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Alphabet’s (GOOGL - Free Report) Cloud Next announcements were huge, but didn’t dwarf the other big news involving Microsoft (MSFT - Free Report) using Qualcomm (QCOM - Free Report) chips in its servers, or Hewlett Packard Enterprise (HPE - Free Report) buying Nimble or the CIA’s alleged hacking.
Here are the top stories from last week:
Google Cloud Next
At its Cloud Next conference in California last week, Google demonstrated that it finally has a big growth engine that isn’t driven by the search services it is identified with. The cloud strategy has been unfolding over the past few years for both Microsoft and Google. But the companies have taken different approaches based on their existing strengths and weaknesses. In Google’s case, its intentions became clear when it hired VMware founder Dianne Greene roughly 16 months ago.
Greene has clearly worked to form, bringing in a steady flow of big clients including Walt Disney, Home Depot, Apple and Snap. At the conference, Google announced HSBC, eBay (EBAY - Free Report) , Colgate Palmolive and Verizon indicating the growing confidence in its platform.
Google also announced a big collaboration with SAP that will bring its enterprise applications to the Google Cloud Platform (GCP). This will benefit customers in many ways, giving them access to real-time insights based on big data and offload more complex tasks to GCP when constrained for memory. Within a couple of months, SAP will make its own cloud run on GCP and soon start offering G Suite products including Gmail and Google Calendar to its own customer base of more than 345,000 companies, including most of the world's top 2,000 firms.
There were also some new enterprise-focused Google Drive tools including Team Drives (allowing administrators to create, add and delete team members and assign permissions to them within a shared space that will retain shared files even when members change); Google Vault for Drive (that stores data on Google Drive for companies to export, search, hold and retain as required); Drive File Stream (already available for early adopters, this allows you to work directly with files on Drive using applications like Microsoft Word and Adobe Photoshop, which updates the changes automatically to Drive for access from any of your devices later); and Quick Access with Team Drives (that uses artificial intelligence based on an analysis of activity, interactions between colleagues, and workday patterns to serve the most relevant Google Drive files at any given time.
And that’s not all: Hangouts also got an enterprise version called Hangouts Chat that could help with corporate communications.
As far as acquisitions are concerned, the company announced a couple: AppBridge, which has a tool of the same name to facilitate migration of data (along with file permissions) from other storage solutions whether it’s on-premise devices, cloud services, or hybrid solutions to Google Drive. The second was Kaggle, which hosts data and facilitates machine learning contests.
Wintel Weakens Further as Microsoft Demonstrates Qualcomm SoC
At the Open Compute Project (OCP) conference last week, Microsoft was finally able to demonstrate a Windows server using the Qualcomm Centriq 2400, a 64-bit ARM-compatible server-grade 10nm system-on-chip. Centriq also works with accelerators, multi-host NICs, and storage technologies for workload optimization. The product is part of Project Olympus, Microsoft’s next-generation hyperscale cloud hardware design. To demonstrate its commitment to the project and open source in general, Qualcomm also joined Facebook’s OCP Foundation as a gold member.
For the time being, Microsoft says it will use the server internally, but it’s not a big stretch to see this as a trial run for broader deployment to serve its cloud customers. Microsoft is also working with Cavium’s ThunderX2 64-bit ARMv8 server chipset and AMD Naples server processor in order to identify the best fit and the best value proposition in different situations. A suitable second-source to Intel (INTC - Free Report) may lower costs for players, especially in an open source environment.
Cost reduction is the most important consideration at the moment because of the huge amount of data that must be made available for machine learning applications and better web ad targeting. That data is in addition to the amount generated from corporate workloads continuing to shift to the cloud.
If ARM designs are to make inroads into the server market, the best place to start is not the enterprise (where compute power is a bigger requirement) but the cloud where less complex operations are required to be carried out at a faster pace. And that’s exactly why ARM-based chips from a range of suppliers have been fighting for a toe hold.
Intel hasn’t yet been displaced as the performance-per-watt and performance-per-dollar leader, which gives it tremendous leverage to hang on to its nearly 100% market share. It can be said with reasonably certainty that displacing Intel entirely won’t be easy because most of the related software is written for its x86 designs and few companies have their own software stacks making the shift to ARM designs cost prohibitive.
Key Comments-
Microsoft Azure's Leendert van Doorn: "We found that [ARM servers] provide the most value for our cloud services, specifically our internal cloud applications such as search and indexing, storage, databases, big data and machine learning. These workloads all benefit from high-throughput computing," and “But this is for internal use only, and that is an important bit, because we see an opportunity for these class of devices for our own datacenter use, but we don’t really see much traction on the enterprise side. We have no plans at this point to produce an enterprise version of Windows Server on ARM.”
