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Cisco isn’t putting the fear of God into Hewlett-Packard over its new entry into the blade server market. But even so, Cisco is seeing a nice run-up in its stock over the last three weeks - from under $13 per share to $17.50 per share – so Cisco shareholders don’t seem to care what Hewlett-Packard thinks.

But the quote from H-P’s chief executive officer bears mentioning, if only because it portends a Yankee’s-Red Sox rivalry in the multi-billion dollar blade server market. “Are we scared? No," Jim Ganthier, vice-president of H-P's blade business, told TheStreet.com. "They are coming to the party a little bit late."

H-P may be whistling past the graveyard here, even though it owns over 50% of the server market. But H-P has a history with Cisco – the two were tight business partners (still are, as a matter of fact) but that relationship may be impaired over Cisco’s
Brand new Unified Computing System (UCS) - the clinical name for its new blade sever program.

H-P certainly doesn’t seem to be rolling out the welcome mat. "Cisco's announcement last week was an interesting announcement, but, quite frankly, it's things that we have been shipping since last fall," says Ganthier, referring to his firm's BL495c blade. According to Cisco’s web site, the blade, which fits into the front of H-P's C-Class blade chassis, also features a technology called Virtual Connect Flex10 for managing virtual servers, he added.

So what, says Ganthier. "Who would you rather have build your home," asked Ganthier. "An architect or a plumber?"

Interesting quote, but I wouldn't recommend picking a fight with a plumber.

Cisco has also made an interesting play in the mass-market video software arena. That after its announcement that it will acquire privately held Pure Digital Technologies Inc. San Francisco-based Pure Digital, maker of the top-selling Flip Video video software device.

Pure Digital's Flip Video has sold more than two million units and, as the company's web site attests, "quickly demonstrated market appeal in the United States by making video simple, accessible and fun." All Flip Video products come equipped with FlipShare, a best-in-class software that allows users to easily organize and edit videos and then share them instantly on YouTube, MySpace and other popular sharing Web sites.

"Flip Video puts the power to instantly capture, edit and share video into the hands of everyday consumers," explains Jonathan Kaplan, chairman and CEO of Pure Digital. For its part, the Pure Digital acquisition exemplifies Cisco's "build, buy and partner" innovation strategy to move quickly into new markets and capture key market transitions. Under the terms of the agreement, Cisco will pay approximately $590 million in stock in exchange for all shares of Pure Digital. In addition, Cisco will provide up to $15 million in retention-based equity incentives for continuing employees.

Cisco is getting aggressive just when a company should be aggressive – when the market is soft, the competition burrowed in, and when long-term market opportunities best take seed. After a rough year in 2008, Cisco is off to a good start in 2009

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