How much net profit does it make? Latest market share isn’t looking great and it’s very slim margins.
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Yeah, I wondered that as well. Stupid check-in topic. Get a bunch of completely out-of-touch execs to muse about what flimsy excuse they might use to execute us.
UCS is toast. What product do you think Todd was talking about today when he said they are going to get rid of some things? Maybe sell to Lenovo.
UCS loses money on every dollar of sales. Low margins and crazy commissions to all the sales teams to mainly to forecast and take an order. But, hey it makes Cisco’s revenue look higher so they can justify the $10M+ pay packages for SVP/EVP’s.
When I was at Cisco we "baked in" UCS into deals by heavily discounting it or having the partner show it as free by giving them heavy, offsetting discounts on other products the customer wanted. I think Cisco UCS sales have slumped because sales of appliance-based (on UCS) voice systems are drying up as it all moves to the cloud.
They can't fix the pricing of UCS. Thats the issue, and has always been the primary issue. The way Cisco is set up to pay commission means that for every sale you make, dozens of people will get comped..
When I worked at Cisco I used to sell UCS, and it was impossible to beat a Dell/HP on price for servers. Of course you shouldnt be selling on "price", but in the server world, more or less a server is a server and 99% of customers will buy on simple price. All the extra c-ap that Cisco was trying to do wasnt relevant, or was re-created by other tools.
Margins were ok at the very start of its inception; however, things are very different now, especially with the highly competitive landscape out there for X86. The battle cry is still "Its a system", but that isn't working anymore when you consider a world with HyperConverged systems, the differentiators have changed and products like Intersight are great, but Cisco needs to wake up and become more competitive in pricing with UCS.
UCS wasn't a money maker to begin with. Lenovo might be interested in taking it over.
Will be even worse now that nvidia acquired ARM and no AMD on UCS other than one server that doesnt sell. Plus you have all the CSPG people leaving or who have left its future does not look good.