Bringing the Cloud Home: How data center hardware vendors are seizing private cloud opportunities
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Transcript of Bringing the Cloud Home: How data center hardware vendors are seizing private cloud opportunities
TBR
T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
TBR’s Computing Business QuarterlySM
Research Highlights and Outlook Technology Business Research (TBR) Quarterly Webinar Series
Jan. 30, 2014
TBR
2 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
Christian Perry, Senior Analyst, Data Centers
Twitter: @ITwriter
Email: [email protected]
Computing Business Quarterly Research Highlights and 2014 Outlook: Webinar Presenters
Coverage and focus areas:
• Data center ecosystems
• Servers: x86, proprietary (UNIX/mainframe), microservers
• Storage: SAN, NAS, flash, object
• Converged infrastructure/integrated systems
• Private/hybrid cloud
• High-performance computing/hyperscale
Krista Macomber, Analyst
Twitter: @klmacomber Email: [email protected]
TBR
3 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
• Data Center Landscape Overview
o Private-public cloud connection, buyer
concerns and behaviors
• Data Center Benchmark
o Customer comfort with public cloud will
drive opportunities in the private cloud
space.
o Private cloud deployments will
increasingly lead to storage hardware
pull-through opportunities.
o Evolving vendor landscapes create an
increasingly competitive data center
hardware market.
CBQ 3Q13 Research Highlights and Outlook: Agenda
TBR Data Center
Benchmark
Vendors:
Brocade
Bull
Cisco
Dell
EMC
Fujitsu
HDS
HP
Huawei
IBM
Juniper
NEC
NetApp
Oracle
Quantum
Unisys
Data center customers are changing their consumption habits as hardware technologies evolve
TBR
4 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
Data Center Trends
Data center hardware vendors embrace the benefits of public cloud to drive private cloud solutions sales
Data center hardware vendors are accommodating private cloud
buildouts to build long-standing and profitable customer relationships
centered on IT agility and efficiency.
TBR
5 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
Data Center Trends
Public Cloud Competition
Integration
Deployment
Private cloud vendors, including Dell, HP and IBM/Lenovo, must jump multiple obstacles to reach market success. Conveying the value of
private cloud solutions will be the biggest challenge for data center hardware vendors.
Data center hardware vendors will leverage close customer relationships to overcome barriers to adoption of private cloud solutions
TBR
6 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
Data Center Trends
Hardware vendors are working to bridge the gap between public and private cloud solutions by providing scalable, pay-as-you-go pricing methods and tie-ins to cloud services.
Elastic pricing models and hybrid appliances will help hardware vendors bridge the public and private cloud divide
TBR
7 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
CBQ 3Q13 Research Highlights and 2014 Outlook: The Data Center Landscape
• Data center revenue for the vendors tracked in TBR’s Data Center Benchmark, including servers, storage and networking, declined 2.8% year-to-year.
• Data center gross margin of 42.1% declined 140 basis points year-to-year, with all product segments posting year-to-year declines due to cloud-driven hardware commoditization.
Data center hardware and gross margins continue to decline as vendors compete on price, software and services
Revenue (in $ thousands) Gross Profit (in $ thousands)
TBR
8 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
TBR believes Cisco, Lenovo and Huawei established themselves as significant competitors and will continue to gain share.
CBQ 3Q13 Research Highlights and 2014 Outlook: x86 Server
x86 Server Vendor Trends for 2014
As cloud models and x86 chip capabilities improve, hardware will grow increasingly commoditized. Dell, HP and Lenovo (IBM) will compete around services, support and software management capabilities to win deals.
The trend toward differentiating software and services delivered on low-cost hardware is evidenced by 3Q13 performance. In 3Q13 the efforts of Tier 2 OEMs to expand share cut into Tier 1 vendor efforts to compete on price to win server deals.
Tier 1 OEMs Dell, HP and Lenovo (IBM) will compete on price and workload-specific efficiencies to drive sales of x86 servers
TBR
9 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
CBQ 3Q13 Research Highlights and 2014 Outlook: x86 Server
Note: Revenue base includes only the vendors in the above graph.
