These are the presentation slides from my presentation to DataCenterDynamics Converged 2014 conference in the UK, based on a research paper commissioned by them.
IBM’s Q3 2014 results disappoint – speeds up transformation
For the first time I can remember IBM has changed its financial reporting, bracketing its microelectronics OEM business into a discontinued business line: consequentially making it impossible to assess how it did exactly against the third quarter last year. It reported a net loss of $3.4b net loss for the discontinued businesses, reducing its total net income to just $18m.
I’m sure you’re wondering, like me, about its strategy and actions. Read more »
A regional perspective on HP’s separation
Further to our earlier analysis of HP’s proposed spin-off of its PC and printer businesses into HP Inc., I thought you’d be interested in the regional perspective.
We looked at the $365B spent on the relevant hardware products from all vendors in the year to June and split them by region (see Figure). While at a worldwide level PC/Printer spending represents 59% of the total, this increases to 60% in EMEA and 67% in Asia/Pacific; it was just 51% in the Americas. Enterprise (server, storage, network) spending was 33% of the total worldwide, but was only 33% in Asia/Pacific – it rose to 40% in EMEA and a massive 49% in the Americas. Read more »
HP putting the Ink in Inc.
Meg Witman replaced Léo Apotheker as HP CEO in 2011, just after the former had announced that it was considering selling off its PC business. Evidently the idea didn’t die as she’s now announced the spin off of a new company ‘HP Inc.’, leaving the rest as ‘HP Enterprise’. What changed in the mean time was the combination of PC and printer businesses in the PSS division back in March 2012 under Todd Bradley – the one-time CEO of acquired Palm and his replacement by Dion Weisler in June 2013; Don is slated to be the new head of HP Inc. when the deal is completed by the end of HP’s Fiscal 2015 year in October next year. The 2 companies will continue to be linked however, with Meg becoming chairman of Inc.’s board.
The Figure shows HP revenues split by the 2 proposed companies. Enterprise revenues grew significantly with the acquisition of EDS in 2008 – just before Inc.’s were badly effected by the Credit Crunch. Although Enterprise revenues have been consistently higher ever since, both of the businesses have seen a gradual decline since then.
I thought you’d enjoy a quick look at HP and some ideas on the potential of the 2 residual companies. Read more »
Symantec’s Security and Information Management – Veritas – bifurcation
Symantec is currently the world’s fifth largest software company – miles behind Microsoft, Oracle and IBM in the first 3 positions, but very close to SAP in fourth (see Figure). In the year to the end of June $6.0B of its $6.7B came from software – giving it a 0.7% share of the $886B market. Its net profitability at 15% however was less than each of these competitors.
The software market is too broad and participants too numerous perhaps for vendors to make a full frontal attack to gain share and – although as a category software continues to fare better than hardware, telecom and IT services – success depends on the selection of cool areas to pursue.
Symantec has decided to split itself in 2 – making its Security business a separately traded company from Information Management business, which it is to rename Veritas Technologies Corporation. I think you’ll enjoy my quick look at the repercussions.
Consolidate, Virtualise, Integrate, Cloudify – The New Data Centre Imperatives
Please click above to see my presentation on the new data centre imperatives given this week to IP Expo Europe in London. Data centre managers can create useful new strategies by addressing each of these 4 essential elements.
Your feedback is most welcome.
Lenovo’s System x – everybody wants to be our friend
So today System x has changed hands from IBM to Lenovo. The team hasn’t skipped a beat in its product introductions, which show a continued commitment to high-end, highly integrated products. There has been no change in System x’s strategy either, although its departure and arrival s going to have a deep effect on both parents. The business has declined in the last few quarters however (see Figure).
We attended a presentation from System x boss Adalio Sanchez, who is taking the 7.5k team across to Lenovo. It gave us a chance to think about the challenges and opportunities Lenovo will face before it can challenge Dell and HP for leadership of the x86 server market. Read more »
HP ProLiant Moonshot m400 – the first 64-bit ARM server
HP has launched 2 new servers today – both based on ARM microprocessors. The most significant is the Moonshot m400, which uses Applied Micro’s new 64-bit chips – a first in the industry. So the wait is over – we’ve got to congratulate ARM and everyone in the ecosystem. It’ll take some time, but at last the chip has a chance in the Enterprise server market.
HP also launched the m800 server based on the Texas Instruments 32-bit ARM SoC, a dense solution optimised for ‘real-time data processing of high volume, complex data, such as pattern analysis’.
