Cisco Systems Inc’s foray into the computer server market will pit it against long-standing partners IBM and Hewlett-Packard, and could trigger a new wave of deal making in the tech industry.
Cisco is set to introduce on Monday a blade server — a powerful server computer designed to save space — and a range of computing products for data centers, using technology from storage company EMC Corp and virtualisation software maker VMware Inc. Other Cisco partners include Intel Corp, Microsoft Corp and BMC Software Inc, according to a person with knowledge of the announcement, who was not authorised to speak publicly about it.
As the dominant provider of routers and switches that direct Internet traffic, Cisco’s big advantage is that its network equipment is already ubiquitous in data centers.
Analysts expect the company, led by chief executive John Chambers, to combine its new servers with software and storage products to help customers manage their data centers more cheaply and efficiently. Cisco declined to disclose any details of the move, which is internally code-named California.
By expanding into servers, Cisco would be mounting a direct challenge to IBM and HP, which have helped to sell Cisco’s network equipment to mutual customers.
Analysts said IBM and HP may pursue alliances or acquisitions to compete with Cisco. “The possibility is that Cisco could end up squeezing out IBM, Hewlett. I think Hewlett and others have been ... thinking about alternatives,” said Avi Cohen, an analyst at Avian Securities. Companies such as data equipment maker Brocade Communications Systems Inc may become acquisition targets, he added.
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