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Cisco’s launch of what it calls a Unified Computing System—putting together
networking devices, blade servers, virtualization and other technologies into a
system designed to simplify data center implementation, management and
administration—effectively takes Cisco beyond its networking roots to compete
against server vendors such as IBM and

But the fact that Cisco is muscling in on the high-end x86 server turf of HP
and IBM—while huge news in itself—may be
secondary to the availability of a system that could simplify some of the
complex tasks around data centers and virtualization—tasks that prevent many
companies from taking advantage of all of the benefits of virtualization

“It isn’t just a new technology. It’s an approach to the data center and an
approach to virtualization which we think is very unique in the industry,” says
Cisco CEO John Chambers in a video released
over the Web.

Cisco says the goal is to cut capital expenses by 20 percent and operating
expenses by 30 percent, although the company acknowledges it doesn’t expect
customers to simply rip and replace their existing infrastructures. Rather, the
company will target customers during natural refreshes or expansions.

And when that happens, the data center customer’s desire to buy the solution
that takes advantage of the benefits of virtualization rather than try to piece
together the individual components themselves puts Cisco’s new system in a
strong position, according to Tim Stammers, senior analyst at advisory and
consulting firm Ovum.

“The ability to virtualize transport connectivity and networks is beyond
[virtualization vendors’] current scope,” says Stammers, which is what makes it
hard for other network services to follow virtualized servers that move from
one physical machine to another. “Thus, Cisco’s move could signal a milestone
in the convergence of computing and networking.”

Cisco’s unified computing solution combines Cisco’s networking components
with VMware’s virtualization technology, with Cisco-branded x86 blade servers
based on Intel’s forthcoming Nehalem next-generation Xeon server processors. It
provides support for Ethernet, Fibre Channel, Fibre Channel over Ethernet or
iSCSI, providing access to both storage area networks (SANs) and network-attached
storage (NAS) while supporting their legacy transport investments. In addition,
the entire solution can be managed through the Cisco UCS Manager.

Stammers says the move puts Cisco in a strong position.

“Selling the whole enchilada means providing the corn bread wrapping as well
as the filling,” says Stammers. “Unlike management systems, servers are
commodities, but they are an essential part of the package.

“If Cisco’s customers have to buy their blade servers from HP or Dell, then
the door is open for either of those two to offer their management tools to
customers, or to tailor their blades to work better with those tools. Moving
into more direct competition with those players—and with other systems
management players such as IBM and BMC—is
a price that Cisco cannot avoid paying unless it wants to be sidelined in the
future,” Stammers adds.

And while Cisco’s expertise in these new technology markets may be
questioned by some observers, Stammers notes that Cisco has previously enjoyed
success in entering new markets.

“Cisco’s most obvious recent expansion onto new turf was the move into the
specialist storage networking market, which it made around seven years ago,” he
says. “Some doubted Cisco’s ability to do this, but it did, and well.”