Cisco: On-Prem Storage 50% Better TCO Than Cloud

Cybersecurity may be ’s current poster-child for revenue growth, but the company was also busy in the datacenter, with the launch of a storage-optimized server category, the . Designed to address the needs of data intensive workloads such as Big Data, and for deploying software-defined , object , and data protection solutions, Cisco is positioning its solution as ‘Data. Unstored.’

Less than 40% of stored enterprise data is ever used to create insight, but new applications such as video analytics, diagnostic imaging, streaming analytics, and machine learning demand and create data that is “un-stored” and actively processed in real time, states the company. It says traditional static IT infrastructure no longer works, while storage solutions can become expensive.

The modular server, which features up to 600 terabytes of local storage in a , offers a number of benefits, including:

-over 50% lower total cost of ownership (TCO) compared to public cloud (specifically Amazon Web Services);

-reduces CapEx by up to 34%;

-lowers ongoing management by up to 80%;

-reduces cabling by up to 70%;

-takes up to 60% less space; and,

-consumes up to 59% less power.

It’s easy to understand why Cisco might be interested in another server application. While server revenue declined 0.8% year over year, the public cloud services market is expected to grow 17.2% this year, to $208.6 billion, with the highest growth coming from cloud system infrastructure services (infrastructure as a service [IaaS]), which is projected to grow 42.8%. Data and business analytics (BDA) revenues will grow from $130.1 billion in 2016 to more than $203 billion in 2020, a compound annual growth rate of 11.7%.

Amazon Web Services is the undisputed leader of public cloud services, with 45% of worldwide revenues, twice as much as Microsoft, Google and IBM combined. Together, the three competitors amount to less than 20% percent of infrastructure-as-a-service, or IaaS, revenues in Q3 2016.

“There’s a perception that the cloud is not only faster, but also a lower cost versus on-premise and that’s just not the case,” said Todd Brannon, director of product marketing at Cisco. To house 420 TB of cloud storage for three years on Amazon Web Services’ Simple Storage Service (Amazon S3) costs around $550,000, compared with about $250,000 to house the data on the on-premise S-Series, Cisco said.

In a one-on-one with IT Trends & Analysis Brannon said the modular approach will “allow customers to rightsize the infrastructure for the workload.” It’s less than half the price of public cloud, and provides “a completely modular platform approach to storage-optimized service.”

Cisco is promising very attractive TCOs and ROIs versus AWS, but if we’ve learned anything from the public cloud market, it’s that ‘race-to-the-bottom-pricing’ means comparisons can be out of date in days, never mind months or years. Last month Microsoft announced substantial price cuts for its Azure offering, and AWS will doubtless respond accordingly. After the last bloodbath — October 2013 to July 2014 — Amazon lowered cloud pricing by an average of 36%; Google matched it with a 35% price reduction while Microsoft countered with a 24% cut. IBM’s SoftLayer was last to the discount party with a 60% reduction of storage charges.

Bannon said the initial target audience is the UCS installed base, which currently numbers more than 52,000 customers. It requires no new learnings, it’s “literally plug and play in the UCS environment,” he added.

However, the new category will appeal to a much broader audience with its massive scalability, extreme high capacity and extremely high performance. He said Cisco is introducing the “ability to scale in a manner similar to the [public] cloud but really beat the cloud at its own game in TCO.”

Moving forward, Cisco plans to expand this new category, and has a number of products already in the pipeline, said Bannon. “This type of modular architecture is the blueprint for where UCS is heading.”

In other news, Cisco also upgraded its ONE Enterprise Cloud Suite, a hybrid cloud software solution twith a self-service portal that can be tailored for end users, application developers and IT professionals. It can now be deployed to over 20 different data center, private and public cloud environments, and offers new annual subscription licenses in one, three, and five-year options.

The suite has four offers, which can be used singly or in any combination: Infrastructure Automation; Service Management; Cloud Management; and Big Data Automation. Cisco DevNet has also revamped the UCS Developer Center to make it easier for developers to leverage the UCS Manager and UCS Director APIs for DevOps automation.

Finally, Cisco is also making it easier to acquire its UCS offerings with Open Pay from Cisco Capital. Customers should be able to better align future payments to actual usage by paying for variable capacity as it is needed.

Author: Steve Wexler

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