On Monday, Cisco ended months of speculation by revealing its first server computer at the company’s headquarters here. The product encroaches on the turf of Cisco’s traditional partners like Hewlett-Packard, I.B.M. and Dell, which have sold billions of dollars of computers over the years that flank Cisco’s core networking hardware, routers and switches. But John T. Chambers, the chief executive at Cisco, insisted the time was right for the company to turn more aggressive.
“What we are really talking about here is catching the next market evolution,” Mr. Chambers said, during a news conference.
Mr. Chambers said the rise of virtualization software has created the need for new types of server computers. Virtualization software, made popular by VMware, lets businesses run more software applications on each physical server, helping them save on capital costs.
Virtualization also muddies the boundaries between servers, storage systems and networking equipment, which must now deal with more fluid virtual applications rather than dedicated software.
With its Unified Computing System, Cisco bundles server, storage and networking systems in a single product. Cisco says it can run hundreds of virtual servers on a single machine.
Analysts said the product is the biggest strategic shift in the server market to occur in years. “This is definitely a transformative play,” said James Staten, an analyst at Forrester Research, who attended the Cisco news conference. “This is war and a direct frontal assault on I.B.M. and H.P.”
While servers are far less profitable than networking equipment, Cisco has worked with software makers like VMware and BMC to sell software and hardware together in order to command some of the highest profit margins in the server industry.
Source: nytimes
“What we are really talking about here is catching the next market evolution,” Mr. Chambers said, during a news conference.
Mr. Chambers said the rise of virtualization software has created the need for new types of server computers. Virtualization software, made popular by VMware, lets businesses run more software applications on each physical server, helping them save on capital costs.
Virtualization also muddies the boundaries between servers, storage systems and networking equipment, which must now deal with more fluid virtual applications rather than dedicated software.
With its Unified Computing System, Cisco bundles server, storage and networking systems in a single product. Cisco says it can run hundreds of virtual servers on a single machine.
Analysts said the product is the biggest strategic shift in the server market to occur in years. “This is definitely a transformative play,” said James Staten, an analyst at Forrester Research, who attended the Cisco news conference. “This is war and a direct frontal assault on I.B.M. and H.P.”
While servers are far less profitable than networking equipment, Cisco has worked with software makers like VMware and BMC to sell software and hardware together in order to command some of the highest profit margins in the server industry.
Source: nytimes
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