Cisco to unveil data center strategy next Monday

A sign shows the headquarters of Cisco Systems Inc. in San Jose, California May 6, 2008. Cisco reported stronger-than-expected quarterly profits on Tuesday as rising Internet traffic fueled sales of its network equipment, despite concerns of a slowing U.S. economy.

NEW YORK (Reuters) - Cisco Systems Inc said it will unveil next week a new strategy to help customers build more efficient data centers, amid expectations for the network equipment maker to announce it will start selling servers.

Media reports have said that Cisco plans to sell computer servers equipped with virtualization software by VMWare Inc, a move that could position Cisco into more competition with Hewlett-Packard Co and IBM.

The company would not disclose details of the March 16 announcements on Monday, but a spokeswoman acknowledged that the event would be related to the speculation. Chief Executive John Chambers and other Cisco executives will unveil new technology and partnerships, it said.

Cisco has been expanding into a wider range of products and services as growth slows in its traditional routers and switches business.

Analysts have long speculated a new server product aimed at data centers, which Cisco has identified as a key growth area due to the explosion of consumer-generated content and a shift to Web-based software in business operations.

Cisco's expansion into unified communications systems, which tie together e-mail, phones and other tools over Web networks, has already led to greater competition with another partner Microsoft Corp.

(Reporting by Ritsuko Ando; Editing by Bernard Orr)