The Tale of Two Cisco UCS Predictions
May 25th, 2011
If Charles Dickens were to write a book about it, it would begin like this: “It was the best of predictions, it was the worst of predictions, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief from a new comer, it was the epoch of incredulity from an incumbent…”
Of course, I’m referring to the UCS market share predictions from Cisco’s CEO, John Chambers compared to the UCS statements made by HP’s senior management. Let’s summarize each side’s statements before we dive into the hard facts.
Prediction #1: John Chambers, Cisco’s CEO, on September 14th, 2010 said: (1)
“UCS has already taken the #3 market share spot in US/Canada for x86 blade servers.”
“Cisco expects UCS to be 50% the market share of the #2 competitor for the worldwide x86 blade server market within the next 2 quarters.”
Prediction #2: Randy Seidl, HP Senior VP, on April 26th, 2010 said: (2)
“A year from now the difference is (Cisco) UCS (Unified Compute System) is dead… ”
Extra Credit: Leo Apotheker, HP’s CEO, on March 16th, 2011 said: (3)
Gallant: “Speaking of Cisco in the server market, is it a threat or an annoyance to HP?”
Gallant: “Can you expand?”
Apotheker: “We hardly ever see [Cisco UCS].”
Gallant: ”They claim that sales are growing pretty rapidly of the UCS system, but you’re not seeing them in competitive situations?”
Apotheker: “They must be selling on planet Zircon.”
Yesterday, May 24th, 2011, IDC announced the results of the Q1 2011 Worldwide Quarterly Server Tracker. (4) The results clearly proved the credibility of Mr. Chambers while doing exactly the opposite for HP’s Siedl and Apotheker. Here is a graphical breakdown of the results:
The chart above (5) shows x86 Blade Server Market share for both Worldwide and US sales. These results validate both of John Chambers’ statement that “Cisco has taken the #3 market share spot in the US/Canada for x86 blade servers“ and that “Cisco expects UCS to be 50% the market share of the #2 competitor for the worldwide x86 blade server market“.
The most interesting, and relevant, market share numbers for me are the US numbers. Reason being, this is the market that my team works in on a daily basis. You could say that we just received our report card and it’s not too shabby… after only two years, my team is responsible for close to $1 out of every $5 worth of x86 blade server factory revenue in the United States. Lastly, we were able to outpace IBM, who has been reporting x86 blade revenue since 2002, and Cisco UCS is now the #2 vendor for x86 blade server factory revenue in the US.
Given the predictions above from John Chambers vs. HP’s senior management and the IDC’s market share announcements, I have the following comments/questions:
- Our fearless leader, John Chambers, was spot on with his prediction. If he ever predicts the rapture, I’ll probably pay attention.
- HP’s Siedl said UCS would be dead by April 26th, 2011. Instead, less than one month later, IDC reports that Cisco UCS leapt to either the #2 or #3 position in x86 blade revenue in multiple markets. That’s impressive results for a “dead” product.
- HP’s Apotheker said “We hardly ever see UCS”. How exactly do you NOT see the #2 blade server vendor in the US? Is it a case of head-in-sand syndrome, fingers-in-ears disease, or is he just saying what he wishes was true while clicking his ruby slippers together three times? Who knows…
In summary, I leave you with the chart below (6)… the trending lines for worldwide x86 blade market share. Cisco is clearly gaining at the expense of HP and IBM. The UCS Naysayers’ favorite twitter hash tags for the past several months has been #NumbersDontLie, #HardFactsDontLie, and #RealIndustryLeaders. For some reason, they’re strangely quiet these days… <tongue in cheek>
M. Sean McGee, UCS Cheer Squad
P.S. As always, these thoughts are solely my own.