Sharp turns like Cisco’s have a long history

CiscoIf Cisco announces its first blade servers on Monday, as expected, the news may well herald a major expansion of the dominant networking company’s business. But even though it’s the most hotly anticipated move in a long time for an IT vendor, this isn’t the first case of a company taking a big gamble on entering into a new business.

Potentially game-changing shifts have taken many forms, and none is directly comparable to Cisco’s plan or its historical context. But there are some lessons for Cisco in how those strategies have played out, according to industry analysts.

It may be hard to remember, but Intel didn’t make any chips for servers until the Pentium Pro was unveiled in 1995. The company had remained focused on PCs while giants such as IBM and Sun Microsystems built both the central computers that ran enterprise applications and the processors at the heart of those systems. PCs were used for some departmental functions such as printing, but they weren’t true servers. Leveraging its PC chip development resources and large-scale PC economics for server CPUs turned out to be a very good move for Intel and IT as a whole, spawning the industry-standard servers that dominate data centers today.

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