Cisco Edges Toward Its First Virtualization ServerCisco Edges Toward Its First Virtualization Server

Cisco is moving closer to releasing its first data-center server that would integrate networking capabilities into a single system and go head-to-head against a similar plan from Hewlett-Packard.

The networking equipment maker could release its new system as early as March, news reports said Tuesday. In December, information reported that Cisco's upcoming product, code-named California, would be a blade server chassis that melds the company's Nexus 5000 switch that converges storage and data network traffic, blade servers that employ Intel Core i7 processors, and virtualization management with help from VMware.

Goldman Sachs and Credit Suisse are believed to be currently testing the Cisco system.

HP, meanwhile, is preparing a server-switch of its own that combines a ProLiant server and ProCurve switch, according to information. The computer maker is expected to release a product early this year.

Cisco and HP are likely to be joined in the future by IBM and other vendors that see an opportunity in easing the pain IT departments suffer today in buying servers, switches, and virtualization tools separately, and configuring them to work together.

By attacking the problem, Cisco is hoping to jump-start growth in the mature networking market by eventually providing corporations with the ability to manage network routers, switches, and data center servers from one console, said James Staten, an analyst for Forrester Research.

"It has an opportunity for high growth, if they can provide a new value proposition," Staten said of Cisco.