Cisco Is Losing Business Through UCS, Says Blade CEO

“So has UCS been a false move for Cisco? “Well, getting into adjacent spaces doesn’t always pan out.” he said. “I was a little surprised – albeit delighted – when Cisco decided to start competing with companies that were previously its partners. But I suppose if you are standing up and teling Wall Street you are going to grow at 20 percent, I suppose you’ve got to make radical moves like that”.

Overall Cisco has talked about attacking around 27 markets adjacent to its current territory, he said: “When I hear you have 27 priorities, you’ve actually got no priorities, I would compete any day with someone who has 27 priorities, because I’m only looking at one thing.”

I asked him, is it possible Cisco might actually fail? “I haven’t got into the fortune telling business, and I don’t want to be disparaging about the competition. The jury is still out as to whether this thing is going to pan out or not. But we, as a data centre fabric provider in partnership with the world’s leading server vendors, have beaten UCS in the largest financial institutions. Servers from well recognised server vendors are considered far superior to Cisco UCS, and I don’t think customers want to get locked into single vendor solutions.”

Cisco could actually be losing money over UCS, he told me. Blade claims to have 7.5 million network ports in production deployment all of which he thinks have been lost to Cisco: “Cisco’s average revenue per 10G port is $200, so we’ve deprived Cisco of about a billion and half dollars, entirely in the data centre, and that is not a small number, even by Cisco’s standards.” By comparison with that loss, he estimates that UCS is still at less than a $100 million run rate.

Virtualisation needs a virtual network

In the data centre, the amount of equipment per square foot is increasing rapidly, and users are having to consider the cost to acquire and manage all that kit, while taking care to maximise its utilisation. “Server virtualisation has come into play, but we think that less then ten percent of servers are virtualised.”

He thinks that Blade could help change that, by making it easier to communicate between virtualised servers across a virtualised network – especially when compared with what his competitor is up to. “We have VM-ready technology which can move network attributes automatically – it’s shipping and deployed, while Cisco’s version is in beta. We don’t charge for it, while Cisco charges an arm and a leg. Cisco says the infrastructure must all be Cisco, we say it doesn’t have to be all Blade. Cisco says you can only use VMware – and the latest version – we say you can choose whichver hypervisore you want.”

“We don’t lock the customer down,” he said. “That’s our value add in the virtualisation space.”

Asked to comment on Mehta’s opinoins, a Cisco spokesperson said: “Cisco does not break out data centre revenues. As stated in our Q2FY10 earnings announcement, Cisco’s UCS number showed a sequential order growth rates of over 100 percent, and over 400 customers.”