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H-P: We're Not Scared of Cisco's Blade

Stocks in this article: CSCOHPQ

Tech giant Hewlett-Packard (HPQ) is not exactly quaking in its boots after Cisco Systems' (CSCO)' controversial entry into the blade server market.

"Are we scared? No," Jim Ganthier, vice-president of H-P's blade business, told TheStreet.com. "They are coming to the party a little bit late."

After months of rumor and speculation, Cisco finally launched its Unified Computing System (UCS) last week, touting the blade-based system as a foundation for users' virtualization efforts. The new offering puts Cisco on a collision course with its long-term partner H-P.

The Palo Alto, Calif.-based firm owns more than half of the blade server market, way ahead of second-placed IBM (IBM). After fighting for years to win the lion's share of the blade market, the tech firm has no intention of giving up its lead to Cisco.

"Cisco's announcement last week was an interesting announcement, but, quite frankly, it's things that we have been shipping since last fall," says Ganthier, referring to his firm's BL495c blade. The blade, which fits into the front of H-P's C-Class blade chassis, also features a technology called Virtual Connect Flex10 for managing virtual servers, he added.

Both Cisco and H-P are touting hardware and software that they call purpose-built for virtualization, although the latter is keen to play up its long history in the server market.

"Who would you rather have build your home?" asked Ganthier. "An architect or a plumber?"

Undeterred, investors responded positively to Cisco's launch, and the firm's stock has risen from $15.45 to around $17 in the last 10 days, although this coincided with a broader rally in tech stocks.

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