Cisco's Q3'FY12 data center revenue sequentially declined
Cisco's highly touted UCS products appear to have developed a "revenue pattern" over the past 2 fiscal years by sequentially declining during the 3rd quarter.
"The acceleration of the data center and specifically the UCS business, years ahead of our competition, is just one example where we grew Q3 revenue over 50% -- 57% year-over-year for the UCS business, while each of our top 2 data center competitors had flat or negative growth in their service business in the most recent quarter."
With regard to Cisco's 2nd consecutive quarterly decline in collaboration sales, Tavis McCourt - Managing Director of Equity Research for Raymond James states:
"We believe that the video conferencing equipment industry likely declined in 1Q12 for the first time since 2009, representing a rapid deceleration from the 20-30% y/y growth as recently as 1H11.
"We believe market shares have remained relatively stable over the last few quarters if one backs out Polycom's HP purchase. In terms of takeaways, it is clear that recent difficulties that Polycom and [privately held] LifeSize have had are not related to market share losses, but are rather due to a rapid change in industry growth trends. We believe the most likely culprits are a sudden weakening in Europe, longer sales cycles related to new cloud-based deployment options and desktop video options, and a likely maturing of the room-based endpoint market in the developed world."
Interestingly in his April 19th research note to your truly, RBC Capital Markets Managing Director - Mark Sue stated Polycom's weakness is partially due to a:
"Market transition from point products to packaged solutions."
According to Cisco's Q3'FY12 collaboration sales results (which includes TelePresence), it certainly appears that Cisco's TelePresence products are experiencing the same weakness.
