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.