Still Confused About Cisco’s Blade Market Share

I recently received a comment  on my previous post concerning Cisco’s market share (“What’s the Truth About Cisco’s Market Share“) which has me more confused.  The comment admits that Cisco has not released any market share data to IDC, but that when you look at the Cisco Q1 2010 Earnings Call and compare it to IDC’s findings of the overall industry you should be able to derive conclusions from there.  That’s where it gets confusing.

First look at IDC.  As I reported in May (“IDC Q1 2010 Report: Blade Servers Growing, With #1 Market Share Going To…“), IDC reported that Q1 2010 revenue for all blade servers,  including x86, EPIC, and RISC blades, accounted for $1.4 billion in revenues.

Next, we review the Call Transcript from the Cisco Q1 2010 Earnings Call (http://www.morningstar.com/earnings/19007502-cisco-systems-inc-csco-q1-2011.aspx?pindex=4) and we see that Cisco reports, Our UCS server product family had another extremely strong quarter with growth year-over-year of 550% to an annualized run rate of almost $500 million.”

So, IDC reports there were $1.4 billion blade servers sold worldwide in Q1 2010 and Cisco reports they had a Year-over-Year growth of 550% to an annualized run rate of $500 million. 

Since we don’t know how 2010 is going to end up, we would need to do some estimation to play out this scenario.  We could estimate that all blade servers sales in 2010 will equal close to $5.6 billion ($1.4 x 4 quarters).  If so, in order to figure out what percentage Cisco would own, we would have to add their $500 million to the $5.6 billion estimated, so the adjusted 2010 blade server revenue would be $6.1 billlion.  If Cisco’s annual blade (UCS) share was $500 million, that would mean Cisco owned 12.2% of the overall revenue share.  Based on the Q1 numbers that IDC reported, if HP had 56.2% share and IBM had 23.6%, that leaves 20.2% to divide up between Dell, Cisco, Fujitsu, Oracle and all other blade server vendors.  Could Cisco own the #3 revenue spot with 12.2% revenue share?  Possibly, but that would leave Dell to have less than 8% market share. 

All of this speculation is based on the Q1 2010 Cisco statement that they have an annualized run rate of $500 million in UCS.  If we look at comments left on my post about the Q2 2010 IDC numbers (“REVISED HP Loses Blade Market Share in Q2“) we find a comment from Jed Scaramella, research manager, Enterprise Servers at IDC who comments that “Dell owns 11.8% unit share in x86 blades.”  Let’s revise my math based on what IDC reports for Q2 2010:

Dell: 11.8% market share
IBM: 24.2% market share
HP: 55.8% market share

Total IDC reported market share for Q2 2010: 91.8% which leaves 8.2% market share for Cisco and all others.

Don’t get me wrong – I’m NOT saying that Cisco is misreporting their UCS numbers, but the numbers don’t appear to line up.  Perhaps Cisco is including their C-Series rack server line.  Perhaps the difference lies in the fact that Cisco is using year-over-year data and I’m using projected 2010 revenue numbers from IDC.  I just don’t know.  I’m confused and hope that Cisco and IDC can figure out something, because I’d REALLY like to know where Cisco stands in the market compared to HP, IBM and Dell. Знакомства

Cisco, your move.