Undeterred, Cisco is still eyeing H-P's turf. "As we said on our UCS launch, this is a natural extension for Cisco," explained Durzan. "Data centers are virtualizing, and as you virtualize, you need a more agile environment -- compute and network resources have to sit more closely together."

Despite making a song and dance about its entry into the server market, however, Cisco has not yet said how many UCS devices have been sold.

"At this point, we're not releasing numbers but the reception and the interest in the technology have been amazing." Durzan told TheStreet. "We're doing very well, in my mind."

The networking giant, which took a profit hit in its recent fourth-quarter results is looking to open up new revenue streams through its UCS. With the networking market already saturated with its products, Cisco has taken a calculated risk by challenging H-P.

During the company's recent fourth-quarter conference call Cisco CEO John Chambers predicted "volume" deployments of the technology in Fortune 50 companies during the second half of this year.

Cisco shares rose 31 cents, or 1.3%, to close at $23.98 Thursday, as the Nasdaq gained 0.3%.

-- Reported by James Rogers in New York

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