Technology Rumor of the Day: Cisco

After months of big talk about its plans to explore so-called adjacencies -- markets outside its core focus -- and the saber rattling about virtualization, Cisco ( CSCO) is expected to introduce its first network servers next week.

Industry analysts briefed on the product have been lining up interviews with the media to discuss Cisco's long-anticipated strategic shift into a segment of the IT market dominated by Hewlett-Packard ( HPQ) and IBM ( IBM).

These analysts also expect Cisco to reveal products that put the gearmaker squarely in the virtualization business. Virtualization allows computers to run separate yet simultaneous programs to squeeze more performance out of fewer machines.

Some observers expect Cisco to incorporate server functions into a new crop of switches, effectively creating a switch server hybrid. The move would collapse two hardware devices into one, leveraging Cisco's massive presence in IT networks.

Critics have expressed concerns that Cisco is late to the server game and that the virtualization trend may have fizzled a bit.

There's also the fear that if Cisco crosses over into IBM or H-P's turf, it could spark retaliation. For example, some analysts say H-P has been developing a possible answer to Cisco by beefing up a line of servers to handle routing and switching duties - Cisco's franchise.

Until now, the tech titans have honored a sort of non-aggression pact. Next week could change all that.

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