It was inevitable, margins are shrinking in the router and switch business and they are still quite comfortable in servers and storage. Cisco will be entering the server business and I think they will quickly get into the enterprise storage business also. Silicon Valley Capitalism is entering another phase of creative destruction.
…. companies like Cisco see an opportunity to produce a new, potentially disruptive class of hardware and software management systems that span an entire data center. With customers looking to manage their data centers as a single entity rather than separate units, the world’s largest technology companies must now fight to secure the most prominent, central position possible.
Cisco’s newfound aspirations stretch well beyond the $50 billion server market to include management software and possibly even storage.
“Our vision is, how do we virtualize the entire data center?” Ms. Warrior said. “It is not about a single product. We will have a series of products that enable us to make that transition.”
We are living in interesting times.