It was Cisco Systems' virtual foray into the turf of Hewlett-Packard, IBM and Dell, when it officially announced its first server computer at its San Jose, California based headquarter, on Monday. Cisco Systems announced "Unified Computing System" strategy and put an end to all speculations and dead reckonings that were going on over its first blade server.

Cisco claimed that its Unified Computing System strategy will bring out its new networking equipment packaged with its first blade server storage hardware and virtualization software for data centers, facilities used to house computer systems and related components such as telecommunications and storage systems. Cisco announced that the products will be released on the market in the second quarter.

Cisco elaborated that its Unified Computing System aims to bundle computing, storage, virtualization and networking capabilities in an integrated package that will help making data centers more flexible, efficient and cost-effective. According to Cisco, its move - of joining its new servers with networking and storage products - will benefit its customers; it will help them manage their data centers more cheaply and efficiently.

In a videoconference, Cisco CEO John Chambers said, "This gives us a chance to perhaps become the leading company not just in communications but also in IT along with our partners." "We don't announce point products. What we are talking about today is the next market evolution and an architecture that will allow us to go after a new market," Chambers said.

Bob Beauchamp, CEO of BMC Software Inc., Cisco's partner in the UCS venture, said, "The Cisco hardware platform does things not done by others and [BMC] exploits the functionality of their hardware to provide management."

The analysts feel that Cisco's Unified Computing System will expand its area of operation beyond networking to the unfamiliar territory of server manufacturing, which is dominated by partners IBM and HP. Thus, Cisco's move will most directly affect the well known sellers of blade servers, including HP and IBM. It could spark off a series of acquisitions in the tech industry; it could propel IBM and HP to seek alliances or acquisitions to compete with Cisco.

Mark Sue, managing director of technology research at RBC Capital Markets, said, "Cisco is making a deep push into (a market), which has historically been the home turf of entrenched players such as HP and IBM."

Speaking on Cisco's announcement, IBM spokesman Michael Corrado said that "it is not unusual for tech companies to be both partners and competitors". Hewlett-Packard's Jim Ganthier said, "HP is delivering today what Cisco is promising tomorrow."

Meanwhile Cisco's announcement has been getting mixed response. Commenting on Cisco's announcement, the senior director of solutions architecture at Apptis Technology Solutions, a Chantilly, Virginia based solution provider, Lee Koepping said, "How dare Cisco enter a market they never played in before. They set a precedent with telephony. When Cisco entered that market, it was not considered a player. It isn't dominant now, but it's a big, important part of the market. The idea that blade computing has become an extension of the network, that leaps them ahead of the competition. And that's something they've done before. However, the server and data storage administrators are not exposed to networking. So there will be some resistance. There will be client-side politics. But that happens every day in the market. There is precedent for the collapse of customer silos."

Wes Wasson, senior vice president and chief marketing officer at Citrix, said, "Not surprisingly, Cisco's view is all things are found in the network. But this is a proprietary approach, even though Cisco has partners supporting it. Cisco is loading everything including the servers onto the network. It [Cisco] says it will want to integrate compute, storage and networking. We'll have to see how attractive it is to customers. Right now, Cisco has a zero percent market share. But even if it does become successful, customers will go to Cisco and ask for it to be more even."