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» VIEW ALL POSTS Jun 4 2009   4:15PM GMT

Cisco’s timing for Unified Computing System – a tad off?



Posted by: Bridget Botelho
Tags:
Cisco Systems
Dell
Gartner Inc
Hewlett Packard
HP
IBM
server market
Unified Computing
x86 servers

Does anyone else think it is a bad idea for Cisco Systems to enter the server market when the industry is experiencing the most significant year-over-year sales decline in history?

Worldwide server revenue declined 24 percent in the first quarter of 2009 and shipments dropped 24.2 percent compared to the first quarter of 2008, and no one went unscaved; all of the top five global server vendors - IBM, HP, Dell, Sun and Fujitsu/Fujitsu Siemens – saw double-digit revenue declines for the first quarter of 2009, according to Gartner, Inc.

Worldwide: Server Vendor Shipment Estimates, 1Q09 (Units)

Company

1Q09

Shipment

1Q09 Market Share (%)

1Q08

Shipment

1Q08 Market Share (%)

1Q08-1Q09 Growth (%)

Hewlett-Packard

530,849

30.8

683,433

30.1

-22.3

Dell Inc.

382,385

22.2

516,499

22.7

-26.0

IBM

230,984

13.4

302,057

13.3

-23.5

Sun Microsystems

60,294

3.5

84,313

3.7

-28.5

Fujitsu/Fujitsu Siemens

59,029

3.4

78,867

3.5

-25.2

Other Vendors

458,161

26.6

605,883

26.7

-24.4

Total

1,721,702

100.0

2,271,052

100.0

-24.2

Source: Gartner (June 2009)

Meanwhile, Cisco is marketing the hell out of its upcoming Unified Computing System (UCS), which is rumored to start shipping in a couple of weeks. The company has been offering tid bits of information about UCS through webcasts for months to build anticipation for the system. For instance, yesterday. Cisco announced it would offer rackmount servers in addition to blades.

But once the drumroll for UCS dies and the system actually ships, who’s buying?

I would love to be a fly on the wall in a Cisco executive meeting to hear their strategy with UCS. Do Cisco executives really think this is a good time to introduce an entirely new server system? And are they arrogant enough to think they can beat IBM, Dell and HP at their own game?

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