Cisco, with its 2-year-old UCS product, is now the world's third-largest blade vendor, passing Dell and trailing HP and IBM, according to IDC's quarterly numbers.
Hewlett-Packard, IBM and Dell were
among the familiar names at the top of IDC's list of the top server vendors for
the first quarter. Even Oracle, a year after buying Sun Microsystems, has
become a known entity in the server space.
However, new to the rankings is Cisco
Systems, the networking giant that two years ago unveiled the first versions of
its converged data center offerings, the UCS, or Unified Computing System. The
solution offers a tightly integrated package of compute, storage, networking,
virtualization and systems management software.
Now the company is finding its way onto
IDC's quarterly server report, with the first quarter being the first time the
market research firm tracked Cisco's numbers. According to IDC, Cisco captured
1.6 percent of the overall server market based on revenue, finishing seventh,
nestled between NEC and Hitachi, according to Jed Scaramella, research manager
for enterprise servers at IDC.
More impressively was Cisco gaining the
No. 3 spot in the highly competitive and fast-growing x86 blade space, with 9.4
percent of the market. Cisco placed behind HP and IBM, and ahead by one
percentage point of Dell.
According to Scaramella, Cisco
executives have been able to take advantage of the evolution of the data center
toward a convergence of the infrastructure, including the servers, networking
and storage, and fueled in large part by the growing adoption of
"A couple of years ago, Cisco kind of
saw [the trend toward converged resources] and saw the markets coming together
... and they wanted to get ahead of it," Scaramella said in an interview with
eWEEK. "What you're seeing now is that it is starting to pay off."
Cisco partnered with such vendors as
EMC for storage and VMware for virtualization, and rolled out the UCS, which
immediately expanded Cisco's role in the data center and put a tremendous
strain on partnerships with the likes of HP. It also helped fuel similar
efforts by other vendors, including HP.
Cisco's data center business continues
to grow. During a conference call with analysts and journalists to announce the
company's quarterly earnings May 11, Chairman and CEO John Chambers lauded the
data center business, noting that the company now has 5,400 UCS customers and
an annual run rate of $900 million for UCS product orders. In addition,
according to Cisco, businesses worldwide shifted 10 percent of their x86 blade
spending to the UCS; that number was 20 percent in the United States.
"Cisco's rapid growth [in the x86 blade
market] underscores our leadership in the industry transition to fabric
computing and converged infrastructure," Soni Jiandani, vice president for
Cisco's UCS business, said in a May 24 blog post on the company's Website. "We aimed to
create the ideal, programmable, platform for virtualized and cloud
environments, and to help solve many of the very real challenges they faced.
Today's market share news demonstrates our approach is taking hold."
The IDC numbers were much-needed good
news for Cisco, which has been hampered in recent quarters by a string of
disappointing financial numbers and weakness in some key businesses, including
its core switching and public government units. Chambers has begun an aggressive program to save $1 billion in
operating expenses and streamline the business, shuttering some underperforming
operations, reorganizing management and announcing layoffs that analysts say
could number in the thousands.
The data center business has been a
bright spot, Cisco officials have said. The numbers are beginning to show that
"They've made a lot of progress in the
last two years," Jean Bozman, research vice president for enterprise servers at
IDC, said in an interview with eWEEK.
IDC's Scaramella said Cisco officials
have done a good job at staying focused on what part of the market they're
targeting-highly virtualized data centers and cloud computing environments.
"They're aiming at that," he said.
"They're not trying to be everything to everybody."
However, there's still work to be done,
according to Scaramella. It's good that Cisco been able to become the world's
seventh-largest server vendor, but he noted that the top three-HP, IBM and
Dell-account for about 70 percent of the space. The first 1 to 2 percent of the
space can be relatively easy to get, Scaramella said. Growing beyond that will
be a challenge.
In addition, he said Cisco needs to
build out its global strategy. Currently about 60 to 70 percent of Cisco's UCS
business is in the United States, and another 15 to 20 percent in EMEA, mostly