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Bringing the Cloud Home: How data center hardware vendors are seizing  private cloud opportunities
 

Bringing the Cloud Home: How data center hardware vendors are seizing private cloud opportunities

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The TBR Computing research team invites you to an invitation-only webinar on Thursday, Jan. 30, 2014, for a guided recap and analysis of quarterly trends in data center servers, storage and networking ...

The TBR Computing research team invites you to an invitation-only webinar on Thursday, Jan. 30, 2014, for a guided recap and analysis of quarterly trends in data center servers, storage and networking as reported in TBR’s Data Center Benchmark. As customer awareness of cloud efficiencies increases, hardware vendors are scrambling to offer secure, easily deployable private cloud products. Convincing customers that private cloud deployments are more effective choices than public cloud services remains a challenge, but TBR expects private cloud initiatives from Dell, EMC and other vendors will help stabilize revenues in 2014 as customer migration to public cloud continues.

Senior Analyst Christian Perry will share his perspective on the latest Data Center Benchmark results and provide webinar attendees with additional insight into vendor performance and the future of the data center market. He will then field questions from the audience related to this research.

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    Bringing the Cloud Home: How data center hardware vendors are seizing  private cloud opportunities Bringing the Cloud Home: How data center hardware vendors are seizing private cloud opportunities Presentation Transcript

