Cisco Sees Data Center as Key to Continued Growth

Growth in the data center helped propel Cisco to record quarterly revenue for the eighth successive quarter, the company announced Feb. 13. Data-center revenues outgrew all of Cisco’s other businesses, and company executives outlined plans to make security more of an integral part of their strategy going forward.

Cisco reported profits of $3.1 billion on revenue of $12.1 billion, an increase of 44 percent and 5 percent, respectively. Although data-enter-specific revenues make up just a small portion of Cisco’s businesses—sales reached $548 million, versus the $3.7 billion Cisco recorded for its core switching business—that segment nonetheless managed to grow 65 percent. Just as an example of its success in that space, the company’s Nexus switch line for the data center—recently upgraded to 40-Gbit capabilities—reportedly enjoyed sales growth of more than 20 percent.

Cisco chief executive John Chambers said that Cisco now has over 20,000 customers for its Unified Computing System (UCS), up 87 percent year-over-year. “To put this momentum in perspective, our UCS plus Nexus 2k to 5K business is at an overall $3.5 billion annual run rate,” he said, according to a transcript of the call.

Cisco’s switch segment climbed a modest 3 percent versus 2011, and security was up by 1 percent. Cisco’s collaboration unit, including its telepresence business, fell by 11 percent.

Cisco will continue to invest in the so-called “Internet of things,” Chambers said, where connected devices send data into the cloud for processing by collections of data centers. Cisco will also continue to invest in smart networks, presumably building on its Intucell acquisition as well as its October purchase of vCider.

Cisco will continue to evolve its security products, which Chambers said would be integrated into a unified platform. That business grew just 1 percent, driven by the data center, but presumably Cisco will continue to invest there.

“We continue to win in security with an architectural play and as such are fundamentally shifting our strategy from a collection of products to a platform,” Chambers said. “The growth of our identity services engine managing the use of mobile devices and our acquisition of Cognitive Security providing an advanced threat defense, demonstrates how we are moving our strategy forward.” That process will take place over the next year or two.

 

Image: White78/Shutterstock.com

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