What is the Truth About Cisco’s Blade Server Market Share?

What is Cisco’s blade server market share?  That seems to be the mystery question that no one can really answer.  The previous IDC quarterly worldwide server report mentioned nothing about Cisco, yet readers and bloggers alike claim Cisco is #3, so what IS the true answer? 

I was fortunate enough to have some communication recently with Jed Scaramella, Research Manager, Enterprise Servers for IDC about this topic.  I asked Jed if Cisco is reporting any sort of data in regards to the revenue or units of the Cisco Unified Computing System (UCS) and he replied,

Cisco has not officially begun to report server sales to IDC (or Gartner I’m told).  They have used IDC as “baseline data” in Chambers’s statements claiming the #3 position; we’ve yet to review the details to the claims, so it’s not clear what Cisco is counting and how it relates to IDC’s taxomony of server sales. (i.e., are there including software in UCS sales, which IDC doesn’t).   We expect to report Cisco server sales in the next few quarters, after the figures have been vetted and accurately equate to IBM and HP’s business. 

While it does not appear that Cisco is reporting any sales data yet I see on a Cisco blog that on Sept 15, 2010, John Chambers, Cisco CEO, mentioned in a Cisco Financial Analyst Press Conference that a) “UCS has already taken the #3 market share spot in US/Canada for x86 blade servers” and b) “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.” 

Now I’m confused.  I can’t find any data to support Mr. Chambers’ comments, and for Cisco to not even be on the IDC list of worldwide blade server market vendors, it’s a pretty bold statement to say they are going to be in 2nd place (where IBM is at 24.2% as of Q2 2010.)

Can ANYONE point me to some supporting data that shows that Cisco is taking over the blade server market, because I sure can’t.

25 thoughts on “What is the Truth About Cisco’s Blade Server Market Share?

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  10. Jesse Freund

    Hi Kevin,

    Thanks for plugging my blog :-) And, yes, by way of disclosure I am a Cisco employee.

    Just to clarify, the comment was that Cisco would be 50% of the #2 competitor in terms of market share by the end of CY2010. Frankly, John Chamber’s record in terms of what he has told the street over the past 20 years is impeccable. If he says the Cisco is going to be #3 in the ww blade server market by the end of CY 10 and 50% of the #2 competitor in the same timeframe, I don’t know of a financial and industry analyst who wouldn’t believe him.

    One side note: If I were affiliated with certain competitors in any capacity I wouldn’t be too quick to cast dispersions on the credibility of Cisco’s CEO. Just sayin’.

  11. Kevin Houston

    By no means am I casting any dispersions on the credibility of John Chambers and I have no affliation to any of Cisco competitors – I am an independent technology blogger simply stating that IF someone is to make claims that Cisco’s UCS has CURRENTLY taken the #3 spot in blade server market share there should be SOME sort of data to support such a fact. All I am asking is that someone show me some analytical data that shows any sort of data on Cisco’s blade server sales. If there is, I would love to see it – heck, I’ll even blog about it – just show me the data!

    Thanks for your comment and for reading.

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  14. Kevin Houston

    @johnobeto writes up a good article on understanding IDC numbers (http://absolutelywindows.com/blog/2010/10/15/correctly-decrypting-the-idc-2q10-server-numbers.html) where he says the following about Cisco:

    “In the absence of solid numbers from Cisco, the numbers floated around the Intertubes – both whisper and written – is that Cisco sold 1,000 servers in calendar year 2009.

    We also know for a fact the Cisco is a very formidable competitor, imminently capable of double-digit growth even in new markets, which servers are for them.

    Well, if we take that 1000-unit figure as the GAAP GARP (Generally Accepted Rumormongering Principle) number of Cisco servers sold in 2009, and unilaterally declare that Cisco is able to achieve a 99.99 percent growth quarter-over-quarter, we still come up with about 4000 servers for them. Applying a $20,000 average selling price to these 4,000 servers gives up Cisco server sales of $80 million. A mere pittance or insignificance, depending on your point of view. ”

    Based on this math, how is that Cisco “UCS has already taken the #3 market share spot in US/Canada for x86 blade servers”??

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  16. John Obeto

    My 1st thought upon reading @Jesse Freund’s comment was that it must be a joke!

    Jesse, are you freakin’ kiddin’?

    We should take Chambers at his word because he “has the respect of Wall Street?”

    Didn’t Bernie Ebbers? Ken Lay? Ot even recently, Bernie Madoff?

    Put up numbers or pipe down.


  17. Anonymous

    If John had the facts…he would have shared them. This is simply to create buzz in the marketplace.

    Like the other comment out there…over #### customers are running on UCS Servers. The reality is he’s counting hosting facilities where many users/companies share the same server. While the statement may be true if you count “hosted” clients….it’s a far stretch from large companies deploying the technology.

    The biggest thing holding Cisco back is they bet their business on converged fabric, and quite frankly, its going to take a while to see FCOEE radified and widely adopted. While you’ll reduce your cable counts…you’ll increase your # of calls into support fixing bugs.

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  19. Lcaywood

    Kevin, I’ve provided some further explanation of this in my blog today (http://tinyurl.com/23pr622). Your questioning is completely fair, as we have not formally fed our revenue numbers into the IDC machine. That said, you can compare IDC’s published numbers with our material, public earnings statements and derive conclusions from there. Hope this helps.

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