Cisco to go up against HP, IBM

New York - Cisco Systems threw down the gauntlet to erstwhile partners Hewlett-Packard and IBM on Monday and announced it would begin building computer servers.

John Chambers, the chief executive of Cisco, which has enjoyed spectacular growth making networking hardware such as routers and switches for the internet and for corporations, unveiled the shift into an area dominated until now by HP and IBM.

Cisco's move into building blade servers is part of its Unified Computing System (UCS), a next-generation data center platform for corporations seeking to boost efficiency and save energy costs.

Firms such as Microsoft, Accenture, VMware, BMC Software and EMC are joining Cisco in the UCS project, offering their expertise in software and other areas such as "virtualisation," which increases efficiency by allowing a single computer to perform multiple tasks.

HP, IBM and Cisco had been working largely as partners until now in what the New York Times has described as a "symbiotic" relationship.

HP manufactured the servers for the internet and for corporate data centers, where companies store and process information, and Cisco provided the switches and routers which tied them together.

But Cisco's chief technology officer, Padmasree Warrior, told the Wall Street Journal the San Jose, California-based company would now be competing with HP.

"We're going to compete with HP. I don't want to sugarcoat that," she said. "There is bound to be change in the landscape of who you compete with and who you partner with."

Ken Dulaney, an analyst at market research firm Gartner, said the move by Cisco was not without risk.

"This is a huge move for Cisco competing now against IBM and HP in a market in which they have little experience," he said.

"Cisco had to make this move to defend itself from HP who is moving into networking," he added. "But the challenge to make it successful will be significant."

- AFP