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TBR's Computing Business Quarterly Research Highlights and Outlook
 

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    TBR's Computing Business Quarterly Research Highlights and Outlook TBR's Computing Business Quarterly Research Highlights and Outlook Presentation Transcript

    • TBR’s Computing Business QuarterlySM Research Highlights and Outlook Technology Business Research (TBR) Quarterly Webinar Series Nov. 13, 2013 TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C .
    • Computing Business Quarterly Research Highlights and 2013 Outlook: Webinar Presenter Christian Perry, Senior Analyst, Data Centers Krista Macomber, Analyst Twitter: Email: Twitter: Email: TBR @ITwriter christian.perry@tbri.com @klmacomber krista.macomber@tbri.com 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 2 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and Outlook: Agenda TBR Data center customers are changing their consumption habits as hardware technologies evolve • Data Center Landscape Overview o Server consumption behaviors, hyperscale, commoditization • Data Center Benchmark o o Storage vendors are working to exploit opportunities in the midmarket. o 3 Customers are approaching workloads from a tiered perspective, impacting vendor portfolio decisions. SDN will be a critical piece of the network landscape. TBR Data Center Benchmark Vendors: Brocade Bull Cisco Dell EMC Fujitsu HDS HP Huawei IBM Juniper NEC NetApp Oracle Quantum Unisys TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • Data Center Trends TBR Server vendors are creating portfolio hierarchies to meet customer demand for workload optimization Server vendors that accommodate the evolving workload tiers are well positioned for success Mainframes Scale-up / Converged Processor utilization and memory-intensive workloads (ERP, transaction processing, etc.) UNIX servers Traditional x86 servers Server Scale-out / Hyperscale Inexpensive, open x86 platforms Microservers High-volume workloads requiring low but scalable compute performance (Web hosting, Hadoop queries, etc.) 4 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • Data Center Trends TBR Demand for cloud, simplicity and flexibility will feed scale-out opportunities and disrupt the traditional x86 market Hyperscale Server Growth 2015 $3 billion 970,000 units 2012 $2 billion 640,000 units DATA SOURCE: TBR ESTIMATES 5 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • Data Center Trends Revenue (in USD Thousands) TBR The nascent hyperscale market sparks marketwide implications as ODMs seal large deals and OEMs vie for remaining share SOURCE: TBR ESTIMATES 6 SOURCE: TBR ESTIMATES TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and 2013 Outlook TBR Data center revenue will continue to grow slowly, as hyperscale buildouts generate sales opportunities but dampen ASPs Data Center Vendor Trends for 2013 The data center industry faces commoditization as system functionality continues to shift from hardware to software, which is working to dampen margins. Customers are changing their approaches to infrastructure due to new cloud opportunities. Vendors are responding by shifting to solutionsbased portfolios. Vendors are focusing on the midmarket, where customers are increasingly adopting enterprise-class technologies designed for smaller environments. 7 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and 2013 Outlook: The Data Center Landscape TBR Hardware profitability declined year-to-year in the data center industry due to pricing pressures and increased commoditization • Data center revenue, including servers, storage and networking, declined 3.3% year-to-year and increased 1.6% sequentially. Storage was the only product segment to decline sequentially, dipping 5.8% (-4.3% year-to-year) due to weak enterprise demand and aggressive midmarket competition. • Data center gross margin of 43.4% declined 70 basis points sequentially and 110 basis points year-to-year, driven by commoditized and industry-standard hardware. 8 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and 2013 Outlook: x86 Server TBR Expanding up and downstream, x86 architecture allows OEMs to compete more aggressively around innovation and value x86 Server Vendor Trends for 2013 The traditional x86 server market will remain in flux through 2015, as customers evaluate their compute requirements on a hierarchical basis. The x86 server hardware market has become highly competitive, particularly when factoring increasing customer migration of workloads to public cloud alternatives, such as Amazon EC2. Microservers represent a growing opportunity for server vendors, as they will have the ability to bring viable new offerings to the marketplace that are honed to customers’ specific workload requirements. 9 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and 2013 Outlook: x86 Server TBR Despite the ongoing migration of workloads from proprietary servers, average x86 revenue declined in 2Q13 due to intense competition revenue growth improved in 2Q13 due to increased use of x86 servers for Average x86 server workloads that traditionally required higher-priced proprietary systems *Revenue base includes only the vendors in the above graph. 