Cisco, IBM expand alliance into data center gear

CHICAGO: IBM and Cisco Systems have announced an agreement in which IBM will ship certain computer servers with an embedded Cisco switch module.

The deal further strengthens the increasing ties between the two large technology companies, who have agreed to make their technology work more closely together. Pacts in the past year have focused on security and data storage and the alliance between them dates to 1999. Financial terms were not disclosed.

IBM and Cisco said the move would make it easier to manage the servers, which are known for their ability to be easily expanded or repaired because they are made up of individual computing modules. A switch directs data traffic on a network.

The accord is meant to boost sales of IBM's software and systems, and Cisco's networking gear in their customers' data centers, the companies said. The integrated gear, some of which will be available from May, will let companies run their data centers at lower cost and more efficiently, the companies said.

The market for data center networking gear is expected to hit $7 billion by 2007 from an estimated $4 billion this year, Cisco said, citing data from research firm IDC.

IBM, based in Armonk, New York, is the world's largest computer company and sells everything from computers to computer software to microchips and computer services.

Cisco, the world's largest maker of equipment that directs Internet traffic, has been pushing alliances as a way to boost sales by leveraging its relationships with large, well-known companies.

On Wednesday, San Jose, California-based Cisco and Sweden's Ericsson announced plans to jointly sell wireline gear to global telephone companies in a move to speed the shift to Internet-based networks.

©Reuters