Blog Post

With Servers, Now Cisco Fights Partners

It’s nice to see The New York Times and others finally catching up to us by reporting that Cisco Systems (s CSCO) is working on a new kind of server. We first reported the development of these new servers back in March 2008, essentially a lifetime on the web, which has short memories but (almost) everlasting links. There aren’t any new details in the story except why virtualization is the driving force behind Cisco’s moves.

The Times does a good job of summing up the facts of what we have been reporting all along: Cisco is pretty serious about the data centers. One takeaway: Cisco can gobble up VMware or EMC (s EMC) or both, if it wants to. Of course, those deals have been rumored as well.

When it comes to the server market, the San Jose, Calif.-based router maker is in for hand-to-hand combat. It faces a bloody battle against IBM (s IBM), Hewlett Packard (s HWP) and Dell (s DELL), who are all used to making a living off lower-margin boxes. I am not sure Cisco would be able to command a premium in this market, however fancy its products might get. HP and Dell are making strides against Cisco in the enterprise when it comes to lower-cost networking gear.

“There will be massive competitive reactions from both IBM and HP, and we expect this will lead to a new wave of industry consolidation,” Brent Bracelin, an analyst for Pacific Crest Securities, told The New York Times; he believes this will help Cisco rivals Juniper Networks (s JNPR) and Brocade (s BRCD).

14 Responses to “With Servers, Now Cisco Fights Partners”

  1. Don Draper

    Details about this have been bouncing around quite a bit lately. Sounds like it’ll be a blade-server in a Nexus chassis (so integrated networking), with some advanced/expanded memory management (via memory daughter card) and enhancements to QoS that will extended up the Application layer (as far as VMware can see). Yes, it’ll be a channel / partner conflict nightmare, but where else is Cisco going to find their next $1-5B/yr market…..surely you don’t think it’ll be in consumer, do you?

    btw – CTO Warrior had nothing to do with this. It was done by the Nuova team, which is back in charge of Cisco again (Mario, Prem, Luca, etc.).

  2. The most interesting aspect here is that there are ongoing technological advancements even with the eoonomy being less than stellar. My main hope is that in the midst of this growth that digital security is held in the highest of importance.

  3. Om:

    Our CTO, Padmasree Warrior, wrote a blog piece late yesterday on “unified computing” which states, in part: “Lately, there has been a lot of speculation by the technorati that “something is going on over at Cisco!” I am sure you have all read the blogs and reports in traditional media asserting that Cisco is going to enter new markets, compete for new business, and build new products. The answer? Yes, Yes and Yes, of course!”

    See full blog post here: