Cisco sells over 400 UCS systems and executives bullish on VCE

Cisco had their quarterly quarter earnings call a few days ago [transcript care of Seeking Alpha]. These things are really interesting and I am starting to follow them. The senior people give some good summary of they latest goings on in their company and the analysts usually ask some good questions.

A few comments were made about Cisco UCS.

• Chambers : "Our UCS numbers are still in the early stage of customer acceptance and palettes, but again showed sequential (inaudible) rates of over 100% and now over 400 customers have ordered from Cisco."
• Chambers : "So in terms of the datacenter area we're starting to win the architectural battles, you're seeing the value on BTE with EMC and BM where you're seeing that it isn't about server standalone technology. We have no interest in that, but architectural plays. We're off to a good start. "

Interesting, 400 customers of which some would be large and some small purchases (remember how much UCS kit was at VMworld last year!). Also that the top brass view UCS as an architectural play. Interesting to see the reference to VCE (I think the BTE and BM are transcript errors for VCE and VM). Its not about isolated server technology.

There was a longer question and answer on UCS.

Richard Gardner – Citigroup

Okay great. Well, most of my questions have been answered, but I did want to ask you where you're seeing the most success in UCS? You're obviously on a pretty good trajectory there quarter to quarter. Where are you seeing the most success in terms of applications in workloads? Can you talk about who you go up against most often in competitive bidding situations? And why customers choice UCS over competing products when they (inaudible) as your product?

John T. Chambers

Let me take a little bit of cut at it, but I want to also not mislead you. We’re just up to 400 customers. Most of those are doing pilots and implementation. How the first couple dozen go in the big account service providers and enterprise to determine how your next wave goes. Why we’re winning, it’s an architectural play. I (inaudible) it’s a very well class product which in my opinion one that is well ahead of our competitors at this point in time. But it’s the architecture and how the network and possessing capability and storage capability comes together with the applications and the cloud. And the ability to build the architectures where many of the costumers are doing net.

Others are doing it and we’ve been surprised a little bit we’re off in the commercial market play with some real leading edge commercial customers just saying, hey, you save so much in terms of my splurge costs. So much in flexibility and you’re headed to where you’re going to go without locking me in and best in class products in each category. We’re going to line with you.

I probably would say, I would poll a discussion on tele-presences for the next quarter call. We’re probably two quarters out from being able to do the same meaningful discussion on the UCS side of the house. So what I think you can say is that we’re not only holding our own in the data center and virtualization. Padma, what you started with Cloud and what we’re really driving through, we’re having very good success with.

So early implementations of UCS have gone into big service providers and enterprise. How the early implementations succeed is key for ongoing success. Again mention of UCS being an architectural play with reference of how it is networking, processing and storage combining to deliver applications and Cloud.

Certainly looks like the stack is important to the executives at Cisco.

I wondered if it was the same over at EMC, so I dug up their latest earnings transcript. Asking about pipelines William Fearnley asked Joe Tucci "where are the bright spots here when you look across the world for 2010?" The second element to the answer was :

I think there are a lot of opportunities on the back of our partnerships with Cisco and VCE, and revitalizing our DELL partnership; I think those two are massive opportunities for us if we do them right, and I believe we can do them both right. Of course, as we really get into this next generation of how we take the cloud computing and really bring it, internal or private cloud market is going to be a big, big, big opportunity for us and how we really execute on that is phenomenal.

So Tucci is thinking the same as Chambers, VCE, big opportunities and Cloud. I suspect these guys are probably smarter than you or I. If they are betting big something might just be in this. Then of course, maybe they have just spent "big, big, big" money and they want some "big, big, bigger" return on their investment.

Rodos