Cisco’s announcement this week that it plans to unify the modern IT data center kicked off rumors and uncertainty over the relatively stable server market.

That's being fueled by a combination of fundamental changes in the nature of corporate computing, and the global recession will not be extinguished anytime soon, an expert said.

One market researcher sees the sudden wave of activity as the beginning of a massive round of consolidation in the data center and  server markets.

Cisco on Monday fired the first shot when it unveiled its Unified Computing System server line, which integrates the three major elements of the data center – servers, networking, and storage. (Cisco Invades Server Market)

Two days later a report surfaced that IBM was in talks to acquire its server rival Sun Microsystems. But whether the acquisition occurs or not, the move toward server consolidation will continue. (IBM to Acquire Sun for $6.5B)

“Saugatuck sees the recent rumors and activity as a signpost of massive change occurring in IT hardware market direction,” Bruce Guptill wrote in a Saugatuck Technology report published on Friday.

The changes began long before Cisco’s announcement. The emergence of cloud computing, which converts the data center into a utility much like the power grid, is perhaps the major agent of change.

And the recession combined with a general lack of credit are forcing corporations to cut their IT budgets, according to the report.

“Users are looking more and more to cloud as an alternative to traditional servers, storage and other hardware,” the report said. “There is simply not as much budget available for the integration and management of core disparate aspects of IT.”

So Cisco’s announcement touched  a nerve in the IT market and resonated among corporate users facing tighter budgets.

Cisco promotes the idea of an IT utility where the brand name on the various piece parts is less important that the overall role of the data center, said Charles King, principal analyst with Pund-IT Research.

“In a cloud environment what is the benefit of having IBM, or H-P, or even Cisco severs? It means far less in the cloud that it did in the traditional data center,” Mr. King said.

The de-emphasis on the components of the data center is fueling a wave of consolidation in the server market, the Saugatuck report said, and the IBM/Sun acquisition story will be the first of many.