Cisco has announced an ambitious plan to enter the server market with what it is calling a Unified Computing System (UCS), a new data centre architecture that unites compute, network, storage access and virtualisation resources in a single system.

The company will be joining forces with industry-leading vendors such as Microsoft, Intel, VMware, EMC, Red Hat, NetApp and more to enable it to bring its new system to market, with what it is calling an open partner ecosystem.

Introducing the new platform during a TelePresence conference linking journalists, analysts and senior figures from Cisco and its new partners in 11 cities around the world, Cisco CEO John Chambers said that the platform is a natural progression of the company’s data centre 3.0 strategy.

“We’re really talking about the future of the data centre,” he said. “How it is going to evolve into cloud, virtualisation and how it will change business models forever. Don’t think of this as a product announcement. Think of it as a data centre architecture announcement.”

The announcement builds on the long-awaited Project California – which was rumoured to be Cisco’s move into the blade server market. The company has announced the new UCS B-Series blades, based on Intel’s upcoming Nehalem processors. Cisco says this will enable significantly more virtual machines per server.

Operating over a low-latency, lossless, 10 Gigabit-per-second Ethernet foundation, the UCS consolidates LANs, storage area networks (SANs) and high-performance computing networks. This reduces the number of network adapters, switches and cables as well as reducing power and cooling requirements, the company said.

Cisco says that UCS also provides consolidated access to SANs and network attached storage (NAS) via Ethernet, Fibre Channel, FCoE or iSCSI.

As well as the hardware elements, Cisco has also released UCS Manager, which enables the entire platform to be managed as a single entity. IT managers of storage, networking, compute and applications can now collaborate on defining service profiles for applications. This should considerably speed up application provisioning, Cisco said.

Chambers said that the technology should result in lower total cost of ownership. “Customers are saying ‘we want to do more with less’ and we believe that this approach will have lower CAPEX, 20% would be a conservative number. We have seen examples well over that – almost double. It will reduce operating expense by as much as 30%,” he said.

It is clear to see why Cisco has taken the decision to leave its comfort zone of network equipment. “We address less than high single digits of data spend today. With this, we’re talking about 25% of data centre spend becoming available to Cisco and our partners,” said Chambers. “We would not enter this if we did not think it was a multi-billion dollar marketplace.”

Some analysts have estimated that virtualisation utilisation stands at just 30%, something this platform aims to address.

“There is no debate anymore about whether virtualisation is a good strategy or not,” VMware CEO Paul Maritz said at the launch. “Some people would say that 30% is a generous estimate about the amount of loads that have been virtualised to date. There is tremendous need and opportunity here.”

Gary Moore, Cisco SVP, advanced services, said that UCS can push up utilisation significantly: “With the ability to dynamically allocate assets, we’re going to take utilisation upwards of 70%.”

The move sees Cisco muscle in on space dominated by companies it currently partners with. HP and IBM, for example, dominate the blade server space, which Cisco has entered with its B-Series blades. Chris Dedicoat, Cisco’s European markets president, claimed that the move will not damage relationships.

“Our relations with IBM and HP are very multi-dimensional and we expect them to continue into the future, particularly with IBM as their services arm is a large partner of ours,” he said. “Clearly with this announcement we are competing in certain aspects of the marketplace. But when you have companies of this scale, it’s inevitable that in some parts you will compete. But in many parts of the industry you have to cooperate.”

Cisco said that there are around 10 beta customers for the new UCS and that it will ship during the second quarter of 2009. No details on pricing were revealed.