Agree with Dave although unsure what you really mean by Econimics?
Suppose mimiced economics?
Cisco although entering a mature hardware commodity server market where price/performance ersosion is the norm and with fierce competition especially in the X86 standard server space, appear to be taking a slightly different approach . . .
The initial hardware pricing doesn't seem great value, they are concentrating on the integration savings and power savings rather than promoting cheap servers like the other players, and they may have some possible success here.
The pricing may limit the overall market appeal but they seem bound to get a degree of low hanging fruit from their integrated value proposition, and their approach appears to have reduced complexity savings and maybe performance gains by coupling the server blades and switches ever more closely, tightly and simply.
The look set for some rich pickings along the way.
The simple integrated approach could speed market take-up and yield faster implementation and installation times as more of the configuration and set up is preconfigured in the box and rack and it may prove to be a great way to rapidly generate private and public cloud configurations and make it far easier to design and deploy so called transclouds.
Because of the integrated and standardised approach it could be very readily scaled out to adapt to changing business needs.
A standardised and integrated network, compute, store building block could be safer and simpler and very much faster and secure.
It could make it very much easier to deploy the VM parts.
It would be interesting to know more about the performance per volume space, given that they appear to have a good handle on reducing power consumption.
Over a three year cycle energy cost is still a massively high component so there is a long way to go in the industry to improve this.
It would be good to know more about reliability/availability and this will only really come from monitoring large scale field deployments over time.
Dave is right, by muscling in on the server turf they draw the spotlight onto their existing cozy margins and the exisiting server centric vendors will accelerate a competitive response in return.
This is good news for us customers though!
Cisco may have success with modular flexible storage in this approach as well and it may well be that they are approaching things from a useful switch centric direction.
In architecting datacenters and reliable IT infrastuctures, although application deployment and software platform are key and are so often seen as start points, looking at communications bandwidth and the switch first and then mapping out is an interesting approach as maybe is better balance between comms compute and store with this approach.
The networking and management software wrap including VM is a great source of value here and you can imagine that this integrated approach could help with faster and thinner deployment and very much better system resource allocation.
There are possible security improvement considersations also with integrated server storage switches.
Its going to be highly intesting to see what happens with early deployments following general availability in the June/July 2009 time frame.
IT supplliers all seem focussed on getting to the same end point so there is going to be much fun and perhaps more vendor consolidations ahead.
The integrated California approach could help Cisco become harder, better, faster, stronger triggering competitor improvement.