Cisco Expands in the DataCenter and Consumer Electronics (Jaideep Venkatesan)

Cisco was in the news last week for two ambitious but seemingly disconnected expansions from its core of dominating electronic equipment.

Cisco first announced its entry into server market, offering its first blade servers for Datacenters, many of whom already use Cisco's networking equipment. The server will be part of Cisco's Unified Computing System, which would include a Cisco Switch and third party software, and is offered to reduce DataCenter costs. It is widely seen as a threat to IBM and HP, who have traditionally partnered with Cisco in offering complementary products to its networking equipment, including servers. It has also provoked a Youtube video response from Mike Klayko, CEO of Brocade Communications Systems, another Blade server provider threatened by Cisco's new foray. Klayko argues that customers will not want to buy into Cisco's propietary system, as that risks higher costs and lock-in.

Cisco also announced its acquisition of Pure Digital , maker of Flip digital camcorders, signaling a foray into consumer electronics and inspiring immediate speculation that it would challenge other consumer electronics firms or companies such as Apple with a presence in several markets.

Curiously, no one has really linked the two developments or explained how they fit into Cisco's overall strategy.