Anand Chandrasekher, senior vice president of Qualcomm Data Centers: "We're not interested in felling the giant in one fell swoop… We're going to be chipping away."
Patrick Moorhead of Moor Insights & Strategy: “Qualcomm’s recently announced Centriq 2400 is billed as the world’s first 10nm server processor—based on an instruction set from ARM Holdings. While Intel’s Xeon processors are based on a 14nm architecture, we do not yet know Centriq’s die size, power, price or performance , so there’s no way to empirically compare yet. Also, I am not in the camp of 10nm is always better than 14nm as Intel’s 14nm is superior to others with high performance, high-leakage designs. I am looking forward to more Centriq details.”
Intel statement: "We operate in a highly competitive market and take all competitors seriously," and "We are confident that Xeon processors will continue to deliver the highest performance and lowest total cost of ownership for our cloud customers. However, we understand the desire of our customers to evaluate other product offerings." New chips consolidating technology from its Altera and Nervana acquisitions are in the works.
HPE Buys Nimble
HPE is fattening up, but in a nice way.
After splitting away from the client and printer business, CEO Meg Whitman went on to spin out and merge the enterprise services business with Computer Sciences Corp, following that up with the spin off and merger of its software business with U.K.-based Micro Focus International. At one time, Michael Dell indirectly commented on the slimming strategy, saying it wasn’t the best way to pursue growth.
And now it’s apparent that that’s not the only thing on Whitman’s mind. After snapping up Silicon Graphics, SimpliVity, Cloud Cruiser and Niara, the company has now gone for one of the hottest tech startups called Nimble Storage.
HPE will be paying $1.09 billion in a deal expected to close next month. It will also assume or pay off $200 million in unvested equity awards.
Nimble broadens HPE’s all-flash portfolio for enterprise customers by filling the gap between its 3PAR (StoreServ) high-end arrays and entry-level MSA storage. It also brings on board the industry-leading predictive analytics and management tool InfoSight. Plus, there’s Nimble’s Cloud Volumes that allow data storage in the public cloud near Amazon AWS and Microsoft Azure data centers, facilitating data portability between AWS and Azure and cloud-based computation.
No wonder Whitman says, "Nimble Storage's portfolio… will help us deliver on our vision of making Hybrid IT simple for our customers."
To further sweeten things, Nimble has said that it currently has more than 10K customers.
It’s easy to see why Nimble would sell out: the company was growing revenue strongly, but was far from profitability (30% revenue growth for a 41 cent loss in the last quarter). It also got an offer it couldn’t refuse. HPE’s global distribution strength, strong brand, and enterprise relationships are things that can help it scale.
Moreover, Nimble is developing its own hyper converged offering and that is a segment where the really big players are fighting for share. By teaming up with HPE, it may be able to fund the significant investment required (CEO Suresh Vasudevan says: “We believe that joining forces with HPE enables us to further accelerate the pace of innovation that has been a hallmark of our value proposition to customers”).
HPE on the other hand is in an increasingly competitive market with Dell-EMC, Pure Storage, Kaminario, IBM and NetApp. Cisco is another competitor in the hyper converged space. Nimble doesn’t just increase its product breadth and increase its analytics capabilities but also brings it greater flexibility to decide its hyper converged strategy. Only time will tell if the hefty price tag it’s paying for Nimble will be worth it.
CIA Hacking Affects Big Tech Companies
Apple (AAPL - Free Report) , Google, Samsung, Sony, HTC, Microsoft and Facebook users were apparently affected by massive hacking operations of the CIA and other intelligence agencies, according to WikiLeaks, which reported the matter in 7,818 web pages and 943 attachments. The hacking relates to the CIA’s Center for Cyber Intelligence between 2013 and 2016. The NSA and the UK's GCHQ are also involved. CIA spokesman Heather Fritz Horniak has said, “We do not comment on the authenticity or content of purported intelligence documents,” which means that the allegations haven’t been confirmed or proved.
But the details of the report and the promise of more revelations in the future indicates that there is sufficient reason for concern.
The contention is that the CIA discovered, bought or otherwise obtained and exploited security flaws in Android and iOS devices without pointing them out to Apple/Google. As a result, it is thought that some flaws weren’t picked up by their internal teams for patching, thus leaving them vulnerable to exploitation. Even encrypted messages on WhatsApp were picked up by the CIA before they could be encrypted. And even Smart TVs were exploited using a technique that indicated the set was off when it was actually on and listening to the conversation in the room.
