Is Cisco encroaching on the blade server market?

It's been widely reported that Cisco is getting into the blade server business, long dominated by HP, IBM and Dell. If the rumor is true that the networking company is going to introduce blade servers in 2009 to complement its switches and routers and especially its Cisco Nexus 5000 switch, it could mean that Cisco-loyal customers could rush to adopt it. And it could disrupt the server market and Cisco's partnerships with HP, IBM and Dell

Network World first reported the Cisco blade server rumor saying that the blade server, which is code-named California, is comprised of Intel x64 processors running Linux. The blade would be embedded in the Cisco Nexus 5000 switch and be part of a single network, server and storage fabric that incorporates the InfiniBand interconnect, which Cisco acquired from TopSpin in April 2005.

While Cisco would neither confirm nor deny that it is getting into blade servers, other sources, such as Vikram Mehta, CEO of Blade Network Technologies, say they have seen the product and which they say would fit well into Cisco's unified data center strategy.

Will introducing a blade server help Cisco make the transition from a networking vendor to an IT vendor? I don't think so. The company is too entrenched in the networking business to be able to focus effectively on the server space, except for as I said before on Cisco shops that might buy a blade server because they have a Cisco infrastructure.

When Cisco announced that it was getting into storage in 2000 with its acquisition of NuSpeed Internet Systems, industry pundits pooh-poohed the idea – they said that Cisco knew nothing about storage. But what they didn't account for was that Cisco knew everything about transport – Ethernet transport as it might be. If Cisco were to dip into the server market with a blade server, it would ostensibly make the final link to a unified data center – it would possess all the links –server, interconnect, networking, storage.

Cisco's entry into the blade server market would also jeopardize its partnerships with IBM, HP and Dell, which all resell its equipment and which also are focusing on a single unified data center space.

Adding another player to the blade server market would stimulate growth. IDC already reported that factory revenue for blade servers grew 53.7% year over year. According to IDC, blade servers accounted for 9.2% of server market revenue. HP led the blade server market with a 46.9% market share and IBM held the No. 2 position with 30% share.

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