CA’s Perfect Storm (But For How Long?)
Nov16

CA’s Perfect Storm (But For How Long?)

LAS VEGAS:  This would appear to be the perfect time for CA Technologies, which has gathered its key customers and partners here for CA World ‘17. A growing data deluge, a sweeping digital transformation revolution, a heightening focus on security, and the exploding need for constantly evolving apps are all driving this perfect storm at which CA should be at the epicenter. However, neither a perfect storm, nor an epicenter can be weathered without severe risks, and based on the software giant’s most recent financial results CA’s success is still problematic. On October 25 the company reported FY18 Q2 revenue of $1.034 billion, and while that was up 2% year over year, net income was down 13% and bookings were down 1%. The outlook for the remainder of the fiscal year is approximately 5% increase in revenue to between $4.22-$4.25 billion, and a 5%-8% decrease in earnings per share. While painting an optimistic picture — highlighting the SaaS business growth, total new sales, Enterprise Solutions new sales, and Mainframe new sales “all outperformed the year-over-year decline in the renewal portfolio” — during the analysts’ call following the earnings report, CEO Mike Gregoire also noted “disappointing” sales execution in Q2. “In particular, velocity in sales outside of the renewal cycle of Enterprise Solutions products was short of our expectations.’ Overall, Gregoire said the company was well-positioned for the future. “We are well positioned in great markets, and our solutions are solving real problems for our customers.” CA sees itself as the toolmaker for the DT generation, pushing its modern software factory philosophy. Digital transformation should be an ISV’s dream market: spending on DT technologies will exceed more than $1.2 trillion this year, and continue to grow at almost 18% per year to $2 trillion by 2020, almost 20X the anemic growth forecast for the overall IT market. At last year’s event the company trotted out the its Built To Change paradigm, and reinforced it with the ‘Built to Change Summit’ in June. This week’s theme, No Barriers, is all about marrying CA’s own transformation experience with its products, services and expertise, to help its customers overcome the barriers embodied by DT, as Gregoire stated in his keynote yesterday. “The focus today is on innovating the next big shift for your company,” he said. “That is the number one priority we are focused on – providing you with solutions that will remove the barriers between your ideas and outcomes.” CA is helping a lot of companies to change, and Gregoire called out a few, including FedEx, Netflix and Citi, as well as telling the audience that they will be instrumental in...

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HPE: Smaller Is Better
Nov09

HPE: Smaller Is Better

Hewlett Packard Enterprise (HPE) has been pushing a smaller-is-better strategy for the last few years, spinning off PCs and printers, services and software, and now it looks like it’s applied that strategy to its mission-critical server line. Superdome Flex, the follow-up to Superdome X, the server family that started the company’s RISC-averse transition from Itanium to Xeon, opens up a $6-8 billion market that HPE wasn’t able to address effectively, HPE’s Randy Meyer, VP & GM, Mission Critical Systems, told IT Trends & Analysis. When it comes to the mission-critical x86 server market, driven by database, Oracle and SAP HANA applications moving from Unix to Linux, there were only a couple of choices, he said. While the up-to-16-socket Superdome X does the job well, the problem was at the bottom with 4-socket entry-level systems, especially for customers who knew they were going to eventually need more sockets. “In the Superdome X form factor, you paid a lot for the infrastructure.” With Flex, HPE went modular, making it much easier — and affordable — for customers to grow from 4 sockets all the way up to 32. “All of a sudden you have customers saying this is really cool.” Meyer believes this will open up a “huge chunk” of the market, and the ability to scale up and down will appeal to large customers, as well as the previously untapped midmarket. Following a couple of slow quarters, server revenues climbed 6.3% year over year to $15.7 billion in the second quarter of 2017, while midrange server revenue shot up 19.6% to $1.5 billion, and demand for high-end systems tumbled 18.9% to $1.3 billion, according to IDC. HPE held on to top spot (21.3% of the market), but revenues slid 8.4% YoY to $3.3 billion, while second-place Dell (17.7%) posted 7% YoY revenue growth. x86 server demand increased 10.4% to $14.3 billion, while non-x86 servers declined 21.5% to $1.5 billion. “Demand for two-socket form factors continues to control a majority of unit shipments now and going forward as they are the sweet spot for density-optimized servers which are used in datacenters,” said IDC’s Lloyd Cohen, director of Worldwide Market Analysis, Computing Platforms. Gartner’s server numbers were lower: 2.8% YoY revenue growth to $13.9 billion, and a 9.4% marketshare decline for HPE. RISC/Itanium Unix servers plummeted 21.4% in shipments and 24.9% in vendor revenue, which at least did better than the ‘other’ CPU category, which is primarily mainframes, down a whopping 29.5% in revenue (and that’s after an infrequent IBM z Series refresh). HPE reported significantly better results for high-performance computing. For its latest quarter the company said revenue from the HPC...

