Updated from 2:25 p.m. EDTCisco Systems' ( CSCO) long-anticipated entry into the server market is imminent, potentially ramping up the competition between the networking giant and its long-term partner Hewlett-Packard ( HPQ). Cisco CEO John Chambers and other members of the company's management team will be hosting a "Unified Computing" event at the firm's New York offices Monday, which is expected to signal a new Cisco strategy. Traditionally, Cisco has focused its energies on networking technology such as switches and routers, although the firm is now seeking out new revenue streams. Partner H-P, on the other hand, has started to extend its own reach beyond PCs and servers into the networking arena with its ProCurve line. "Cisco's move into servers can only succeed at the expense of H-P, Dell, IBM and
Cisco's server strategy is also expected to boost the firm's virtualization story, and the company is rumored to have clinched a partnership deal with VMware ( VMW). Virtualization, which has been one of the hottest technologies of recent years, allows computers to run separate yet simultaneous programs to squeeze more performance out of fewer machines. Although Cisco has kept details of its launch under wraps, a partnership with VMware could mean that the virtualization giant's parent company EMC ( EMC) is involved. Software company BMC ( EMC) has already scheduled media briefings for after Cisco's launch Monday, suggesting that it also could be part of the mix. Like many tech firms, Cisco has been feeling the effects of the global economic slowdown, and Chambers has said that he will use the firm's strong cash position to compete in new areas. The networking specialist, which exited the second quarter with almost $30 billion in cash and investments, has little choice but to cast its net wider, according to Pund-IT's Charles King. "Self-preservation is the first rule of the IT jungle," he wrote, alluding to Cisco's changing relationship with H-P. In addition to the spending slowdown, Cisco is also facing more competition in the networking space from companies like Juniper ( JNPR) and Brocade ( BRCD), which recently completed its $2.6 billion acquisition of switch specialist Foundry Networks. Cisco shares were down 0.4% to $15.45 in recent trading.