000 Series of switching products. Since announcing the product line and its intentions to acquire SAN developer Andiamo Systems last August, Cisco has worked hard to establish a strong presence in the SAN switching industry. Soni Jiandani, vice president of marketing for the Storage Technology group, talks about the past year and her future hopes for the Cisco SAN product group.
Has it been a good year for Cisco SAN products?
Absolutely. In August 2002, we announced our intention to acquire Andiamo and market the Cisco MDS 9000 product series. Since then, we've met our December 2002 first customer shipment goals and have delivered on each of the product development milestones we outlined at the launch. Just as importantly, we have secured reseller and service/support agreements with the top four storage array companies—EMC, IBM, Hewlett-Packard, and Hitachi Data Systems. These four companies account for nearly 85 percent of all SAN switching sales today. That we were able to sign and qualify with those vendors in less than one year, is a major accomplishment and very notable in this industry. With the help of these vendors, we now have more than 140 new customers, and have announced some major customer wins, such as AXA Technology which is a global deployment, consisting of 8,000 SAN ports over the next 6 years [http://newsroom.cisco.com/dlls/prod_071503.html]. It shows that we are serious about succeeding in this market. Thanks to a great team, we've had a very good year.
What is the Cisco position in the SAN switching market today?
The SAN switch market is approximately a $1 billion market today, and growing rapidly. It's expected to grow to between $2 billion and $3 billion by 2006, according to market research firms. Cisco hopes to gain the number one or two market position in SAN switching within a few years, but we will have to stay focused. The SAN market is growing, but it's also an area full of strong companies including several very capable startups. We do not take the competitors in this space lightly. We are the newcomers. But given our high levels of quality and innovation across our product portfolio, Cisco is more than up to the challenge.
How has Cisco managed to accomplish so much in such a short time?
Our market experience in other areas of networking helps Cisco to identify needs in the SAN switching market and develop innovative products that address those needs. The SAN market today is similar to where the data networking and LAN switching markets were 10 years ago. Back then, LANs were designed for specific applications like printer sharing and software application sharing or to serve the networking needs of a specific workgroup. What Cisco was able to do a decade ago was scale those networks to larger sizes, pump intelligence into them, and make them reliable, secure and very manageable. That is exactly what we want to achieve with SAN switching today—create larger storage networks with endless utility that are faster, more reliable, and more secure. We've taken a lot of the innovation that we've learned from data networking and applied that to SAN switching products. Consider the example of virtual SANs, or VSANs, which is analogous to virtual LANs (VLAN) technology for data networking. At the end of the day, SANs are about networking and Cisco is a premier company for networking. We are going to use what we know about networking to make SANs that much more useful for customers.
What have been the biggest challenges in entering the SAN market this year, and how did Cisco overcome those challenges?
By far, the toughest challenge to Cisco in this and other markets this past year was the downturn of the economy. As a brand new entrant to a market on the cusp of taking off, the downturn couldn't have come at a worse time. Under any circumstance it's not easy getting a new product out the door. There is an unbelievable amount of engineering effort and development resources required. Economic uncertainties made the challenge of entering the market that much harder. We've had to convince customers to buy, when everyone is scaling back. In this tough environment, our level of execution and commitment and the progress overall has been very good. Beyond that, when you consider these products were conceived of just a few years ago, the level of innovation and number of technological breakthroughs we've seen in that time is quite an achievement.
What are the future plans for Cisco SAN switching products?
We've accomplished the goals set so far. We've gained customers, energized the market, created awareness, and validated differentiation for our SAN products, established key distribution partnerships, and delivered on engineering and manufacturing schedules. Continued success is now a matter of executing our strategy and gaining market share. In the SAN marketplace, we know that we have some catching up to do. We respect that there are a lot of good competitors out there for SAN customers. So it's that much more important to ensure we keep focused and working hard toward our goals. On the technical front, we will continue to innovate and introduce general enhancements for the Cisco MDS 9000. But specifically speaking, we are excited about our joint development with leading storage software vendors to migrate their applications onto our SAN switches, which will introduce a new level of intelligence into the SAN switching arena. So, as we execute in gaining market share and advancing SAN technology, we will be going full-speed ahead.