Cisco unveils its first server computer

17 March 2009

California-based networking hardware provider Cisco Systems, has unveiled its first server computer. Its approach, called a unified computing system, packages new Cisco networking equipment with Cisco's first blade server, storage hardware and virtualisation software.

The move expands Cisco's role beyond networking needs, including routers and switches, into the new territory of server manufacturing. This could bring the company into direct conflict with its partners like IBM, Hewlett-Packard, and Dell, which have long been sourcing their peripherals from Cisco.

Cisco's packaged system, which will go on sale in the second quarter of the year, is said to provide an especially flexible and efficient architecture, enabling information technology managers to get more out of their hardware. By extending its reach, Cisco also hopes to vie for a larger share of spending from data centres.

Cisco chief executive John Chambers yesterday said in a videoconference, ''What we are really talking about here is catching the next market evolution.'' He said the rise of virtualisation software had created the need for new types of server computers.

"It gives us a chance to be the leading company not just in communications but in IT," Chambers added.

Virtualisation software, made popular by VMware, in which Cisco acquired a $150-million worth stake in July 2007 before VMWare took it public, lets businesses run more software applications on each physical server, helping them save on capital costs. It also loosens the boundaries between servers, storage systems and networking equipment, which now deal with more fluid virtual applications than dedicated software. (See: After Intel, Cisco to invest $150 million in VMware)