Cisco takes bite out of HP, IBM blade server share

Research shows Cisco gaining market share with its UCS servers at the expense of server giants HP and IBM.

After two years on the market, Cisco’s Unified Compute System (UCS) is starting to take significant business away from Hewlett-Packard and IBM blade servers.

In the first quarter of 2011, Cisco UCS accounted for 9.4% of factory blade server revenue, taking third place behind Hewlett-Packard Co. (50%), IBM (20.2%) and ahead of Dell Inc. (8.4%), for 1.6% of server revenue overall, according to the IDC Worldwide Quarterly Server Tracker.

Cisco’s success with blades appears to come at the expense of server giants HP and IBM. For the same period last year, HP owned 54.5% of blade server revenue and IBM had 23%. Dell’s market share has hovered around 8% for several years now.

UCS: A sight for sore eyes
Cisco’s arrival on the x86 scene two years ago was welcomed by Walz Company, which at the time was dealing with “a rash” of failures in its HP server environment, said Bart Falzarano, chief information security officer at the Temecula, Calif., critical document management service provider.

Walz had 50 HP rackmount DL servers, some running VMware, and HP MSA storage. The servers in particular were plagued with hard drive and firmware failures, and Walz had to add staff to keep up. 

“We were really struggling to get through that battle,” said Falzarano. “Our company was growing, and we were really struggling to scale our infrastructure.”

Walz considered a new HP BladeSystem c-Class, but the similarity of the components, tools and support model with its existing gear gave them pause. Cisco UCS, on the other hand, while very new, represented a departure from the platform that had given them so much trouble.

“With HP, we were using so many tools -- Log Viewer, Systems Insight Management -- plus a number of different support tools. To see all this consolidated to UCS Manager was a big thing for us,” Falzarano said.

The firm bought five UCS 5100 series chassis housing 34 B-series blades, two 6120 Fabric Interconnects and two MDS 9214 Fibre Channel switches connecting to a NetApp FAS 3140 storage array. Configuration was straightforward, Falzarano said, and the setup provides the firm with local hardware resiliency, thanks to VMware Vmotion for virtual workloads, and to UCS service profiles for bare-metal workloads like SQL Server. Just as importantly, the firm has had zero hardware or firmware failures in 18 months. “As far as the stability of the product, we were really impressed,” Falzarano said.

“[Cisco’s] here, and it does seem like they’re a viable competitor,” said Jed Scaramella, IDC senior research analyst for enterprise servers.

Newcomers to the x86 space don’t always fare so well, Scaramella said. “Other vendors will try and enter the space and a couple years later you won’t hear about them anymore. [Cisco] still has a long way to go, but it does appear that we have a new entrant in the x86 server space.”

Converged systems … to a point
A lot has changed in the blade market since Cisco announced UCS, said Scaramella. Early issues around blade server heat and density have been largely resolved, and IT managers have coalesced around a predictable use case for blades.

“We’re seeing blades tied to converged, highly virtualized environments,” Scaramella said, marking “the beginning phases of private cloud.”

Cisco UCS is the poster child for that model. Cisco partnered with EMC and VMware to form the VCE Company, whose Vblock is a “converged infrastructure” offering based on Cisco servers and networking, EMC storage and VMware virtualization. However, Vblocks represent a small portion of UCS sales, Scaramella said -- no more than 15%.

Nor are HP and IBM standing still. HP’s BladeSystem Matrix and IBM’s BladeCenter Foundation for Cloud are also in the fight. And while Cisco UCS may be raining on their parade somewhat, the overall market is growing, said Scaramella. Year over year, blade server revenue grew 23.8%, almost double overall server revenue of 12.1%.

While Cisco is clearly making headway in its new server business, it’s come at a price. While chasing the high-end server business, some say Cisco has let its core networking hardware business falter, losing router and switch sales to rivals including HP, Juniper and Lucent-Alcatel.

Let us know what you think about the story; email Alex Barrett, News Director at abarrett@techtarget.com, or follow @aebarrett on twitter.

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