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Teradata: What’s Next?
Nov02

Teradata: What’s Next?

What’s next for Teradata Corporation? Today’s financial results follow on the heels of last week’s annual customer and partner event, tagged ‘The Edge of Next’, but the data analytics vendor has been struggling of late, as the analytics and AI markets start to accelerate and it transitions from a largely perpetual software licence to a subscription revenue model. Q2 revenue was $513 million, just short of the predicted $513.35 million, but earnings ‘plunged’ 80% year-over-year, and total revenue expectations for the year were forecast to fall between 8-10%. Released this morning, the Q3 numbers paint a much more positive picture: -product recurring revenue grew 14% from the third quarter 2016; -product annual recurring revenue (ARR) was up 23% year over year;  -sales funnel increases were driven by customer adoption of new purchasing and deployment options; and, -the projected revenue shortfall for the year was reduced by almost half, to 5%. “We reported better than expected revenue and earnings per share as we are seeing strong adoption of our new purchasing and deployment options available with Teradata Everywhere,” said Teradata President and CEO Vic Lund, in a prepared statement. “I am pleased that Teradata has turned the corner and is well positioned to deliver in the fourth quarter and build good momentum going into 2018.” TDC has approximately 1,500 customers globally, but the top 500 are the cream of the crop, accounting for close to 40% of the analytics market, according to company officials. They include 18 of the top 20 global commercial and savings banks, 19 of the top 20 telecommunications companies, the top six airlines, 11 of the top 20 healthcare companies, 15 of the top 20 global retailers, 14 of the top 20 travel/transportation companies, and 13 of the top 20 manufacturing companies, and collectively offer tremendous opportunities for substantial growth ,without considering every other potential public and private sector organization that will need a helping hand to successfully ride the analytics bandwagon. No matter how you fold, spindle or mutilate the numbers, the analytics market is huge, and growing huger [of course ‘huger’ is a word, I just used it!]: -the BDA software market (big data and analytics), which in 2016 reached $49.1 billion worldwide, is expected to grow at a five-year Compound Annual Growth Rate of 10.6%; -the embedded analytics market is expected to grow from $26.77 billion in 2017 to $ 51.78 billion by 2022, at a CAGR of 14.1%; -the risk analytics market is expected to grow from $17.60 billion in 2017 to $35.92 billion by 2022, at a CAGR of 15.3% -the customer journey analytics market is expected to grow from $4.76...

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Short-Term License Pain For Long-Term Subscription Gain?
Oct26

Short-Term License Pain For Long-Term Subscription Gain?

ANAHEIM: As the market waits with more than a little anticipation for next week’s Q3 2017 quarterly report, Teradata Corporation (TDC) is wrapping up its annual customer and partner event — approximately 4,500 attendees — which was held under the rather appropriate tag line, ‘The Edge of NEXT’. As the company suggest, ‘Next’ is the rapidly approaching analytics revolution, a market segment that has been around forever, but is undergoing rapid change and increasing adoption as the sheer volume and value of data escalates, and organizations start to achieve game-changing results folding, spindling and mutilating — i.e. analyzing — that cornucopia of data. Originating out of research at the California Institute of Technology (Caltech) in 1976, TDC began life officially in the proverbial California (Brentwood) garage in 1979, and shipped its first beta database management system (DBMS) in 1983. Fast forward to July 2017, and TDC, which now positions itself as the ‘leading data and analytics company,’ reported ‘dismal results’ for its second quarter, where ‘its top and bottom lines not only fell short of the respective Zacks Consensus Estimate but also marked significant year over year decline.’ The company is in the process of changing its business model, and as usual for a publicly traded company, investor — or at least analyst — patience is nonexistent. Last quarter’s revenue was $513 million, just a shade under the expected $513.35 million, but earnings ‘plunged’ 80% year-over-year, or 69% YoY on a non-GAAP basis. Expectations for the year are revenues of $2.095 billion to $2.140 billion, representing a decline of 10% to 8%, which makes next week’s Q3 results so interesting, to see just how the transition is faring as the revenue-model changes (hopefully) gather momentum. During the Q2 earnings call President & CEO Vic Lund told analysts TDC’s strategy, “which is business outcome-led and technology enabled,” is “extremely relevant today.” The new strategy, focused on customer success, is being supported “by our increased funnel and our momentum, which positions us well for the last half of 2017 and a strong start to 2018.” Teradata must not only overcome its business challenges, but also the changes sweeping its BDA market. Revenue projections are a moving target, but IDC puts the global big data and analytics (BDA) software market at $49.1 billion in 2016, and predicts it will expand at a compound annual growth rate of 10.6% through 2021. Rival research firm Gartner calls 2017 ‘the year that data and analytics go mainstream’, and that ‘[T]hose who fail to act today will suffer not just in 2017, but also hugely limit their potential for growth in 2018 and beyond, as the...

