Cisco Plans Virtualization Servers: Report

Cisco plans to release a server computer equipped virtualization software, a product that could put it in competition with some partners, a report says.
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Networking-equipment maker

Cisco Systems

(CSCO) - Get Report

plans to release over the next few months a server computer equipped with sophisticated virtualization software, a product that could put it in competition with traditional partners like

Hewlett-Packard

(HPQ) - Get Report

and

IBM

(SYMBOL)

, a published report says.

Cisco could show off the first of its new systems as early as March, the

New York Times

reports. The company wouldn't disclose the exact nature of the product, although people with knowledge of Cisco's plans said it would sell a server bundled with networking hardware and virtualization software from both Cisco and

VMware

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. Cisco owns close to 2% of VMware.

Cisco's move reflects its ambition to expand beyond its roots and offer offer everything from instant messaging software to digital stereos, the newspaper reports. But the move is risky because it could produce far lower profits than Cisco makes from network gear, a market that it dominates.

Virtualization software enables users to run multiple operating systems simultaneously on a single computer, allowing users to save money in addition to other benefits.

This article was written by a staff member of TheStreet.com.