Amid Gloom, Cisco’s Servers Approaching a $1B Business

Cisco's UCS server.

Cisco's Server in Shining Armor

Cisco’s unified computing system sales are up, according to a tweet yesterday from Jesse Freund,¬†an analyst relations manager at Cisco. The tweet pointed out that according to Cisco’s earnings released Wednesday, the networking company now had 5,400 customers buying the gear, up from 4,000 from the close of last quarter. That puts the server business at a $900 million run rate for the year.

Last year’s server market was $48.1 $15 billion according to IDC, with IBM in the lead with sales about $5.6 $17.8 billion. But for a business that was launched two years ago aimed at a fairly conservative section of the market, it’s worth noting that Cisco is making some apparent strides. Some of those customers have clearly moved beyond testing into some real deployments.

However, the company was hammered in the stock market as it lowered its revenue growth expectations for fourth quarter and embarks on a restructuring operation that will include an unspecified number of layoffs to be detailed this summer. The slow drip of information tied to the restructuring has me wondering if Cisco is still trying to figure out its exact plans. Of course, we already think Cisco needs to refocus on networking before its core competency gets away from it.

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