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.
You and me both!
Instead of focusing on their math, concentrate on their English. Cisco appears to define their SRE modules plugged into routers as x86 UCS blade servers.
http://www.cisco.com/en/US/products/ps11273/index.html
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Kevin, Briefly (because it’s very late):
– The Q1 revenue numbers you cite include all blades; Cisco’s statements have focused exclusively on the x86 blade market in which we play.
– Mr. Chambers has made statements both about current state (as of Sept) in the N. American market–which is relatively easy to verify–as well as projections about where we’ll land relative to our peers next year. Getting the latter right involves factoring in expected overall growth of the x86 blade market over the year–but it’s reasonable to assume that our annualized $500M is not wholely or even mostly additive to the current projected totals. Generally when people buy UCS gear it’s instead of gear from someone else.
– Which means that HP/IBM/Dell shares can’t be assumed to be constant, either.
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Interesting to see how a second look at the figures drops market share from 12%+ to less than 8%. Either way they are still an enormous player in the market.
Mike, that would mean you believe Cisco takes the entire 8% of the remaining amount, which I think we all know to be a bit naive.
While Fujitsu et al may not represent massive numbers, to say they bring in 0% of the blade revenue globally is just plane incorrect.
I work for Dell
you are correct AWOL, PER IDC in Q210 Sun, NEC, Groupe Bull, SGI, Fujitsu, & Hitachi EACH had 1-2% of unit/revenue share. These vendors actually are called out separately unlike Cisco which is grouped into “others”. note that IDC’s “others” category has always had a significant number of units associated with it, even before cisco came to market with blades, so it is not a given that they even make up the entire “others” category today.
My guess/speculation is in the end cisco shipped 3-4K blade units in Q2 (most were likely in the US which is why they keep making statements about US only)
I also believe (again, this is only MY speculation) they are counting revenue differently than other vendors who report to IDC. It seems to me they are talking about revenue AT LEAST as blades + chassis+ FEX + Fabric Interconnect (all other vendors report ONLY BLADE REVENUE – not chassis, switches, software, ext. storage, beyond the box services) and maybe even going so far as adding software, services, external switching, & storage pieces to the mix (pure speculation based on their revenue statements & my speculation on the number of units sold). clearly Cisco blades are growing in terms of units & are a player in the market, but at this point at least I think their real penetration is on the order of the regional vendors listed above. Only Cisco can tell us for sure when they back up their statements with real apples to apples numbers verified by someone like IDC.
Mike, we are not counted in the IDC numbers at all at present, as we haven’t formally reported our revenues to IDC or other firms.
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I agree you havent reported to IDC, but I believe that IDC would say they are at least attempting to capture Cisco units (not sure how they would do that or how accurately) in the “others” category that is in their tracker. you can see some small bumps in the “others” units/revenue category in the last few quarters which i assume are mostly attributed to Cisco. agree their attempts to judge this without you reporting to them makes it difficult to know the accuracy of their assumptions
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