Average x86 server revenue growth improved sequentially in 3Q13, as customers continued to migrate workloads that traditionally required proprietary systems onto x86 servers
The continued migration of workloads away from proprietary systems drove average x86 revenue growth in 3Q13
Cisco
HP
HuaweiIBM
Oracle
Unisys
Dell
Fujitsu
Bull
NEC
15%
20%
25%
30%
35%
40%
-60% -10% 40% 90% 140% 190%
x86
Ser
ver
Gro
ss M
argi
n
x86 Server Revenue Year-to-Year Change
3Q13 x86 SERVER REVENUE GROWTH VS. x86 SERVER GROSS MARGIN TBR
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.SOURCE: TBR ESTIMATES AND COMPANY DATA
TBR
10 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
Fujitsu is investing to differentiate its Sparc64 chip to gain Unix market share, but designing a competitive chip will prove more challenging for Fujitsu than for rival vendors with larger cash reserves such as IBM.
CBQ 3Q13 Research Highlights and 2014 Outlook: Proprietary Server
Unisys’ shift in its ClearPath mainframe strategy away from proprietary CMOS chips is a long-term play TBR believes will result in market share gains through improved solution flexibility.
Proprietary Server Vendor Trends for 2014
IBM is working to keep its Power server line relevant amid increased x86 server capabilities. However, the shift to Linux will help IBM correlate its value proposition to business cases.
Mainframe and UNIX server vendors work closely with customers on specific workload requirements to solidify their value propositions
TBR
11 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
CBQ 3Q13 Research Highlights and 2014 Outlook: Proprietary Server
In 3Q13 the global UNIX market continued to decline, and TBR expects the UNIX market will fall at a faster rate than the mainframe market through 2014
Leading proprietary server vendors IBM, Oracle and Fujitsu invest in new technologies despite continued revenue declines
IBM
NEC
FujitsuBull
Oracle
30%
40%
50%
60%
-30% -25% -20%
Pro
pri
etar
y Se
rver
Gro
ss M
argi
n
Proprietary Server Revenue Year-to-Year Change
3Q13 PROPRIETARY SERVER REVENUE GROWTH VS. PROPRIETARY SERVER GROSS MARGIN TBR
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.SOURCE: TBR ESTIMATES AND COMPANY DATA
HP(-64.3%, 34.6%)
Unisys(-84.0%, 12.3%)
Note: Revenue base includes only the vendors in the above graph.
TBR
12 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
Both large and small storage vendors are investing to address customer pain points associated with data proliferation through increased scalability and management simplicity.
CBQ 3Q13 Research Highlights and 2014 Outlook: Storage
Storage Vendor Trends for 2014
As today’s new applications drive rapid growth in size, speed and types of data, storage vendors have the opportunity to leverage private cloud solutions to help customers efficiently manage and secure data.
TBR believes effectively articulating cost savings enabled by flash is necessary for vendors to win deals in a marketplace that is highly competitive and focused around price and performance efficiency.
Storage vendors are using private cloud solutions to address customer requirements for efficient data management and workload optimization
TBR
13 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
CBQ 3Q13 Research Highlights and 2014 Outlook: Storage
Storage vendors’ hardware revenue is pressured by rising midmarket competition as vendors seek new revenue streams to offset limited enterprise budgets
Continued enterprise spending challenges and increasing midmarket competition accelerated storage hardware revenue declines in 3Q13
EMC
FujitsuHDS
HP
Huawei
IBMNEC
NetApp
Oracle
DellBull
Quantum
25%
35%
45%
55%
65%
-25% -15% -5% 5% 15% 25%
Sto
rage
Gro
ss M
argi
n
Storage Revenue Year-to-Year Change
3Q13 STORAGE REVENUE GROWTH VS. STORAGE GROSS MARGIN TBR
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.SOURCE: TBR ESTIMATES AND COMPANY DATA
Note: Revenue base includes only the vendors in the above graph.
TBR
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TBR does not expect SDN will contribute significantly to revenue growth for vendors until late 2014, at the earliest. However, efforts are under way to expand portfolios with SDN offerings.
CBQ 3Q13 Research Highlights and 2014 Outlook: Data Center Networking
Data Center Networking Trends for 2014
Security and software-defined networking are two of the primary drivers in the data center networking space, as customers seek to overcome challenges in their environments.
SDN lies at the heart of vendors’ cloud flexibility and efficiency value propositions. SDN solutions will drive pull-through sales of hardware.
