They were right to do so, according to most analysts, but not because Cisco's server architecture—which began life as an a motherboard add-in to a dedicated router—could be a credible competitor to IBM, Hewlett-Packard or other server giants.

Cisco announced a server based on what it calls a Unified Computing System—a rack-mounted system that includes units that can support up to eight blade servers based on Intel's next-generation Nehalen processors, a set of low-latency 10Gbit/sec Ethernet and FCoE switches and dedicated interface units called Fabric Extenders that provide up to four 10Gbit/Sec links between blade modules and the network backplane.

In a typical setup, the blades would act as host for virtual machines running on either VMware's ESX or Microsoft Corp.'s Hyper-V, both of which partnered with Cisco for the integration. To connect VMs to the network, they would also run Cisco's software-only Nexus virtual-switch software to provide high-speed dedicated access to both data and storage networks.

Each blade-server chassis comes with two 10 Gbit/sec connections and support for Ethernet, Fibre Channel, Fibre Channel over Ethernet and iSCSI, so they can connect to storage and data networks running a variety of protocols.

The setup is powerful, but there are too many companies selling blade-server products at too high a level of quality for Cisco to compete just as a server vendor, analysts said.

The disruptive element in the mix, however, may not be just a new brand on the blade, or even how closely the blade server is connected to both data and storage networks, according to Rich Ptak, president of Ptak, Noel & Associates. It may be the addition of BMC Software's BladeLogic server-management software and its sophisticated ability to provision, manage and monitor all the resources a virtual machine uses.

"Until now you've had storage, networks and compute power, three separate elements, each of which you had to manage separately, even if you'd virtualized them," Ptak said. "This takes that away and combines them; it reduces cost, introduces more accessibility, automatic redundancy and much more transparent management because the BMC stuff knows how to manage all those things together. Without that you don't have the full flexibility of virtualization; it left too much management burden on IT."

At least as important as the management capability is where Cisco got it, according to Jim Frey, research director at Enterprise Management Associates.