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Cisco Data Center Sales: Really $1 Billion Annually?
Cisco Systems' (symbol: CSCO) Unified Computing System seems to be gaining momentum among data center customers and cloud services providers. Indeed, if recent trends continue it looks like Cisco's UCS revenues will top $1 billion this year, according to some quick math from The VAR Guy. Not bad for a platform that didn't exist three years ago.
The VAR Guy
March 26, 2012
2 Min Read
Cisco
Cisco Systems’ (symbol: CSCO) Unified Computing System seems to be gaining momentum among data center customers and cloud services providers. Indeed, if recent trends continue it looks like Cisco’s UCS revenues will top $1 billion this year, according to some quick math from The VAR Guy. Not bad for a platform that didn’t exist three years ago.Cisco launched the UCS platform in 2009. It’s designed to united computing, network, storage access, and virtualization resources in a single system. Fast forward to the present and UCS sales are rising swiftly — thanks to growing relationships with ISVs like Microsoft — and well-known relationships with EMC, VMware and NetApp.
In a recent SEC filing, Cisco states:
“In the second quarter of fiscal 2012, as compared with the second quarter of fiscal 2011, sales of Data Center products increased by 88%, or $156 million, due to sales growth of 91%, or $153 million, of Cisco Unified Computing System products driven by increasing customer acceptance of the product. For the first six months of fiscal 2012, as compared with the first six months of fiscal 2011, sales of Data Center products increased by 96%, or $290 million, due to strong growth from Cisco Unified Computing System products.”
Now let’s reverse engineer those figures:
If 1H 2012 data center sales grew 96%, or by $290 million, that means the actual data center revenues were about $598 in the first half of 2012.
Reasoning: (290X100)/96=$308 million as the figure for 1H 2011 data center sales.
$308 million plus the $290 million growth equals $598 million for the 1H of 2012 data center sales.
Assuming UCS demand remains strong, it’s safe to say Cisco’s data center sales will easily top $1 billion in fiscal 2012. On the one hand, that’s impressive considering UCS didn’t exist three years ago. But on the other hand: Are UCS sales growing fast enough to help restore Cisco’s reputation as a true growth company and Silicon Valley innovator?
Perhaps more answers will surface during Cisco Partner Summit 2012 (April 16-19, San Diego).
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