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pww.comCisco Systems, Inc. - Special Call - NasdaqGS:CSCO

NasdaqGS:CSCO

Penny Bruce [Executives] 💬

Penny Bruce, representing Cisco's Investor Relations department, made the following statements during the Cisco Systems Tech Talk on UCS Innovations and Portfolio Expansion:

  1. Opening Remarks:

    • Provided a warm welcome to everyone attending the Cisco Systems Tech Talk on UCS Innovations and Portfolio Expansion.
    • Introduced Paul Perez, Vice President and General Manager of Computing Systems at Cisco, who would be presenting on the new UCS products.

  2. Introducing Paul Perez:

    • Passed the call over to Paul Perez to discuss the new UCS products and their significance to the market.

  3. Forward-Looking Statements Disclaimer:

    • Noted that the discussion might include forward-looking statements regarding the business, which are subject to risks and uncertainties outlined in detail in the company's filings with the SEC, particularly the most recent reports on Forms 10-K and 10-Q.

  4. Transition to Paul Perez:

    • Passed the call over to Paul Perez to begin his presentation.

  5. Q&A Session Introduction:

    • Announced the opening of the call for questions after Paul's presentation.

  6. Additional Information Request:

    • Asked Paul Perez to share more information about the relevance of the new products from a go-to-market and partner perspective while waiting for the first question.

  7. Closing Remarks:

    • Thanked Paul Perez for his presentation.

    • Announced that a replay of the audio cast would be available on investor.cisco.com.

    • Invited attendees to reach out to Cisco IR with any additional questions.

    • Concluded the session and thanked everyone for their time and participation.

Paul Perez [Executives] 💬

Paul Perez, Vice President and General Manager of Computing Systems at Cisco, discussed several key points during the Cisco Systems Tech Talk on UCS Innovations and Portfolio Expansion:

  1. Introduction to the Announcement:

    • This is the most significant technology announcement Cisco has made that year.
    • The announcement pertains to significant innovations to Cisco’s Unified Computing System (UCS), delivering a broader and more powerful portfolio of technologies.

  2. Success of UCS:

    • UCS has achieved a $3 billion run rate business growing at 30% year-over-year.
    • Many of the 36,000 UCS customers are net new Cisco customers, and over time, some of these customers have also purchased an additional $1 billion worth of other Cisco products and solutions.
    • UCS is used both externally and internally at Cisco, as other core businesses become increasingly compute-intensive.

  3. Positioning of UCS:

    • Although Cisco enjoys external success in server market share, it views itself as being in the computing market, not just the server market.
    • The initial launch of UCS focused on optimizing x86 virtualization environments and early enterprise private cloud deployments.
    • Operational simplicity, embedded automation, policy capabilities, and convergence of compute and fabric contributed to its success.

  4. Expansion of the Portfolio:

    • The expansion is necessary due to the evolution of application environments, characterized by edge-scale computing and cloud-scale computing.
    • Edge-scale computing includes the Internet of Everything, involving people, devices, data, and processes, with a focus on mobility, analytics, and replicated sites.
    • Cloud-scale computing involves increased traction in the service provider market, hosting providers, and application vendors transitioning to a software-as-a-service model.
    • According to industry analysts, 48% of servers are now deployed outside traditional data center walls.

  5. New Products and Innovations:

    • UCS Mini: A data center-in-a-box capability for customers, allowing seamless extension of the UCS operating environment from the data center to the edge.
      • Provides a complete data center experience in a simple-to-deploy, simple-to-manage enclosure.
      • Offers full fabric interconnect capability, including UCS Manager automation and service profiles, for up to 8 servers.
      • Offers a 30% reduction in capital expenditures and a 36% reduction in total cost of ownership.
    • Fourth Generation M4 UCS Servers: Expansion of the core data center portfolio, incorporating the latest technology from Intel and new Cisco innovation, the VIC 1300 virtual interface card, which includes Remote Direct Memory Access (RDMA) over Ethernet.
      • Provides a 39% improvement in total cost of ownership, 86% faster provisioning, and a 53% lower power footprint.
    • M-Series Modular Server Line: A new product line focused on modularity and density, complementing the B-Series blades and C-Series rack-mounts.
      • The first instantiation is a 2-rack unit high enclosure that can host up to 16 servers, organized as cartridges with 2 servers per cartridge.
      • Incorporates Cisco System Link Technology for server disaggregation, enabling sharing of network adapters and storage across servers.
      • Offers significant improvements in provisioning time, server density, and total cost of ownership.

  6. Management and Operating Environment:

    • Expansion of capabilities for the UCS Director, including integration of application containers for secure workload provisioning, extension of provisioning capability into the application layer for Hadoop, integration with Cisco’s Application Centric Infrastructure (ACI), and publication of a documented software developer’s kit and associated API.

  7. Market Opportunities:

    • UCS Mini and M-Series represent significant market opportunities, expanding the total addressable market (TAM) by addressing environments outside traditional data centers.
    • M-Series targets new markets and use cases such as electronic design automation (EDA), computer-aided design (CAD), online gaming, and service provider environments.
    • UCS Mini addresses the need for compute-heavy presence in remote offices and branch offices.

  8. Go-to-Market and Partner Perspective:

    • UCS Mini will help expand Cisco’s geographic coverage, particularly in Europe and Asia Pacific.
    • The new products are expected to enhance partnerships and recruit new application partners.
    • Joint announcements with partners for integrated infrastructure solutions are anticipated.

  9. Technical Details:

    • The VIC 1300 virtual interface card includes RDMA over Converged Ethernet, user-space NIC capabilities, and support for SMB Direct for Windows environments.
    • Cisco has invested in building an ecosystem of independent software vendors (ISVs) and partners for high-performance computing use cases.

  10. Market Differentiation:

    • Cisco believes that its innovations provide a 2- to 3-year leapfrog in capability, with built-in capabilities not yet expressed to the market.

    • Custom silicon development is a key differentiator, allowing Cisco to innovate in both silicon and software simultaneously.