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Cisco, IBM Bless Blades

Cisco Systems Inc. (Nasdaq: CSCO) and IBM Corp. (NYSE: IBM) will be joining forces to offer blade servers and on-demand computing, according to sources close to both companies.

Precise details aren't yet available, but Cisco is expected to announce hardware for IBM blade servers tomorrow. Sources say the two companies are also forging closer technology links with some of IBM's major initiatives, such as on-demand computing, fast become a central plank of its overall strategy.

The move would certainly be a shrewd one on Ciscos part. IBM holds the lion’s share in the growing blade server market, and the hardware firm is winning some high-profile on-demand computing deals (see IBM Wins $575M Morgan Stanley Deal).

Cisco, however, is not the first of the network vendors to strike a blade alliance with IBM. Last year Nortel Networks Ltd. (NYSE/Toronto: NT) announced that it is building LAN switches for IBM’s eServer BladeCenter (see Nortel Adds GigE to IBM BladeCenter).

But there is a long-standing strategic alliance between IBM and Cisco. Earlier this week, for example, Cisco became the latest of several big SAN vendors to tap IBM’s Ficon mainframe-to-storage transport protocol (see Cisco Joins Ficon Fiesta ).

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