How Brocade Might Connect with Hitachi’s UCP

Hitachi has been said to practice passive — even stealth — marketing. Whatever you call the company’s approach to self-promotion, you’d probably agree that it tends to hide its light under a bushel, at least here in North America, where the company tends to be perceived as an industry afterthought.

That’s why I don’t feel particularly bad about my abject ignorance of Hitachi’s portfolio of networking products, produced through a joint venture with NEC called Alaxala Networks Corporation. Apparently, according to information on Alaxala’s website, Hitachi owns 60 percent of the company and NEC holds the remaining 40 percent.

I was not alone in being in the dark about Hitachi’s status as a purveyor of network infrastructure. Considering that some of Hitachi’s own employees don’t seem to know about this arrangement, I am in relatively good company.

It’s obvious that Hitachi, despite the existence of Alaxala, hasn’t vaulted to the top of the enterprise-networking charts in North America, or in most other parts of the world.

Still, Alaxala could be an important ingredient in Hitachi’s answer to Cisco’s Unified Computing System (UCS) and to HP’s aptly named HP Converged Infrastructure.

Hitachi’s rejoinder to Cisco and HP’s offerings is called the Unified Compute Platform (UCP). It isn’t on the market yet, but it will be released early next year. It will comprise blade servers, storage and network hardware, plus management and orchestration software. Microsoft’s System Center is in the mix, too, as are Microsoft’s Hyper-V virtualization technology and and SQL Server. VMware’s ESX hypervisors also will be supported.

One of the missing pieces is fibre-channel storage networking, but Hitachi representatives, in conversations with technology blogger Nigel Poulton, intimated that the company “might be working” on fibre channel. Then again, as Poulton cautions, that conversation involved significant language barriers, so meaning might have been lost or misconstrued in translation.

As it turns out, the Hitachi Universal Storage Platform V is a key component of the Hitachi Unified Compute Platform (UCP). In that context, it is worth noting that Hitachi already has an existing relationship with Brocade. That relationship involves Brocade providing extensive SAN-switching support for Hitachi’s Universal Storage Platform V.

I think you can see where I’m going here. I’m not the subtlest of characters. There’s a very real possibility that Brocade will be involved with Hitachi’s UCP initiative. To what extent, whether the relationship might be restricted to Brocade’s SAN gear or might also include its Foundry Ethernet switches, remains to be seen.

It’s a relationship worth watching.

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At NSN, Nokia and Siemens Still Grope for Exit

Let’s say two companies are involved in a joint venture that’s been an unhappy marriage. The relationship isn’t as toxic as the former partnership between Mel Gibson and Oksana Grigorieva, but it hasn’t been a day at the beach, either. Neither partner wants to remain in the business alliance; they’re both looking for a dignified exit.

With logic and reason as your guides, what would you expect their next moves to be?

Yes, one partner might approach the other, looking to sell its interest in full. It’s also possible that one company might sell its interest to an approved third party, offering a right of first refusal to its JV partner. It’s also conceivable that both partners would put the joint venture on the block, hiring an agent to discreet present it to private-equity shops and strategic buyers. They might even consider putting some lipstick on the pig and trying an IPO, hoping to benefit from auspicious timing and favorable lighting.

Okay, now throw logic and reason to the wind. What would you do now?

Maybe, as Nokia and Siemens have done at Nokia Siemens Networks (NSN), you’d compound the unhappy union by acquiring a floundering telecommunications-equipment business from a vendor eager to unload it. Misery loves company, after all, so why not plunge headlong into the pit of despair? If you put on your absurdist bifocals, the move just might make sense on a surreal existential level. But we’re talking business, not Dadaism.

Just when I think there’s nothing in this crazy industry that can surprise me, something does just that. I admit, I’ve been puzzling over why NSN would buy Motorola’s networks business, which retains some wireless-operator customers, especially in North America, but also carries hefty baggage in the form of a product portfolio predicated on technologies (a large portion of its 3G gear, and its WiMAX 4G offerings) that have gone out of fashion. NSN will pay $1.2 billion for the Motorola unit, and — other than some modest scale and a minor ostensible market-share gain — I don’t see how it derives much benefit from the transaction.

Squeezed from all angles, from traditional competitors Ericsson and Alcatel-Lucent and from hard-charging Huawei — when it’s not fighting an intellectual-property lawsuit launched by, of all vendors, Motorola — NSN isn’t a thriving business. As I have mentioned previously, its joint-venture partners have taken massive goodwill writedowns since forming the business back in 2007.

Digressing for a moment, I want to note that I am not a proponent of joint ventures. Many European companies seem favorably disposed to them, and I understand the underlying reasoning behind them: pool resources, share and mitigate risk, eliminate distraction to one’s core business. Unfortunately, they’re usually unworkable in practice. It’s hard enough getting people from the same company to agree on strategy and to execute successfully. When you have the political machinations inherent in a joint venture, well, the job becomes nearly impossible.

Getting back on track after that brief digressive detour, NSN is in a tough spot.

How tough became clear to me after I read an article in the Wall Street Journal yesterday. Neither Nokia nor Siemens wants to continue participating in the joint venture, but they can’t find a way out. It’s as if Jean-Paul Sartre has rewritten No Exit and staged it in a boardroom. Hell is having to deal with other people in a joint venture.