Cisco Doubles SAN Sales

Ciscos up-and-down Fibre Channel switch sales ticked up again last quarter, as the company doubled its storage revenue over the same quarter last year. (See Cisco Reports Q1.)

As usual, Cisco failed to reveal its exact storage revenue on its earnings call Wednesday night, but CEO John Chambers said storage sales increased 100 percent and orders were up 70 percent year-over-year.

Cisco’s cryptic storage reporting spurred the normal guessing game among analysts. To cite just two examples: Steve Kamman of CIBC World Markets put Cisco’s storage at $94.1 million for the quarter, up 47 percent from last quarter. Aaron Rakers of A.G. Edwards estimates Cisco’s revenue at $107 million for a 72.3 percent sequential gain.

Estimates like these indicate Cisco's storage revenue accounts for less than 1 percent of its overall sales, which were $6.5 billion for the quarter. (See Cisco Delivers Mixed Bag.)

There’s no disputing, however, that Cisco gained market share over the other major switch vendors this quarter. McData already announced its quarter was disappointing, in part due to slow director sales, and its new forecast of $164 million to $167 million would put this quarter's revenue flat with last quarter's and down from the same time last year. (See McData Takes a Direct Hit.)Brocade’s forecast of $140 million to $145 million would mark about a 20 percent increase from last quarter, but a decline of roughly 8 percent from last year. Brocade is scheduled to announce its earnings Dec. 6, but the company still faces a November 15 deadline to file previous reports or get delisted by the SEC. (See Is Brocade Going Private? and Brocade Bloodied Again.)

Cisco's latest figures represent a rally over last quarter, when Chambers said storage sales declined sequentially. One reason could be that Cisco ate McData's lunch. According to analyst Laura Conigliaro of Goldman Sachs, Cisco had its best quarter selling directors through OEM partner EMC and accounted for nearly half of EMC’s Connectrix switch revenue. Meanwhile, EMC has yet to qualify McData’s new i10K director.

— Dave Raffo, Senior Editor, Byte and Switch

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