In a bold and very aggressive move, Cisco this week announced its new line of commercial servers that specialize in virtualization.
I don’t know about you all, but I find this interesting, yet puzzling.
First off, this will be Cisco’s debut into an already competitive market. You wouldn’t imagine there would be much of a customer pool left when competing with giants such as Dell, HP and IBM, but Cisco seems to think so.
Of course, Cisco is no small player either boasting annual revenue $40 billion and 65% gross profits in the networking market.
However, the puzzling part is why it would want to start fresh in this fierce market where vendors generally only make a 25% profit margin anyway? Also, what kind of impact will this have on Cisco’s relationships/partnerships with companies like IBM, Dell and HP? I wouldn’t imagine there are a lot of fuzzy, good feelings about this.
He said, “This is war and a direct frontal assault on IBM and HP.”
On top of that comment, HP also had some strong statements of its own regarding this launch: “It’s appropriate that Cisco launched their server in a museum.” taking jabs at the concept design of these servers.
Going in for the kill, HP added: “Would you let a plumber build your house?”
Personally, I don’t care about Cisco making servers. However, this manuever could have a significant impact on the networking market as we know it.
HP has already responded to Cisco’s announcement by increasing its investment in networking equipment. I don’t know what HP has planned, but I bet “hell hath no fury like a vendor scorned!”
But it does makes me wonder what HP has planned for its already affordable ProCurve line.
But what about vendors like Dell and IBM that have only a small presence in the networking field? I wonder if they will be so quick to advertise Cisco routers/switches along with their products?
But I guess only time with tell.
What do you all think? Feel free to post a comment to this blog.
Related read: How open is Cisco Unified Computer System?
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