As part of AllianceOne programme HP is also launching its Moonshot ARM-64 Developer programme to help developers test and port code to the new chip remotely on servers in its ProLiant Moonshot Discovery Labs. Read more »
Supermicro launches a gamut of new Xeon E5 servers
I wanted to add Supermicro to the list of Xeon E5 V3 launch suppliers covered in my blog. Supermicro has been growing its x86 server market share (see Figure) and well-known for the breadth and depth of its portfolio. It was the main server supplier to Service Providers and technically advanced enterprise customers who don’t need the deep handholding of Converged Infrastructure and Integrated Systems.
You’ll want to know more about what it’s launched and compare it with HP, Dell and IBM/Lenovo approaches. Read more »
Strong x86 and Virtualisation push Server market up 0.8% in Q2 2014
For the first time in 6 quarters the server market grew, albeit by just 0.8%. We saw strong sales of x86 servers, despite the expectation in the market for the new Intel E5 processors, which have just arrived. x86 servers grew by 2.6% to $11.3B in the quarter, while non-x86 (IBM Mainframe and Power, HP Itanium, Oracle Sparc) servers declined by 21.2% to $2.6B. Who would have believed back in 2008 that by the middle of 2014 x86 machines would account for 81% of market revenues? Read more »
Apple and IBM Partner for Enterprise Mobility
Our Figure shows Apple and IBM’s large, but non-adjacent shares of the IT market split by size of company and consumers. It’s a clear reason why the 2 would want to do business together today – very different from 30 years ago when Apple likened IBM to Big Brother in its Superbowl advert announcing the introduction of the Macintosh…. or when it moved from PowerPC to Intel Xeon chips to power the Mac.
Origina – pioneering Third Party maintenance of IBM software
ITCandor has just finalised a survey of the UK and Irish business IT markets for Origina – a services company specialising in providing maintenance for IBM software headquartered in Dublin. I spoke with the sponsor’s Managing Director Tomas O’Leary for his reaction and how he is building his business. You’ll want to know more about his views of the market and encourage you to download the full report from their site.
Dell at 30 – Plans Disruption, grows Share
Dell Highlights
- Michael wants Dell to have the role of disrupter and democratiser of technology
- It has improved its market shares in PC, Server
- It embraces Software Defined approaches to Storage and Networking
- Is a builder and broker of Clouds
- Could be the most successful of the largest IT suppliers in terms of growth – but it won’t tell
Following our analysis of Dell in January I thought it would be a good idea to profile them again – not least because this newly privatised company made a handful of statements about its business at its Annual Analyst Conference (DAAC) from which we’re able to draw a more or less complete picture. I’m sure you’ll want to learn more about its business and strategy.
Atos buys Bull for €620 million
Atos has had its offer of €620 million accepted by Bull’s board, allowing it to continue to build its IT Services. It’s a major deal, but not as big as its acquisition of Siemens IT Services back in 2011. In total the 2 companies’ revenues were €9,825 m ($13,169 m) in the year to the end of March. Net profit at €250 m ($335 m) was not impressive, representing only 3% of revenues. Both companies have extensive government business, although Atos’s is more European-wide than Bull’s these days. Bull will add its deep experience in mainframe maintenance, enterprise storage and supercomputing and close ties to the French nuclear industry. Atos currently has 73k and Bull 9k employees.
We think this is a good deal for both companies and represents part of a continuing consolidation in the European services market. We note that Steria recently accepted a bid from Sopra. Along with SAP the 3 new suppliers could become strong drivers of Cloud services in Europe.
HP helps the European Commission plan a federated Cloud
HP Cloud Highlights
- HP understands the EU cloud ecosystem must enable an open market, addressing barriers to adoption and meeting regulatory, legal, geographic, trust and performance constraints
- Active participants in EC programmes to build secure, trusted, federated clouds fit for purpose that produce societal benefits – GDP growth, employment and efficiency
- With European partners addresses critical issues of confidentiality, compliance, accountability and federation
- Targets to increase proportion of IT revenues kept in Europe among Managed Service Providers, resellers and ISVs
- Focusses on widely adopted industry standards, like OpenStack, to drive adoption while avoiding proprietary solutions
- Wants to help federate public cloud – not dominate and therefore has limited time given the rise of Amazon and other public Clouds in Europe
- Drives an open market place based on federation and not dominated by default providers who provide ‘lowest common denominator’ solutions that will prevent the market reaching predicted levels
- HP’s European Cloud activities are led by well-known cloud thought leader Xavier Poisson
I’ve always been a supporter of the European industry myself – way back at the beginning of the 1990s I was an Esprit project reviewer. I also gave presentations on the positive effects the opening of borders in the Europe 1992 plan – these went down particularly badly in the US. Neither had a strong effect on our industry.