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Talent-Gap Cure Or Just Cur-AI-ting IT?
Oct19

Talent-Gap Cure Or Just Cur-AI-ting IT?

Cisco originally pitched a story focused on its latest initiatives to address the ‘IT skills and knowledge gap’, which is a big and growing problem, and while the just-released AI-powered predictive services can be folded, spindled and mutilated into a ‘talent-gap cure’, it appears more to be just a really good set of business solutions. The costs and resources required to keep the datacenter lights on can account for 70-80% of IT budgets, said Bryan Palma, Senior Vice President and General Manager, Cisco Advanced Services, but while improving efficiencies and uptimes will pay a huge business dividend, that doesn’t mean those freed-up resources will translate into the IT skills and knowledge required to facilitate the new IT reality, digital transformation, which by one estimate will be worth $493.39 billion by 2022, and is speeding along at a CAGR of 19.1%. The new services, available immediately, fall into two categories — Business Critical Services and High-value Services — and are extensions of what the company has been providing for some time, said Palma. Services is the second largest business unit at Cisco, at $13 billion and 25% of revenues, with 90% of its services revenue recurring. A big part of the company’s competitive advantage is its installed base of 50 million networks, he told IT Trends & Analysis, and the telemetry data from that provides Cisco with a better picture of what’s going on in the IT environment than practically every other vendor. Professional services can leverage that data to help customers shift their focus from maintaining their datacenters and network infrastructures to finding new ways to improve customer services and generate revenues, he added. “At the same time we’re seeing that IT has been more defensive and they are looking to be more offensive, and that’s where we’re looking to take them.” Calling it a new portfolio of subscription services, Business Critical Services ‘deliver more capabilities including analytics, automation, compliance and security by Cisco Advanced Services’ technology experts’. “In the past it’s been called optimization,” said Palma, and as part of their ongoing focus on constant improvement, have made a number of improvements. “What we’re trying to do is give them the flexibility to move with their strategic options.” The new service benefits include helping minimize human error by: reducing complexity and cost through automation, orchestration, and technical expertise; accelerating business agility and transformation through advanced analytics and machine learning capabilities; and reducing risk with automated compliance and remediation services.The business outcome objectives are to help reduce downtime by 74%, resolve issues 41% percent faster and reduce operational costs by 21%. The other side of the services portfolio, Technical Services,...

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Cisco: “The new datacenter is the multi-cloud datacenter.”
Oct12

Cisco: “The new datacenter is the multi-cloud datacenter.”

Already one of the biggest players in the red-hot cloud infrastructure market (it grew 25.8% in the second quarter to $12.3 billion), Cisco Systems — in third place with 8.2% marketshare, trailing Dell (11.8%) and HPE (11.1%) — has a lot of credibility when it says cloud is transforming the datacenter. “The new datacenter is the multi-cloud datacenter,” said Tom Edsall, formerly a Cisco Fellow, SVP and GM, Insieme Business Unit, Cisco Systems. However, he told IT Trends & Analysis, the challenge is now you have an infrastructure that is basically a multi-vendor infrastructure. Rather than just a collection of hardware and software from different vendors, you have to throw in the various cloud providers like Amazon and Azure. He said organizations have part of their infrastructure running on different clouds, with different APIs, and are struggling to make the differences disappear. “The problems that we encountered 10 years ago are happening all over again,” said Edsall. “Then it wasn’t cloud, it was multi-vendor.” He added that the company has had strong success with on premise with its ACI (Application Centric Infrastructure) portfolio with over 4,000 customers. But while the customers really like the application-centric approach, they are frustrated because “they can’t get the same API at Amazon.” They want to know how do they get a common experience across these systems, said Edsall. Ever helpful, Cisco recently announced a management and automation platform for its Unified Computing System (UCS) and HyperFlex Systems, Cisco Intersight. To be available 4Q17 in two versions — the Cisco Intersight Base Edition will be available at no charge, while the Cisco Intersight Essentials Edition will cost you — it is intended to simplify datacenter operations by delivering systems management as-a-service, instead of having to maintain ‘islands of on-premise management infrastructure.’ ‘The longer-term vision of Intersight is spot-on,” noted Matt Kimball, senior datacenter analyst, Moor Insights & Strategy. ‘Not only does it address the issues IT organizations face today, but it also provides a platform that can accommodate the unknowns of tomorrow. If Cisco successfully executes this vision, it will firmly position itself as a leader in multi-cloud infrastructure orchestration and management.’ Unsurprisingly, a canned quote included in the Cisco release was equally ebullient: “Organizations that move to cloud-based systems management platforms will find that service delivery quality is significantly improved, the overall risk to the business goes down, and IT staff productivity is increased,” said Matt Eastwood, Senior Vice President, IDC. “Artificial Intelligence (AI) –infused cloud-based management tools can offer deep insights into the state of the infrastructure, identify troubles before they become major issues, and enable quicker ‘root cause’ identification and analysis...

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