10 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and 2013 Outlook: Proprietary Server TBR Mainframe and UNIX server vendors work closely with customers on specific workload requirements to solidify their value propositions Proprietary Server Vendor Trends for 2013 Although in-memory database technologies are more expensive than traditional, both IBM and Oracle highlight them as necessary to speed important business insights. IBM is investing heavily in Linux-on-Power innovations to accommodate increasing customer adoption of Linux-based technologies. This move will help IBM stem double-digit declines to its Power business. Customers’ highly complex legacy applications, which require leading reliability and performance, will enable mainframe vendors to avoid the exponential declines plaguing the UNIX market. 11 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and 2013 Outlook: Proprietary Server TBR The proprietary server market continues to decline and consolidate as customers migrate workloads from UNIX to x86 servers TBR expects UNIX demand will continue to fall, while mainframe demand will remain approximately flat through 2015 due to mission-critical workloads requiring greater reliability and performance than x86 servers offer *Revenue base includes only the vendors in the above graph. 12 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and 2013 Outlook: Storage TBR Flash continues to disrupt the storage market as customers look for more options to improve workload efficiency Storage Vendor Trends for 2013 Leveraging flash storage technologies to accelerate workload performance is an important area of focus within the data center market, as shown by Cisco’s planned acquisition of solid-state memory system vendor Whiptail, announced in September. Vendors are increasingly looking to the midmarket for growth opportunities. For example, EMC continues to invest in its VNX platform, using flash as a differentiator. The software-defined data center trend is having a growing impact on the storage market, where vendors are working to provide customers with more options for managing their storage. 13 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and 2013 Outlook: Storage TBR Weak large enterprise spend and strong midmarket competition drove down storage hardware revenue year-to-year in 2Q13 Growing competition in the midmarket, limited enterprise budgets and the emergence of softwaredefined storage trends are pressuring the storage hardware market *Revenue base includes only the vendors in the above graph. 14 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and 2013 Outlook: Data Center Networking TBR Networking vendors compete for software and services presence to foster and protect long-term relationships with customers Data Center Networking Trends for 2013 The networking layer has become a bottleneck to availability and a barrier to continuous uptime, rendering the data center market ripe for introduction and adoption of softwaredefined networking technologies. TBR considers SDN part of the post-cloud transition, the next step in IT evolution for customers that want the flexibility and efficiency of cloud but are unable to transition their workloads due to security or regulatory concerns. The OpenDaylight Project aims to drive collaboration between leading vendors around SDN, but fierce competition remains due to robust long-term growth opportunities. 15 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and 2013 Outlook: Data Center Networking TBR Networking was the only segment to record year-to-year growth due to vendors’ increased focus on end-to-end networking capabilities Switching and routing revenue leaders Cisco, HP and Juniper will drive hardware demand by increasing focus on end-to-end networking capabilities 2Q13 NETWORKING REVENUE GROWTH VS. DATA CENTER GROSS MARGIN TBR Data Center Gross Margin 75% Cisco Brocade Juniper 50% Oracle NEC 25% -20% Huawei HP Dell -15% -10% -5% 0% 5% 10% 15% 20% 25% Networking Revenue Year-to-Year Change NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE. SOURCE: TBR ESTIMATES AND COMPANY DATA *Revenue base includes only the vendors in the above graph. 16 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and Outlook: Next Quarter Syndicated Topics TBR Data center ecosystems are morphing into workload-defined shapes that dictate customer purchase and deployment decisions Quarterly Topics The software-defined data center continues to gain momentum in the market. Vendors are battling for leadership as the nascent but disruptive converged infrastructure market takes shape and takes off. Opportunities around public and private cloud deployments are becoming more specific. 17 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • CBQ 2Q13 Research Highlights and Outlook: Q & A TBR Questions? Christian Perry Senior Analyst — Data Centers Computing Practice Twitter: @ITwriter Email: christian.perry@tbri.com Krista Macomber Analyst Twitter: @klmacomber Email: krista.macomber@tbri.com For additional information, please contact: John Spooner Director, Computing Practice john.spooner@tbri.com James McIlroy Vice President of Sales mcilroy@tbri.com Technology Business Research, Inc. Hampton, N.H. Twitter: @TBRinc SlideShare: www.slideshare.net/tbr_market_insight YouTube: www.youtube.com/user/TBRIChannel LinkedIn: www.linkedin.com/company/technology-business-research 18 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • TBR Thank you, and see you next quarter! www.tbri.com @TBRinc 19 TBR Quarterly Webinar Series | 11.13.13 | www.tbri.com | ©2013 Technology Business Research, Inc.
    • About TBR Contact Us 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. 1.603.929.1166 info@tbri.com www.tbri.com 11 Merrill Drive Hampton, NH 03842 USA 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. TBR T E C H N O L O G Y B U S I N E S S R ES E AR C H , I N C . 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.