Cisco Partners: OEM Agreement With Nutanix Would Put Pressure On Dell

As Cisco Live gets underway this week in San Diego, Calif., Cisco partners are still wondering what the networking giant's play is going to be in the hyper-converged infrastructure market. One option espoused by hopeful partners is the possibility that Cisco is eyeing an OEM agreement with Nutanix.

Although a rumor circulating last month that Cisco planned to acquire the hyper-converged specialist was shot down, an OEM agreement between the two San Jose, Calif.-based companies is a "real" possibility that would give the networking giant a "true" hyper-converged offering, partners said.

"An OEM agreement [with Nutanix] is definitely something that could be coming down the line and whether it's an OEM or even some loose partnership with Nutanix, no matter what they do, I would say it's a good call for them," said a top executive at a Cisco Gold partner who declined to be identified. "Ultimately they're moving into this space and they're establishing partnerships with the industry leaders. ... They have to do something soon."

[Related: 5 Reasons Why A Cisco-Nutanix Licensing Agreement Would Make More Sense Than An Acquisition]

With Nutanix holding around 52 percent of the hyper-converged market, according to research firm IDC, an OEM agreement could offer customers Cisco UCS [Unified Computing System] servers with Nutanix software pre-installed -- an offer partners say would put pressure on Dell.

"Cisco can pull something very compelling together that would put a whole lot of pressure on Dell that they might not be able to compete with," said a top executive at one 2015 CRN Solution Provider 500 company that partners with Dell and Cisco. "If you buy a Nutanix offering today, it gives you consolidated ease of management and virtual infrastructure, but it doesn't do everything. You've still got to have a router, you've still got to have wireless, still got to have phones. To me, if I really want to knock out all the problems of remote offices, branch offices, etc., Cisco can pull something compelling together."

A Cisco spokesman said the company "cannot speculate on the Nutanix rumor." Dell had not responded to a request for comment at the time of this story's publication.

Nutanix currently has an OEM agreement with Dell. Nutanix CEO Dheerja Pandey said in a statement last month responding to the Cisco acquisition rumor that his company is "firmly committed" to its partnership with Dell and Nutanix is on the path toward becoming a public company in the "not-so-distant future."

On Monday at Cisco Live, Nutanix rival SimpliVity unveiled that its hyper-converged infrastructure will support Cisco UCS Director to better optimize private and hybrid cloud environments. This adds upon the already established partnership between the two companies and will now include SimpliVity's Data Virtualization Platform, a data architecture that creates a single shared scale-out resource pool that deduplicates, compresses and optimizes data at inception across all tiers globally, according to a statement.

Robert Keblusek, senior vice president of business development at Sentinel Technologies, a Downers Grove, Ill.-based Cisco Gold partner, said Cisco is currently placing its hyper-converged bet in multiple places, similar to its converged infrastructure strategy.

"Cisco is betting on multiple players right now in the hyper-converged space and seeing where things go," said Keblusek. "With Cisco, right now at least, even in converged infrastructure, they've essentially given customers multiple options -- they have a NetApp and an EMC version, partnerships with Nimble and Hitachi [Data Systems] -- even IBM they have a relationship with in the converged market. ... Hyper-converged looks like a similar strategy, at least on the surface."

Sources also told CRN that Cisco held talks with flash storage vendor SolidFire earlier this year about an acquisition or strategic partnership, but were unable to agree on terms.

Partners said an OEM agreement with Nutanix would give partners a leg up against competitors because "nobody" else could match the networking giant's portfolio reach in the market.

"If they could champion this with its UCS business unit, take Meraki, Cisco's [Intelligent WAN], voice, and put everything in a package, I think that would be very compelling and cost-competitive option compared to piecing it together like people do today," said the executive with a CRN SP 500 solution provider.

Keblusek said it would also be easier for potential Nutanix customers to choose a Nutanix-Cisco offering over competitors' solutions because they are already familiar with Cisco in their data center.

"I can see those similar types of advantages come into play for Cisco with the OEM relationship [with Nutanix]," said Keblusek. "OEMing it would be a definite advancement for Cisco in hyper-converged."

PUBLISHED JUNE 8, 2015