Apple is the only company to have come out and claimed that iOS 10 users weren’t affected although it couldn’t confirm a similar situation with older versions. At the same time, not all flaws were exposed, so Apple may not be in a position to know for sure. The other companies are looking into the matter.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Tech Roundup: GOOGL, MSFT, QCOM, HPE and More
Alphabet’s (GOOGL - Free Report) Cloud Next announcements were huge, but didn’t dwarf the other big news involving Microsoft (MSFT - Free Report) using Qualcomm (QCOM - Free Report) chips in its servers, or Hewlett Packard Enterprise (HPE - Free Report) buying Nimble or the CIA’s alleged hacking.
Here are the top stories from last week:
Google Cloud Next
At its Cloud Next conference in California last week, Google demonstrated that it finally has a big growth engine that isn’t driven by the search services it is identified with. The cloud strategy has been unfolding over the past few years for both Microsoft and Google. But the companies have taken different approaches based on their existing strengths and weaknesses. In Google’s case, its intentions became clear when it hired VMware founder Dianne Greene roughly 16 months ago.
Greene has clearly worked to form, bringing in a steady flow of big clients including Walt Disney, Home Depot, Apple and Snap. At the conference, Google announced HSBC, eBay (EBAY - Free Report) , Colgate Palmolive and Verizon indicating the growing confidence in its platform.
Google also announced a big collaboration with SAP that will bring its enterprise applications to the Google Cloud Platform (GCP). This will benefit customers in many ways, giving them access to real-time insights based on big data and offload more complex tasks to GCP when constrained for memory. Within a couple of months, SAP will make its own cloud run on GCP and soon start offering G Suite products including Gmail and Google Calendar to its own customer base of more than 345,000 companies, including most of the world's top 2,000 firms.
There were also some new enterprise-focused Google Drive tools including Team Drives (allowing administrators to create, add and delete team members and assign permissions to them within a shared space that will retain shared files even when members change); Google Vault for Drive (that stores data on Google Drive for companies to export, search, hold and retain as required); Drive File Stream (already available for early adopters, this allows you to work directly with files on Drive using applications like Microsoft Word and Adobe Photoshop, which updates the changes automatically to Drive for access from any of your devices later); and Quick Access with Team Drives (that uses artificial intelligence based on an analysis of activity, interactions between colleagues, and workday patterns to serve the most relevant Google Drive files at any given time.
And that’s not all: Hangouts also got an enterprise version called Hangouts Chat that could help with corporate communications.
As far as acquisitions are concerned, the company announced a couple: AppBridge, which has a tool of the same name to facilitate migration of data (along with file permissions) from other storage solutions whether it’s on-premise devices, cloud services, or hybrid solutions to Google Drive. The second was Kaggle, which hosts data and facilitates machine learning contests.
Wintel Weakens Further as Microsoft Demonstrates Qualcomm SoC
At the Open Compute Project (OCP) conference last week, Microsoft was finally able to demonstrate a Windows server using the Qualcomm Centriq 2400, a 64-bit ARM-compatible server-grade 10nm system-on-chip. Centriq also works with accelerators, multi-host NICs, and storage technologies for workload optimization. The product is part of Project Olympus, Microsoft’s next-generation hyperscale cloud hardware design. To demonstrate its commitment to the project and open source in general, Qualcomm also joined Facebook’s OCP Foundation as a gold member.
For the time being, Microsoft says it will use the server internally, but it’s not a big stretch to see this as a trial run for broader deployment to serve its cloud customers. Microsoft is also working with Cavium’s ThunderX2 64-bit ARMv8 server chipset and AMD Naples server processor in order to identify the best fit and the best value proposition in different situations. A suitable second-source to Intel (INTC - Free Report) may lower costs for players, especially in an open source environment.
Cost reduction is the most important consideration at the moment because of the huge amount of data that must be made available for machine learning applications and better web ad targeting. That data is in addition to the amount generated from corporate workloads continuing to shift to the cloud.
If ARM designs are to make inroads into the server market, the best place to start is not the enterprise (where compute power is a bigger requirement) but the cloud where less complex operations are required to be carried out at a faster pace. And that’s exactly why ARM-based chips from a range of suppliers have been fighting for a toe hold.
Intel hasn’t yet been displaced as the performance-per-watt and performance-per-dollar leader, which gives it tremendous leverage to hang on to its nearly 100% market share. It can be said with reasonably certainty that displacing Intel entirely won’t be easy because most of the related software is written for its x86 designs and few companies have their own software stacks making the shift to ARM designs cost prohibitive.
Key Comments-
Microsoft Azure's Leendert van Doorn: "We found that [ARM servers] provide the most value for our cloud services, specifically our internal cloud applications such as search and indexing, storage, databases, big data and machine learning. These workloads all benefit from high-throughput computing," and “But this is for internal use only, and that is an important bit, because we see an opportunity for these class of devices for our own datacenter use, but we don’t really see much traction on the enterprise side. We have no plans at this point to produce an enterprise version of Windows Server on ARM.”
