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March 16th, 2009, 05:21 PM

Cisco to sell servers for data centers

Monday March 16, 11:21 am ET

NEW YORK (Reuters) - Cisco Systems Inc (NasdaqGS:CSCO - News) said on Monday it will sell computer servers targeted at data centers, a move that pits it against partners such as IBM (NYSE:IBM - News) and Hewlett-Packard Co (NYSE:HPQ - News).

The network equipment maker introduced the Unified Computing System, designed to incorporate computing, storage and virtualization technologies, including those developed by EMC Corp (NYSE:EMC - News) and VMware Inc (NYSE:VMW - News).

Owners of the new system can cut capital expenditures by 20 percent and operational expenses by 30 percent, according to Cisco.

Led by Chief Executive John Chambers, Cisco has been diversifying from its traditional router and storage business to a larger set of products, including video conferencing systems and software.

The company's expansion into the server market is seen as a direct challenge to IBM and HP, which, as its vendor partners, have helped to sell Cisco's network equipment to mutual customers.

Besides EMC and VMware, other Cisco partners for its new data center strategy include Intel Corp (NasdaqGS:INTC - News), Microsoft Corp (NasdaqGS:MSFT - News), BMC Software Inc (NYSE:BMC - News) and Accenture Ltd (NYSE:ACN - News)

(Reporting by Ritsuko Ando; Editing by Derek Caney)

March 16th, 2009, 08:08 PM
I read they are teaming up with Red Hat regarding these servers so this may be a good thing for Linux in general. Eventually they may spread out and include Ubuntu Server but for now it is probably wise of them to use somebody with a lot of experience (and name recognition, for servers) in the market.