DOW JONES NEWSWIRES 
 

Cisco Systems Inc. (CSCO) outlined a bold plan to establish a bigger presence in the market for computer hardware and the systems used by businesses to run their information-technology networks.

The announcement - which was expected - comes after months of speculation in the technology industry. Cisco already is a dominant player among makers of networking gear used to connect computer systems. But the company is now looking to expand into other areas - such as blade servers - at a time when business customers are demanding simpler, less expensive systems.

Cisco's new initiative promises customers up to a 20% reduction in capital spending and up to a 30% reduction in operating expenses, greater energy efficiency and improved information-technology productivity.

Among the companies joining Cisco's effort include VMware Inc. (VMW), Red Hat Inc. (RHT), EMC Corp. (EMC) and BMC Software Inc. (BMC).

Industry and financial analysts have been speculating for months on what Cisco is up to, including much chatter on a reported plan to sell blade servers - the thin computer boards used to run data centers and sold by vendors such as Dell Inc. (DELL), Hewlett-Packard Co. (HPQ), and International Business Machines Corp. (IBM).

The buzz over Cisco has grown louder for a number of reasons. The corporate tech market is consolidating, and with its huge cash pile of roughly $30 billion and quest for growth beyond its core networking business, Cisco is well positioned to shift the market based on its own needs.

Cisco shares were recently up 3 cents at $15.54. The stock is down just 4.7% so far this year.

-By Mike Barris, Dow Jones Newswires; 201-938-5658; mike.barris@dowjones.com