Anand Chandrasekher, senior vice president of Qualcomm Data Centers: "We're not interested in felling the giant in one fell swoop… We're going to be chipping away."
Patrick Moorhead of Moor Insights & Strategy: “Qualcomm’s recently announced Centriq 2400 is billed as the world’s first 10nm server processor—based on an instruction set from ARM Holdings. While Intel’s Xeon processors are based on a 14nm architecture, we do not yet know Centriq’s die size, power, price or performance , so there’s no way to empirically compare yet. Also, I am not in the camp of 10nm is always better than 14nm as Intel’s 14nm is superior to others with high performance, high-leakage designs. I am looking forward to more Centriq details.”
Intel statement: "We operate in a highly competitive market and take all competitors seriously," and "We are confident that Xeon processors will continue to deliver the highest performance and lowest total cost of ownership for our cloud customers. However, we understand the desire of our customers to evaluate other product offerings." New chips consolidating technology from its Altera and Nervana acquisitions are in the works.
HPE Buys Nimble
HPE is fattening up, but in a nice way.
After splitting away from the client and printer business, CEO Meg Whitman went on to spin out and merge the enterprise services business with Computer Sciences Corp, following that up with the spin off and merger of its software business with U.K.-based Micro Focus International. At one time, Michael Dell indirectly commented on the slimming strategy, saying it wasn’t the best way to pursue growth.
And now it’s apparent that that’s not the only thing on Whitman’s mind. After snapping up Silicon Graphics, SimpliVity, Cloud Cruiser and Niara, the company has now gone for one of the hottest tech startups called Nimble Storage.
HPE will be paying $1.09 billion in a deal expected to close next month. It will also assume or pay off $200 million in unvested equity awards.
Nimble broadens HPE’s all-flash portfolio for enterprise customers by filling the gap between its 3PAR (StoreServ) high-end arrays and entry-level MSA storage. It also brings on board the industry-leading predictive analytics and management tool InfoSight. Plus, there’s Nimble’s Cloud Volumes that allow data storage in the public cloud near Amazon AWS and Microsoft Azure data centers, facilitating data portability between AWS and Azure and cloud-based computation.
No wonder Whitman says, "Nimble Storage's portfolio… will help us deliver on our vision of making Hybrid IT simple for our customers."
To further sweeten things, Nimble has said that it currently has more than 10K customers.
It’s easy to see why Nimble would sell out: the company was growing revenue strongly, but was far from profitability (30% revenue growth for a 41 cent loss in the last quarter). It also got an offer it couldn’t refuse. HPE’s global distribution strength, strong brand, and enterprise relationships are things that can help it scale.
Moreover, Nimble is developing its own hyper converged offering and that is a segment where the really big players are fighting for share. By teaming up with HPE, it may be able to fund the significant investment required (CEO Suresh Vasudevan says: “We believe that joining forces with HPE enables us to further accelerate the pace of innovation that has been a hallmark of our value proposition to customers”).
HPE on the other hand is in an increasingly competitive market with Dell-EMC, Pure Storage, Kaminario, IBM and NetApp. Cisco is another competitor in the hyper converged space. Nimble doesn’t just increase its product breadth and increase its analytics capabilities but also brings it greater flexibility to decide its hyper converged strategy. Only time will tell if the hefty price tag it’s paying for Nimble will be worth it.
CIA Hacking Affects Big Tech Companies
Apple (AAPL - Free Report) , Google, Samsung, Sony, HTC, Microsoft and Facebook users were apparently affected by massive hacking operations of the CIA and other intelligence agencies, according to WikiLeaks, which reported the matter in 7,818 web pages and 943 attachments. The hacking relates to the CIA’s Center for Cyber Intelligence between 2013 and 2016. The NSA and the UK's GCHQ are also involved. CIA spokesman Heather Fritz Horniak has said, “We do not comment on the authenticity or content of purported intelligence documents,” which means that the allegations haven’t been confirmed or proved.
But the details of the report and the promise of more revelations in the future indicates that there is sufficient reason for concern.
The contention is that the CIA discovered, bought or otherwise obtained and exploited security flaws in Android and iOS devices without pointing them out to Apple/Google. As a result, it is thought that some flaws weren’t picked up by their internal teams for patching, thus leaving them vulnerable to exploitation. Even encrypted messages on WhatsApp were picked up by the CIA before they could be encrypted. And even Smart TVs were exploited using a technique that indicated the set was off when it was actually on and listening to the conversation in the room.
Apple is the only company to have come out and claimed that iOS 10 users weren’t affected although it couldn’t confirm a similar situation with older versions. At the same time, not all flaws were exposed, so Apple may not be in a position to know for sure. The other companies are looking into the matter.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>