Cisco Planning to Sell Servers With Virtualization Software

Cisco plans to start selling servers equipped with virtualization software as early as March, The New York Times reported on Monday, a move that could position it for tough competition with Hewlett-Packard Co and IBM.

The report, citing people with knowledge of the company's plans, said Cisco aims to sell a server combining hardware and virtualization software from Cisco and VMWare Inc, in which Cisco holds a small stake.

Cisco's move into the server services market has long been a target of speculation, with technology websites over the past few months calling it by the code name "California."

Company officials were not immediately available for comment.

Analysts have said a new server product is likely to be aimed at data centers, which Cisco has identified as a key growth area as an explosion of consumer-generated content and a shift to Web-based software in business operations has meant increasing data traffic.

But analysts have also said it could be a difficult move, noting that it would turn IBM and HP, with whom Cisco partners in selling its other network equipment, into rivals.

Cisco, the world's biggest network equipment maker, has been expanding into a wider range of products and services, as growth slows in its traditional routers and switches business.

Its expansion into unified communications systems, which tie together e-mail, phones and other tools over Internet networks, has already led to greater competition with another partner, Microsoft Corp.

From: http://www.reuters.com/article/technologyNews/idUSTRE50J0A020090120

Cisco slices up small business

Cisco Systems' two chief SMB executives Andrew Sage and Rick Moran both admitted that the company's share in the SMB is not large.

Both men who hail from Canada, an SMB country, are trying to change that in a big way.

Currently Cisco globally has just under $8 billion in revenue from the SMB.

The San Jose,-based company announced at its Channel Exchange event, held here, that it will make a $100 million channel investment to try and grow this market. With that investment, Cisco created the Small Business Technology Group to develop new products for this market in connectivity, security, remote access, productivity, customer interaction and customer support.

Moran, who is the vice president, small business solutions marketing for Cisco, described the market as an “unusual one to get to know”. For example Moran said that SMBs are a faster group to return from a down economy. “Customers here are like Sybil. They say they need help when they just hired five new people or when their phone system blew up and then that same customer could look upon new ways to expand their business. We have to address both sides of the need,” Moran said.

To that end, Cisco has segmented the SMB customer into three areas: Basic, Open to Guidance and Elite. Elites understand technology and they want to adopt it and they have IT staff. Moran said that Cisco does very well in this area and some of these customers become good leads for Cisco Certified Partners.

The buying patterns for all three segments are also hard to pin down. Cisco believes that the Basic customers buy from retail, while the Open to Guidance group may use retail, VARs, direct market resellers such as CDW or Insight or go to full service solution providers.

“The SMB has different needs than the other channels. There is no easy way to match customer type to a channel partner. Customers buy from who they want to buy from,” Sage said.

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