Cisco’s UCS Business Is Driving the Company’s Growth in Europe
Why Cisco's Stock Increased by 10% in February (Part 6 of 20)
Revenue growth for Cisco in EMEA has risen
In the previous part of this series, we discussed how US growth for Cisco (CSCO) is accelerating. The company’s growth in the EMEA (Europe, Middle East, and Africa) region also showed good growth. As the chart below shows, the year-over-year revenue growth for Cisco in EMEA has risen from -2% in fiscal 2Q14 to 7% in fiscal 2Q15.
Surprisingly, Europe (EFA) was the stand-out market for Cisco—despite the geopolitical issues prevailing there. The company’s revenue growth in the United Kingdom was 17%, while Germany’s growth was 12% and Southern Europe’s growth was up by a healthy 20% year-over-year.
UCS strength is the main driver for Cisco’s EMEA growth
According to Cisco, the strength of the Unified Computing System (or UCS) was the main growth driver in Europe. UCS is a system that converges networking, storage, security, and applications into one infrastructure. This type of integrated infrastructure offers a cost-effective solution to Cisco’s customers.
Cisco sells its UCS products via a joint venture with EMC (EMC) and VMware (VMW), popularly known as VCE (VMware, Cisco, EMC). The companies created the joint venture with a vision of establishing a converged infrastructure for data center consolidation, IT-as-a-service, and the cloud computing market.
VCE offers enterprise IT solutions using technologies from VMware’s computing, Cisco’s networking, and EMC’s storage. This joint venture manufactures products under the name Vblocks.
Another major partnership that Cisco is involved in within the integrated infrastructure market is NetApp (NTAP). Cisco sells products under the name FlexPod through its partnership with NetApp, which is essentially a combination of Cisco’s UCS and NetApp’s FAS (fabric-attached storage) products.
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