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No fear at Sun

As for Cisco entering the server racket, the big server players are shrugging off the California launch. At least publicly, anyway.

"We're anticipating that life as we know it will change here forever in the server business," says Sun's John Fowler wryly. Fowler is general manager of that company's Systems Group, which designs and sells its servers, storage, operating systems, and, yes, switches. Sun makes InfiniBand switches for supercomputing workloads and also embeds networking interfaces in some of its processor designs.

"The server and networking companies have been skirmishing with each other since the dawn of time," Fowler says more seriously. "The ARPAnet was built using DEC PDP-11s running Berkeley Unix and running router software, after all. And while I think Cisco is going to get a bit of traction in the press, and I do believe that competition is a good thing, obviously becoming a player in the system market requires it to be a long-term game. It is really going to require a significant amount of work and investment over a long period from Cisco."

With revenue declining and profits declining even faster in its second fiscal quarter of 2009 - sales were down 7.5 per cent to $9.1bn (£6.5bn) and profits were down 27 per cent to $1.5bn (£1.1bn) - Cisco would seem to be ill-suited to do anything but stick to its networking knitting and focus on fabrics.

But with $29.5bn (£21.1bn) in cash and equivalents in the bank (or hopefully under CEO John Chambers' mattress, banks being what they are today), server makers under margin pressure, and IT shops looking for any way they can to improve operations and lower costs, now is as good a time as any to try something new. And that's the Unified Computing strategy, of which the California blade server and the Nexus 1000V virtual switch are but a part.

Cisco, of course, is a brand name CIOs know, but translating that name into the server market could be tough. For example, Cisco already took an oblique stab at the server-virtualization market when it shelled out $250m (£179m) in cash to acquire the InfiniBand switch and out-of-band server-virtualization experts at TopSpin Communications in April 2005. The company dabbled a bit with the product (remember vFrame?), and when InfiniBand didn't take off in the data center and VMware took over server virtualization, TopSpin just kinda went away.

The contrary example is Cisco's entry into Fibre Channel (FC) switches for storage-area networks, a road it got on about seven years ago. There were a number of players when Cisco jumped in, but Cisco's aggressive entry in the FC switch market has forced industry consolidation to the point that today it has come down to just Brocade Communications and Cisco.

"It took them longer than they wanted, but Cisco has undoubtedly done well with Fibre Channel," explains Tim Stammers, senior infrastructure analyst at Ovum. "They are in Fibre Channel to stay, and their market share is growing."

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