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pww.comCisco Systems, Inc. - Special Call - SEHK:4333

SEHK:4333

Satinder Sethi [Executives] 💬

Satinder Sethi provided insights into Cisco's data center strategy, product developments, and market positioning during the special call. Below is a detailed summary of his comments:

Background and Role

  • Background: Spent the last 20 years in the data center business, covering operations, architectures, sales, and system engineering.
  • Cisco Tenure: Joined Cisco in 2008 through the acquisition of Nuova Systems, responsible for building the Unified Computing System (UCS).
  • Current Responsibilities: VP of Data Center and Cloud Solutions at Cisco, overseeing product strategy, management, and engineering for the Unified Computing System group.

Cisco's Strategy

  • Core Philosophy: Driving convergence across compute, network, and storage through a policy-driven infrastructure approach to enable efficient application delivery and significant operational savings.
  • Architectural Approach: Focuses on an integrated architectural approach rather than a siloed, box-by-box method.
  • Market Response: Strong growth and market share with UCS, leading the converged infrastructure segment with nearly 50% share.
  • Partner Ecosystem: Leads with an ecosystem of partners, including EMC, NetApp, and IBM, to build converged infrastructure stacks that address customer needs for simplicity and operational ease.

Success Factors of UCS

  • Addressing Challenges: Built a new server architecture optimized for the virtualized data center, addressing challenges such as complexity, lack of visibility, and slow deployment times.
  • Operational Simplicity: Achieved unprecedented operational simplicity by crossing silos of compute, network, and storage.
  • Disruptive Innovation: Demonstrated that established vendors can lose market share if they fail to solve real problems and disrupt themselves.

Product Refresh

  • UCS Mini: Designed for enterprise edge environments, offering a "data center in a box" approach with centralized management capabilities.
  • M-Series: Modular server optimized for hyperscale cloud applications, featuring an innovative disaggregated architecture that separates the I/O subsystem from the CPU-memory complex.

WHIPTAIL Acquisition

  • Integration: WHIPTAIL, now called Invicta, integrated into the UCS architecture to provide solid-state memory capabilities, enhancing performance for workloads like VDI and databases.
  • Comprehensive Approach: Offers Invicta appliances and collaborates with strategic storage partners to provide a comprehensive approach to flash storage.

White-Box Servers

  • M-Series Availability: M-Series was not available in time for EMC's VxRack product launch.
  • Ongoing Partnership: Continues to partner closely with EMC in the context of VCE, with a robust roadmap of solutions that leverage the latest Cisco UCS products.

Hyperconvergence

  • Definition: Hyperconvergence combines compute with software-defined storage, integrated management, and is typically delivered as an appliance.
  • Customer Demand: Customers seek simplicity, speed, and scale, rather than specific technological components like software-defined storage.
  • Strategy: Supports hyperconverged solutions like VSAT and SimpliVity while also focusing on integrating management capabilities with traditional converged infrastructures like FlexPod.

Competition

  • Broad Portfolio: Cisco has one of the broadest portfolios in converged infrastructure offerings, with over 50% of integrated stacks shipped containing UCS.
  • Market Share: Has a significant lead in market share and technology capabilities, particularly with the policy-driven approach through UCS and ACI.
  • Innovation: Continuously drives innovation in converged infrastructure stacks, distinguishing itself from competitors.

Growth Outlook

  • Growth Drivers: Aims to capitalize on the overall data center spend, which is growing at approximately 5% to 6% annually, and take market share from competitors.
  • Future Growth: Sees potential for 20% to 25% compound annual growth rate (CAGR) for the UCS business over the next 2 to 5 years.
  • Market Penetration: Currently holds around 10% of the overall server market outside of blades, indicating significant room for further growth.

Customer Mix

  • Horizontal Phenomenon: Success spans across various market segments, including Enterprises, Service Providers, Public Sector, and Commercial.
  • Use Cases: Commonly deployed workloads include VDI, virtual infrastructure, databases, and Big Data applications.

Spending Trends

  • Web 2.0 Companies: Indicators for overall data center spend, driven by trends like 10G to 40G transitions, private cloud enablement, and Big Data growth.

Future Challenges

  • Innovation Pace: Focuses on keeping the innovation pace aligned with customer needs, rather than worrying about specific competitors.

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