As a venture capitalist looking at investments for the enterprise data center space, it is clear that there are multiple contestants in the fight to control this market over the next few years. The question facing CIOs today is - who do you trust to control your next enterprise data center?

Many of the CIOs I speak with are currently deploying blade servers and virtualization software, so these vendors seem like contenders for winning control of the data center. Yet, as I wrote about for GigaOm, networking vendors such as Cisco Systems are also keenly interested in maintaining account control and relevancy in the enterprise data center.

The main contender for control of the enterprise data center are the blade server vendors: IBM, HP, Rackable, Verari and others. The movement toward blade servers for manageability and lower overall lower total cost of ownership has been underway for a number of years. As these blade servers get more powerful and at the same time more power and cooling efficient, organizations will be spending a significant amount of money on these devices – and that gives these vendors a step up on building trust and control in the enterprise data center. A number of CIOs that I have spoken with agree with this sentiment but are looking for these vendors to provide better manageability features for their blade servers. As you may expect, the benefits of trusting the control of your data center to a server vendor increases significantly if you have a homogenous implementation.

Manageability and the allocation of virtual and physical server resources is the mainstay for another leading set of contenders, the virtualization software companies: VMware, Citrix/XenSource and Microsoft. Each of these vendors sees servers in the enterprise data center as resources of compute power, memory and storage that they can manage in a virtual environment. This management layer reduces the server vendors to producing a commodity and brings control of the data center to the virtualization software companies. Nearly all of the CIOs that I have spoken to over the past year have a project underway or plan to have one with one of these virtualization vendors in the near future. The benefits of virtualization are well-known and the main areas of concern are the potential performance impact of virtualization and the time it will take to migrate legacy applications to this environment.

As server and virtualization vendors stake their claim to the enterprise data center, the networking vendors, such as Cisco Systems, may be looking to add to blade servers to their product portfolio. Cisco has recently announced a virtualization solution and needs products that complement this solution. Moving into blade servers and virtulization software also helps them to move away from being regarded a data networking-centric vendor. As Cisco moves through this transition it may be a challenge for CIOs to give control their servers, physical or virtual, to a vendor that may not have the legacy and breadth of experience working in these environments.

It seems clear to be from my vantage point in venture capital that the next few years will see server vendors, virtualization software vendors and traditional data networking vendors fight for control of the enterprise data center. Where are you placing your dollars (and bets)?

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