Cisco Plans Bold Move Into Server Business, Enters Arena With HP And IBM

According to the NY Times, Cisco Systems is planning a big push into the server market, essentially entering into competition with its historical partners HP and IBM (who declined to comment on the story).

A risky move for Cisco, but a very interesting one.

The product — a server computer equipped with sophisticated virtualization software — is a bold but risky move by Cisco into an unfamiliar, intensely competitive market that typically produces far lower profits than Cisco makes from network gear. But it reflects the company’s ambition to grow beyond its roots as the so-called plumber of the Internet to offer everything from instant messaging software to digital stereos.

As The Register points out, VMware technology is likely the foundation of the virtualization part, since Cisco still owns part of the company (about 2%). Cisco is not disclosing any specifics though, but the NY Times learned that Cisco could show off the first of its new systems as early as March.

Acquisition rumors between Cisco Systems and VMware (and even EMC in full) are sure to flare up again.

A good follow-up article was published on Forbes.

About the author

I'm a blogger, entrepreneur, conference organizer, social media consultant, startup advisor and allround web addict, based in Belgium, Europe. I'm a writer at TechCrunch and managing editor of Virtualization.com.

One Comment

  1. Our CTO, Padmasree Warrior, wrote a blog piece yesterday on “unified computing” which states, in part: “Lately, there has been a lot of speculation by the technorati that “something is going on over at Cisco!” I am sure you have all read the blogs and reports in traditional media asserting that Cisco is going to enter new markets, compete for new business, and build new products. The answer? Yes, Yes and Yes, of course!”

    See full blog post here: http://blogs.cisco.com/news/comments/introducing_unified_computing_to_the_data_center/

    Reply

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