It’s rapidly becoming clear that the rumors concerning Cisco entering into the server market are probably true. Major news sources, ranging from The Register to The Wall Street Journal, have written the story, and Cisco’s ‘no comment’ is, at this point, the same thing as saying, “Yeah, we’re doing it, but don’t have the data sheets printed yet.” While the company may be positioning their servers as network-centric devices (and thus not directly competitive with their server vendor partners), I’m hearing that they will look more like enterprise servers with integrated switches. I’m not sure that we’re talking a blade form factor; I’m thinking that it’s more likely to be a rack mount server. Why spend all the money/time/engineering to bring out a new chassis when you can introduce a box that fits into a standard rack?

From a strategic perspective, this makes a lot of sense for Cisco. Their sales force is already a data center fixture, and they have a well-developed channel presence; both parties can easily add servers to their product pitches and not miss a beat. Cisco also has a robust service and support infrastructure already in place. However, going up directly against the major server vendors will certainly carry consequences. Cisco doesn’t have the stranglehold on the server business they once had; back in the day, everyone led with Cisco gear with all of their boxes. Now, all of the major and minor vendors have sales partnerships in place with several network equipment manufacturers and also offer their own private label products. However, Cisco still has a place in their price books and still harvests quite a bit of business through partnerships with IBM, HP, Sun, and Dell. How much will this change when Cisco does a cannonball into the server pool? I would expect that Cisco plans to shake things up by offering very attractive price/performance. If this is actually the case, how will the ‘bigs’ respond? By matching prices? Yeah, probably, at least on a case-by-case basis. By sending some pain Cisco’s way via massive price drops on networking gear? Bingo! Good times are on the horizon for customers with money in their pockets and a need for new stuff…