Networking vendors expand their cloud capabilities with software-defined management and security to protect customer loyalty
TBR
15 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
CBQ 3Q13 Research Highlights and 2014 Outlook: Data Center Networking
Networking hardware revenue leaders Cisco, HP and Brocade will respond to shifting hardware demand by developing end-to-end networking capabilities and investing in disruptive technologies
Average year-to-year networking hardware revenue growth decelerated in 3Q13 due to commoditization and SDN technologies
Cisco
HP
Huawei
Oracle
Dell
BrocadeJuniper
25%
50%
75%
-20% -10% 0% 10% 20%
Net
wo
rkin
g G
ross
Mar
gin
Networking Revenue Year-to-Year Change
3Q13 NETWORKING REVENUE GROWTH VS. NETWORKING GROSS MARGIN TBR
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.SOURCE: TBR ESTIMATES AND COMPANY DATA
Note: Revenue base includes only the vendors in the above graph.
TBR
16 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
The whitebox trend moves to storage and networking.
Quarterly Topics
The flash storage market is evolving quickly and creating fertile grounds for competition.
CBQ 3Q13 Research Highlights and Outlook: Next Quarter Syndicated Topics
Data center ecosystems are morphing into workload-defined shapes that dictate customer purchase and deployment decisions
2014 will be ARM’s breakout year, but will server
customers make the transition?
TBR
17 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
Christian Perry Senior Analyst — Data Centers Email: [email protected] Twitter: @ITwriter
Krista Macomber Analyst Email: [email protected] Twitter: @klmacomber
James McIlroy Vice President of Sales Email: [email protected] Telephone: 603.929.1166
Twitter: @TBRinc SlideShare: www.slideshare.net/TBR_Market_Insight YouTube: www.youtube.com/user/TBRIChannel
CBQ 3Q13 Research Highlights and Outlook: Q & A
TBR
18 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
Computing Practice Syndicated Research Coverage
Device Benchmark Vendors (Benchmark XLS data is also available)
Data Center Benchmark Vendors (Benchmark XLS data is also available)
Computing Vendor Coverage
• Acer* • Amazon • Apple • Asus* • BlackBerry • Dell • Fujitsu • HP • HTC • Huawei • Lenovo
• LG • Motorola* • Nokia* • Panasonic* • Samsung* • Sony • Toshiba • ZTE
• Brocade • Bull • Cisco • Dell • EMC • Fujitsu • HDS • HP
• Huawei • IBM • Juniper • NEC • NetApp • Oracle • Quantum • Unisys
• Acer* • Apple • Asus* • Dell • EMC • Fujitsu • Google • HP • IBM • Intel • Lenovo • Microsoft • NetApp • Samsung* • Sony • Toshiba
Corporate IT Buying Behavior & Customer Satisfaction Studies
• Desktops • Notebooks • Services & Support
• x86-Based Servers • Apple Enterprise PCs* • Cisco UCS*
TBR Computing Practice Syndicated Coverage
*Semiannual publication
TBR
19 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
Thank you, and see you next quarter!
www.tbri.com
@TBRinc
TBR
T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
About TBR
Technology Business Research, Inc. is a leading independent technology market research and consulting firm specializing in the business and financial analyses of hardware, software, professional services, telecom and enterprise network vendors, and operators.
Serving a global clientele, TBR provides timely and actionable market research and business intelligence in formats that are tailored to clients’ needs. Our analysts are available to further address client-specific issues or information needs on an inquiry or proprietary consulting basis.
TBR has been empowering corporate decision makers since 1996.
To learn how our analysts can address your unique business needs, please visit our website or contact us today.
Contact Us
1.603.929.1166 [email protected] www.tbri.com 11 Merrill Drive Hampton, NH 03842 USA
This report is based on information made available to the public by the vendor and other public sources. No representation is made that this information is accurate or complete. Technology Business Research will not be held liable or responsible for any decisions that are made based on this information. The information contained in this report and all other TBR products is not and should not be construed to be investment advice. TBR does not make any recommendations or provide any advice regarding the value, purchase, sale or retention of securities. This report is copyright-protected and supplied for the sole use of the recipient. Contact Technology Business Research, Inc. for permission to reproduce.