    • TBR’s Computing Business QuarterlySM Research Highlights and Outlook Technology Business Research (TBR) Quarterly Webinar Series Jan. 30, 2014 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 2014 Outlook: Webinar Presenters 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 | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • CBQ 3Q13 Research Highlights and Outlook: Agenda TBR Data center customers are changing their consumption habits as hardware technologies evolve • Data Center Landscape Overview o Private-public cloud connection, buyer concerns and behaviors • Data Center Benchmark o o Private cloud deployments will increasingly lead to storage hardware pull-through opportunities. o 3 Customer comfort with public cloud will drive opportunities in the private cloud space. Evolving vendor landscapes create an increasingly competitive data center hardware market. 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 | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • Data Center Trends TBR 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. 4 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • Data Center Trends TBR Data center hardware vendors will leverage close customer relationships to overcome barriers to adoption of private cloud solutions 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. Deployment Integration Public Cloud Competition 5 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • Data Center Trends TBR Elastic pricing models and hybrid appliances will help hardware vendors bridge the public and private cloud divide 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. 6 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 TBR Data center hardware and gross margins continue to decline as vendors compete on price, software and services • 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. Revenue (in $ thousands) 7 Gross Profit (in $ thousands) TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • CBQ 3Q13 Research Highlights and 2014 Outlook: x86 Server TBR Tier 1 OEMs Dell, HP and Lenovo (IBM) will compete on price and workload-specific efficiencies to drive sales of x86 servers 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. TBR believes Cisco, Lenovo and Huawei established themselves as significant competitors and will continue to gain share. 8 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • CBQ 3Q13 Research Highlights and 2014 Outlook: x86 Server TBR The continued migration of workloads away from proprietary systems drove average x86 revenue growth in 3Q13 Average x86 server revenue growth improved sequentially in 3Q13, as customers continued to migrate workloads that traditionally required proprietary systems onto x86 servers 3Q13 x86 SERVER REVENUE GROWTH VS. x86 SERVER GROSS MARGIN TBR 40% Oracle Cisco x86 Server Gross Margin 35% HP Fujitsu 30% Dell NEC 25% Huawei IBM Bull 20% Unisys 15% -60% -10% 40% 90% 140% 190% x86 Server Revenue Year-to-Year Change NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE. SOURCE: TBR ESTIMATES AND COMPANY DATA Note: Revenue base includes only the vendors in the above graph. 9 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • CBQ 3Q13 Research Highlights and 2014 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 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. 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. 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. 10 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • CBQ 3Q13 Research Highlights and 2014 Outlook: Proprietary Server TBR Leading proprietary server vendors IBM, Oracle and Fujitsu invest in new technologies despite continued revenue declines 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 TBR 3Q13 PROPRIETARY SERVER REVENUE GROWTH VS. PROPRIETARY SERVER GROSS MARGIN 60% Proprietary Server Gross Margin Oracle 50% NEC 40% IBM HP (-64.3%, 34.6%) Bull 30% -30% Unisys (-84.0%, 12.3%) -25% Proprietary Server Revenue Year-to-Year Change Fujitsu -20% NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE. SOURCE: TBR ESTIMATES AND COMPANY DATA Note: Revenue base includes only the vendors in the above graph. 11 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • CBQ 3Q13 Research Highlights and 2014 Outlook: Storage TBR Storage vendors are using private cloud solutions to address customer requirements for efficient data management and workload optimization 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. Both large and small storage vendors are investing to address customer pain points associated with data proliferation through increased scalability and management simplicity. 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. 12 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • CBQ 3Q13 Research Highlights and 2014 Outlook: Storage TBR Continued enterprise spending challenges and increasing midmarket competition accelerated storage hardware revenue declines in 3Q13 Storage vendors’ hardware revenue is pressured by rising midmarket competition as vendors seek new revenue streams to offset limited enterprise budgets 3Q13 STORAGE REVENUE GROWTH VS. STORAGE GROSS MARGIN TBR 65% NetApp Storage Gross Margin 55% Fujitsu 45% HDS Oracle EMC NEC IBM 35% HP Quantum Huawei Dell 25% -25% Bull -15% -5% 5% 15% 25% Storage Revenue Year-to-Year Change NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE. SOURCE: TBR ESTIMATES AND COMPANY DATA Note: Revenue base includes only the vendors in the above graph. 13 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 TBR Networking vendors expand their cloud capabilities with software-defined management and security to protect customer loyalty 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 pullthrough sales of hardware. 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. 14 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 TBR Average year-to-year networking hardware revenue growth decelerated in 3Q13 due to commoditization and SDN technologies 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 TBR 3Q13 NETWORKING REVENUE GROWTH VS. NETWORKING GROSS MARGIN 75% Networking Gross Margin Cisco Brocade Juniper Oracle 50% Huawei HP Dell 25% -20% -10% 0% 10% 20% Networking Revenue Year-to-Year Change NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE. SOURCE: TBR ESTIMATES AND COMPANY DATA Note: Revenue base includes only the vendors in the above graph. 15 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • CBQ 3Q13 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 2014 will be ARM’s breakout year, but will server customers make the transition? The flash storage market is evolving quickly and creating fertile grounds for competition. The whitebox trend moves to storage and networking. 16 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • CBQ 3Q13 Research Highlights and Outlook: Q & A TBR Christian Perry Senior Analyst — Data Centers Email: christian.perry@tbri.com Twitter: @ITwriter Krista Macomber Analyst Email: krista.macomber@tbri.com Twitter: @klmacomber James McIlroy Vice President of Sales Email: mcilroy@tbri.com Telephone: 603.929.1166 17 Twitter: @TBRinc SlideShare: www.slideshare.net/TBR_Market_Insight YouTube: www.youtube.com/user/TBRIChannel TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • TBR Computing Practice Syndicated Coverage TBR Computing Practice Syndicated Research Coverage Device Benchmark Vendors Data Center Benchmark Vendors (Benchmark XLS data is also available) (Benchmark XLS data is also available) • • • • • • • • • • • • • • • • • • • 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 Corporate IT Buying Behavior & Customer Satisfaction Studies • Desktops • Notebooks • Services & Support • x86-Based Servers • Apple Enterprise PCs* • Cisco UCS* Computing Vendor Coverage • • • • • • • • • • • • • • • • Acer* Apple Asus* Dell EMC Fujitsu Google HP IBM Intel Lenovo Microsoft NetApp Samsung* Sony Toshiba *Semiannual publication 18 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
    • TBR Thank you, and see you next quarter! www.tbri.com @TBRinc 19 TBR Quarterly Webinar Series | 1.30.14 | www.tbri.com | ©2014 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.