New Details on Cisco's Secret Blade Servers - Page 2

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These blades are designed to let dozens or even hundreds of virtual machines run on one blade. Analysts contacted by InternetNews.com said that should provide the needed density for increasingly cramped datacenters.

"This is, I think, the only way we'll be able to provide the business services and apps that we all need and are growing faster than anticipated," said Bob Merritt, principal analyst with Convergent Semiconductors. "There's no reason in the world Cisco can't be a formal competitor in that area."

Merritt cited a white paper from HP that said one-third of CIOs surveyed think that in the next three to five years, their datacenters will be unable to meet the rapid growth in demand for business services.

"That's what's driving the demand for virtualization and servers in general, the demand for business services is expanding at a phenomenal rate," said Merritt. "They are going to be a very strong competitor. It's not a business they've been in before. Not that they didn't have a base in blades, it's just that their focus was elsewhere."

Added Charles King, principal analyst for Pund-IT:

"The play that they are doing here is obviously they have the networking technology and expertise to really dress these [blades] up, and they can put any kind of back end on it they want to and deliver some pretty heavy duty performance," he said.

King thinks that Cisco's real value proposition is that the network, not the blades, is where the value is, and Cisco knows networking.

"System performance depends on how robust the networking technology is. So to my mind, it makes a really intriguing value play for Cisco to say the network and robustness of the network is just as important as the robustness of the server hardware," he said.