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Cisco virtualization-server challenge to HP and IBM?

VMware-investment leverage

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Cisco Systems, the reigning monarch of networking equipment, is preparing to challenge long-time compatriots Hewlett-Packard Co and IBM in a market that those two companies dominate: servers.

According to a report in Monday's The New York Times by Reg alumnus Ashlee Vance, Cisco's purported server line's selling point will be its "sophisticated virtualization software."

If so, Cisco will be helping itself not only by jumping into the current mass migration towards server-based virtualized services, but also - albeit to a much smaller degree - by taking advantage of the fact that it owns about two per cent of VMWare, the company that will presumably be supplying the aforementioned "sophisticated virtualization software."

With complex virtualization schemes becoming the rule and not the exception in up-to-date data centers, Cisco is in a strong position to use its networking savvy to bind servers together into one big, happy - and highly efficient - virtualized family.

HP and IBM, which have for years created a strong market for Cisco's networking hardware, may be none too pleased to see their former partner and mutual beneficiary muscling its way into their territory.

Not to worry, said Cisco. The company's chief technology officer Padmasree Warrior said Cisco sees the move "not as a new market, but a market transition."

Exactly what level of the server market Cisco plans to invade first is not yet known - the company hadn't respond to our requests for more information by press time - but according to our earlier report, the attack would begin at the blade level, and according to the Times, the incursion could start "as early as March."

Whenever it does begin, however, expect HP to become more agressive with its own ProCurve line of networking equipment, and the IBM and Cisco alliance to feel the strain.

Times are tough in the IT market, and tough times engender tough battles. As we could be about to witness. ®

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