Cisco Top Vendor on Server Rental Heap

If the server market is any indicator of a stabilized economy, a new industry report provides that evidence.

The latest results issued by International Data Corporation reveals that factory revenue in the worldwide server market increased 12.1 percent year over year to $11.9 billion in the first quarter of 2011, the fifth consecutive quarter of year-over-year revenue growth,

Server market demand is continuing to improve around the world, the researcher said, with server unit shipments increasing 2.5 percent year over year in 1Q11 to 1.9 million units, which is the second highest quarterly total ever reported in the first calendar quarter of any year, IDC said.

Cisco is now the world’s third-largest blade vendor, surpassing Dell and trailing HP and IBM, according to IDC’s quarterly numbers. Hewlett-Packard, IBM and Dell were among the familiar names at the top of IDC’s list of the top server vendors for the first quarter. Even Oracle, a year after buying Sun Microsystems, has become a known entity in the server space, eWeek.com reported

“However, new to the rankings is Cisco Systems, the networking giant that two years ago unveiled the first versions of its converged data center offerings, the UCS, or Unified Computing System. The solution offers a tightly integrated package of compute, storage, networking, virtualization and systems management software.” eWeek said.

Matt Eastwood, group vice president of enterprise platforms at IDC, said that the so-called enterprise infrastructure refresh happened across the globe in the first quarter, with worldwide demand up across the board.

“Although the public sector weakened worldwide demand for servers across hosters, SMBs and enterprise customers remained strong,” Eastwood said. “This was the fourth consecutive quarter with double-digit year-over-year revenue growth as the market recovery extended from x86 servers to midrange Unix to high-end mainframe class systems for the first time in nearly three years."

Eastwood said this is evidence that heterogeneous systems remain important to customers addressing a wide range of workload needs in their data centers.

“As we moved into 2011, IDC predicted the technology refresh cycle would extend from volume- to value-oriented systems with somewhat longer planning horizons, and this is clearly happening,” he added.

Cisco has found its way onto IDC’s quarterly server report, with the first quarter being the first time the market research firm tracked Cisco’s numbers. According to IDC, Cisco captured 1.6 percent of the overall server market based on revenue, finishing seventh, nestled between NEC and Hitachi, according to Jed Scaramella, research manager for enterprise servers at IDC.

Cisco gained the No. 3 spot in the highly competitive and fast-growing x86 blade space, with 9.4 percent of the market. Cisco placed behind HP and IBM, and ahead by one percentage point of Dell.

Cisco’s data center business continues to grow. During a conference call with analysts and journalists to announce the company’s quarterly earnings May 11, “Chairman and CEO John Chambers lauded the data center business, noting that the company now has 5,400 UCS customers and an annual run rate of $900 million for UCS product orders. In addition, according to Cisco, businesses worldwide shifted 10 percent of their x86 blade spending to the UCS; that number was 20 percent in the United States,” eWeek said.

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