Jumping to 2014 we’re not the only ones trying to rethink the definitions of Cloud Computing – regionally HP is too. Executive Xavier Poisson has a new vision for EMEA – a federated Cloud for business users, ISVs and Managed Service Providers to address the need for compliance, confidentiality, and accountability linking regional data centres together. In the process it will add positively to employment, revenue and the economy, while beating back the domineering approaches of today’s public ‘lowest common denominator’ Cloud suppliers from outside the region. I know you’ll enjoy thinking about a radically different approach, while I try to forget the parallels with the past.
Read more »
The £15.7 Billion UK Data Centre Market
UK Data Centre Highlights
- Excluding applications and maintenance the UK spent £15.7B last year
- Internal staff accounted for 51.2% (£8.0B)
- Infrastructure software spending was 17.7% (£2.9B), Network 13.6% (£2.1B), Server 11.9% (£1.9B), Storage £870m (5.5%)
- Cisco led with a 14.2% share (£1.1B) of external spending, followed by IBM (8.5%), HP (7.3%) and Dell (5.7%)
- Despite the ‘mega trends’ external data centre spending remained at £8B in 2011, 2012 and 2013
- Manufacturing spent most (24.5%) followed by Retail/Wholesale (17.0%), Government (13.7%) and Finance (11.0%)
- Despite many case studies Health and Education were only 7.1% of spending
- The improvement of the economy and vendor changes make this very dynamic in 2014
The UK market is very open and full of suppliers, thanks to a sharing culture and a common natural language with the US – the world’s largest IT marketplace at present. Marketing material typically comes for free with US companies almost always establishing themselves there first as they expand internationally. Nevertheless there are some major differences between the UK market and those in the US, Germany France and others. There are no indigenous suppliers following ICL’s sale to Fujitsu many years ago – at least in the hardware markets which are the subject of this research paper. We show market shares and sizes for the data centre market in the Figure. Read more »
Pluribus Networks – A Step Beyond SDN
Pluribus Highlights
- Founded in 2010 by 3 domain experts with 200 patents between them
- Expanding into UK, France, Netherlands, Italy and Portugal
- Creates a ‘virtual underlay’ which goes beyond many SDN approaches
- Sells its own Netvisor network hypervisor and appliances (using Broadcom and Intel Alta chips)
- 437 vendor appliances running Pluribus’ software
Having looked at Vyatta and Nicira a couple of years ago before they were acquired, I’m always interested in the development of network virtualisation and hypervising so jumped at the opportunity of talking to another start up working in this area. I spoke with CMO Dave Ginsburg and Paul Donovan, its new EMEA sales director. You’ll want to know more about what it does and how its approach compares to other SDN vendors. Read more »
IBM finds new Masters for its Birthday Mainframe
Happy Birthday! – IBM’s mainframe is 50 today and maintaining a strong position (see Figure for the evolving revenues and MIPS of System z since 2003). But it’s more than that – it looks forward as well as back.
I was lucky to be able to talk about computers with the UK regional winners of the Master the Mainframe competition in the UK recently as well as a number of recent graduates working on mainframes.
NetApp Steers for the Cloud
NetApp Cloud Highlights
- Has adapted its strategy, moving from being a horizontal to integrated system player
- Focuses its strategy on the Cloud – introducing Dynamic Data Portability
- Has a strong and growing relationship with AWS, Azure and other public Clouds
- Is building relationships with MSPs across Europe
- Does not offer competing Cloud services of its own
- Stands to gain from a major shift towards the adoption of Cloud services in 2014
Notes: total revenues from NetApp and VMware and Cisco’s ‘data center’ revenues included above Read more »
What is Cloud Computing?
IT and Communications are one of the world’s largest markets, accounting for $6.6 Trillion spending in 2013. While the thought leadership of major players subdivides things by mega trend – Big Data Analytics, Mobile, Social, etc. – few pay attention to definitions and market sizing.
It’s obvious to assume that Cloud Computing is newer, smaller, but growing at a faster rate – but what is it? For a number of years I’ve used generous definitions to identify Cloud spending, under which the market was worth $1.1 billion in 2013 (see Figure), but think it’s time to reappraise. Our goal is to create an acceptable measurement of this most important market, which is currently missing. Read more »