Cisco UCS Continues Strong Momentum

March 1, 2011 - 4 Comments

It’s been another excellent quarter for UCS. At the end of Q2FY11, the annual revenue run rate for UCS increased to $650M, from approximately $500M at the end of Q1FY11. The momentum behind Cisco’s Data Center, Virtualization and Cloud strategies continues to advance, and Cisco expects that it will continue  making great progress on being the first architectural player in the Data Center in almost two decades.

The total number of unique UCS customers increased to approximately 4,000 at the end of Q2FY11, from 2,800 the prior quarter. Due to what Cisco believes is UCS’s compelling total cost of ownership advantage, Cisco has added net new UCS customers each quarter. This indicates increasing interest and a rapidly growing market opportunity for UCS. Furthermore, adoption was relatively balanced by customer segment and vertical. From a geographical perspective, UCS continues to be strong in the US/Canada theater with momentum building in Europe, APAC and Emerging Markets.

Q2FY11 Orders Customer Segment Mix for UCS:

  • Commercial = 40%
  • Enterprise = 28%
  • Public Sector = 22%
  • Service Provider = 10%

Q2FY11 Orders Theater Mix for UCS:

  • US/Canada =  65%
  • EMEA = 17%
  • APAC and Emerging = 18

Along with the increase in the total customer base, over 1,000 UCS customers were repeat buyers. This is yet another healthy indication that more and more customers are moving towards full UCS deployments.

These data center rollouts are occurring in both existing and greenfield environments. Drivers in data center purchase decisions range from near-term cost reduction initiatives, such as infrastructure consolidation for power and space, to investments in strategic initiatives, such as overcoming stalled virtualization expansion and improving IT automation on the way to cloud deployment. A portion of the market is also increasingly interested in pre-optimized turnkey solutions for rapid deployment, a need Cisco meets via strategic partnerships with NetApp, EMC, Citrix, VMware and others. These solutions, too, are seeing healthy adoption, which is additive to standalone UCS sales.

Cisco’s architectural solution in the Data Center continues to gain traction and mindshare. At the end of Q2FY11:

  • Cisco’s Data Center business grew 59% y/y in revenue
  • Nexus 5000 revenue grew 56% y/y
  • Nexus 2000 revenue grew over 150% y/y
  • Nexus 7000 revenues grew almost 100% y/y to an annualized revenue run rate of $1B
  • UCS revenue grew over 700% y/y to an annualized revenue run rate of over $650M

With market interest in convergence and cloud reaching critical mass, moving increasingly beyond mere discussion to implementation. Cisco believes it is well-positioned with its data center architecture and a portfolio of market leading products. Cisco believe its data center solutions will meet critical customer needs in the near term and further support customers as they build out their new data center/cloud visions over the coming years.

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  1. This is a smart blog. I mean it.

  2. Congratulations for so good financial effects.

  3. This is a smart blog. I mean it. You have so much knowledge about this issue, and so much passion. You also know how to make people rally behind it, obviously from the responses. Youve got a design here thats not too flashy, but makes a statement as big as what you’re saying. Great job, indeed.

  4. Congratulations, that is a significant growth. In this current economic climate I would have expected most businesses to perhaps develop “steady” growth at best, but this just shows that dedication and hard work eventually pay off! All the best.