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No longer content with just providing the networking pipes, Cisco’s intent to manufacture servers could disrupt the $50 billion server market dominated by Dell, HP and IBM.

Cisco Systems is planning a big move into the server space, threatening to chip away at the market-leading status enjoyed by Hewlett-Packard, Dell and IBM in the $50 billion server market, The New York Times reports.

Cisco’s first server, expected in the next few months, will cater only to virtualized applications, and will feature sophisticated software from VMware, of which Cisco owns a 2 percent stake, according to analysts.

For years, Cisco has dominated the networking market, making nearly $40 billion a year in revenue mostly from such products as routers and switches.

I remain genuinely excited on several levels about this news. It would be great to see Cisco enter the market for a number of reasons. That we might get more competition a bit more innovation in the market has to be a good thing for the end user and the vendors, at the same time, it will be interesting to see what they’re take on virtualization is, what innovations/features that they can bring to the table. By that I mean you ask a networks guy about virtualization and you’ll typically get a different conversation to a server or middleware guy. Could we see, Cisco launch a virtualization device in a box? Where I plug it in, allocate it some storage and just virtualize my machines on to it? What system management features could it include?

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