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Message: <blockquote data-quote="lkdood" data-source="post: 4189493" data-attributes="member: 92282">Cisco Systems Inc. (CSCO) unveiled its highly anticipated "Unified Computing System," which puts it squarely in competition with other tech titans such as Hewlett-Packard Co. (HPQ) and International Business Machines Corp. (IBM) in the data center market.  The product is a single server that acts like several using a technique called virtualization. The server can be used by companies to store a massive amount of data, and allow multiple devices to access that information.  The company touted the server's ability to lower operating and capital expenses, improving computing efficiency, and cut down on the physical cables and switches needed in an office. It also requires less power because it's a single refrigerator-sized box rather than the bank of servers found in a typical data center.  "This is the most significant, riskiest move Cisco has made in recent memory," said Yankee Group analyst Zeus Kerravala. "This product release moves Cisco into the $40 billion server market. Even a small percentage of this market moves the revenue needle for Cisco, so the upside is obvious."  Cisco has been slowly moving toward the data center space with the acquisition of several niche technology companies.The company's chief executive has also been vocal about moving into "adjacent businesses." The company has been aggressive in looking for new revenue streams, particularly as it sees continued revenue declines for the current quarter. But this particular venture will pit them against companies they once considered allies. H-P and IBM sell blade servers that store data.  "We don't focus on competition, we focus on where the market is going," Cisco Chief Executive John Chambers said during the presentation on Monday.  Cisco isn't going at it alone. Chambers was joined by an executive from Microsoft Corp. (MSFT) and the CEOs of Intel Corp. (INTC), Accenture Ltd. (ACN), BMC Software Inc. (BMC), EMC Corp. (EMC), and VMWare Inc. (VMW), all of whom made short statements in support of the new system. Last year, VMWare said it would work with Cisco to jointly develop data center services for its switches - an early indication Cisco was moving in this direction.  "Both companies share this vision for billions of devices connected seamlessly around the world," Intel CEO Paul Otellini said.  "We're looking at the things that can make a difference," Accenture CEO William Green said. "We're measured by outcomes, not products or services. At the end of the day it's about getting things done."  But entering a market that is already well tread by IBM and H-P isn't without risks. Despite the potential, Kerravala said that IBM and H-P are also two of Cisco's largest channel partners.  "We expect this release to further drive a wedge between the computer vendors IBM and H-P and Cisco," he said. "Cisco will, of course, actively look to move much of the integration and fulfillment business to other vendors."  Cisco is hoping that the advantage of its Unified Communications System will win over corporate customers, as well as service providers. The company said operating and capital expenses could fall by as much as 35% as a result of its more efficient model. It is also more flexible and allows for better security, according to Cisco executives. The company isn't pushing it as a product, but rather a system with several partners with their hands in it.  "Clearly businesses will want to buy that unified management system from one supplier, rather than stitching it together from multiple sources," said Ovum analyst Tim Stammers. "On the other side of the coin, that single supplier will have a controlling role in the data center."  Whether Cisco will end up being that supplier is still up in the air. The data center vendors are already lining up to criticize Cisco's venture.  "Cisco's approach to 'unified computing' is not revolutionary," said Brocade Communications Systems Inc. (BRCD) spokesman John Noh. "Many companies with extensive experience in solving complex data center issues, including Brocade, are already working on solutions."  Cisco's new rivals also criticized the model of having a tightly controlled product versus a more open model. Dell Inc. (DELL) Vice President Rick Becker said the proprietary model doesn't work well in the server business. H-P executives echoed the sentiment.  Another uncertainty is whether companies will want to put up the extensive upfront costs associated with buying new equipment at a time when IT budgets are shrinking.DOW JONES NEWSWIRES </blockquote>

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