Cisco Claims 4,000 Server Customers

Shortly after its second-quarter earnings statement revealed a rapidly growing server business, Cisco revealed on Tuesday that its server-customer count was nearing 4,000 as of Jan. 29. That’s an impressive number, considering Cisco’s Unified Computing System server business has only been shipping since summer 2009, and that buying and deploying UCS isn’t exactly the same process as with commodity machines. The number suggests many organizations are buying into the promise of converged infrastructure, despite inherent concerns over vendor lock-in and the price of replacing or scaling their vertically integrated architectures.

In fact, Cisco’s UCS customer count might well have surpassed 4,000 by this point, almost two months a month after its second quarter closed. If you’ll recall, Cisco’s server business grew 700 percent year over year and is now operating at a $650 million run rate, which means new customers are coming on board fairly regularly. The 40-percent-per-month growth rate of VBlock customers — VBlock being the system sold jointly by Cisco, EMC and VMware — supports this notion, although its customer base still counts only in the hundreds. Cisco also noted this morning that it already has more than 1,000 repeat UCS customers.

But Cisco isn’t alone in converged infrastructure success. Egenera, a company that takes a somewhat more-open approach to unified systems management, last week reported its best financial year ever. It has been selling its PAN Manager software and BladeFrame since the early 2000s. In contrast to Cisco, though, which sells the entire computing, networking and management stack only as a wholly integrated system, Egenera refocused its business two years ago on selling just the management software (although it still does sell its own hardware-inclusive BladeFrame systems, as well as systems built on Dell and/or Fujitsu gear). Egenera’s software customer base tripled in 2010, and the company claims a 200 percent year-over-year increase in software sales.

A few months ago, Oracle claimed a big pipeline for its Exadata data warehouse appliance, which suggests the company might also do very well with its Exalogic converged infrastructure system. The all-Oracle makeup of that solution led to some worrying among customers about lock-in, but that’s always been the case with Oracle and yet it keeps on selling its new offerings. Even Cisco utilizes VMware for the hypervisor layer and has partnered on storage compatibility with both EMC and NetApp.

I still think it’s up for debate whether converged infrastructure can compete with commodity gear and separate management software in the long run, but all signs right now suggest that it can. Although these types of systems do somewhat go against the scale-out and designed-to-fail notions often attributed to cloud computing architectures — a commonly touted use case for converged infrastructure — there is something to be said about high density and a whole system designed from the ground up to work as a unit. It will be worth watching Cisco over the next couple years to see how big its customer count grows and whether the approach that it made popular can make a dent in the overall server market.