HPE Strategy Clear As Mud
Sep28

HPE Strategy Clear As Mud

HP started in a garage in 1938, and with the recent realignments, including the spin-merges of services and software, it could find itself back there if the new and improved enterprise business does not progress as management expects. Annual revenue surged from $39.33 billion in 1998 to $127.25 billion in 2011 when the management philosophy was ‘bigger was better’. However, between the split of the PC/printer business (HP) and the enterprise component (HPE) and the various sell-offs and joint ventures, HPE has gone from annual revenues of around $60 billion (hardware – $20.4 billion; software – $4 billion; and services – $34.9 billion) in 2012 to an estimated $28 billion in 2017 (both services and software will continue to enrich HPE’s coffers, albeit as joint ventures with CSC and Micro Focus, respectively). The services spin-merge essentially shifts the 2008 acquisition of Electronic Data Systems ($13.9 billion) to CSC. The Micro Focus partnership offloads a number of less-than-successful HP software acquisitions, including: Vertica (acquired in 2011 for an unknown amount), plus pieces of Mercury Interactive ($4.5 billion in 2005), Opsware ($1.6 billion in 2007), and Autonomy ($10.2 billion in 2011 of which HP wrote off $8.8 billion a year later). Since coming on board in 2011, President and CEO Meg Whitman, following two other presidents in less than 12 months, has taken a company with the IT industry’s highest annual revenues but significant debt and questions about its future, and turned it into to two smaller but still large businesses, a drastically improved financial base, and questions about its future. She took over the enterprise business after the first split, and reported a 6% drop in revenues but higher earnings for the most recent quarter. That’s been good news for investors — like me — but for how long is a growing concern. A more detailed breakdown of this quarter’s results paint a troubling picture. By segment: -Enterprise Group revenue declined 8% to $6.5 billion with revenue from servers down 4%, storage down 8%, and networking down 22%; -Enterprise Services revenue fell 5% to $4.7 billion driven by 4% decline in Application and Business services and 6% decline in Infrastructure Technology Outsourcing revenue; -Software revenues fell 18% to $738 million with License revenues falling 28% and professional services falling 8%; and, -Financial Services revenue was up marginally by 1% to $812 million, while Intersegment net revenue was $541 million. HPE has been doing well fueling the growing movement to the cloud, which is outgrowing the overall IT market by more than 4x. It has been successful in supplying servers to big off-site cloud operators, while also meeting the needs of...

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EMC & SDE: Canniabalize or Be Cannibalized
Sep07

EMC & SDE: Canniabalize or Be Cannibalized

Today’s the day Dell closes the $65-billion EMC acquisition (and Apple releases the iPhone 7), but while the mega-deal has been inching through the regulatory and shareholder approval process, it’s been business as usual for the storage giant, and increasingly, the usual business has involved alternatives to its bread and butter, disk drives. The enterprise storage giant has been pushing flash, AKA solid state drives (SSDs), software-defined storage (SDS), and now, stealing a page from its virtualization business, VMware, software-defined everything (SDE). Also referred to as SDX, SDI (software defined infrastructure) and software-defined environments (IBM’s nom de guerre), SDE is am umbrella term that describes how virtualization and abstracting workloads from the underlying hardware can be used to make IT infrastructures more flexible and agile. In a recent conversation with EMC’s Manuvir Das, SVP, Advanced Software Division, he told IT Trends & Analysis that the current evolution of IT is offering customers a couple of choices in pursuit of shrinking data centers, lower CAPEX and OPEX and the ability to leverage the cloud: some form of do it yourself versus an all-in-one solution, and hardware versus software lock-in (and that at the end of the day, there’s no getting away from software lock-in). With 14 years at Microsoft, including the development of Azure, the company’s public cloud offering, he should know a lot about software lock-in. “The reality is there is nothing beyond software lock in… there is no way a customer can live in a world where there is no lock in somewhere in the stack.” Lock-in is an ongoing concern. “We don’t want to trade a closed hardware world for a closed software world,” said Nick Lippis, ONUG co-founder and co-chairman, said in his opening presentation at the Open Networking User Group spring conference in May. “All too often, the vendors have the upper hand,” stated IDC in a recent report. High switching costs or other “vendor control points,” such as proprietary technology integrations or overly customized applications, can make it too much trouble for enterprise customers to discontinue using one vendor and switch to another. Das said the challenge with a DIY approach to a complete software-defined solution — “the holy grail of what a software defined data center would look like” — is that he sees “very few customers who have the remotest idea of how to do that.” This is not something you get just off the shelf, he added. Of those who have taken this approach, he has yet to meet anybody “with any degree of success.” Lack of success doesn’t appear to be an inhibitor to SDE/SDDC. Vendors fighting for their slice...

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Rescuing IT From A Sea Of Alarms
Jun22

Rescuing IT From A Sea Of Alarms

IT operations management (ITOM) and assorted kin (i.e. IT Operations Automation and IT Operations Analytics) are hot, and getting hotter. According to IDC, the IT operations analytics software market grew more than 41% in 2014 and will be worth $2.5 billion by 2019 as ITOA becomes ‘a more standard part of the IT operations and DevOps toolkit.’ The future is even brighter, according to marketsandmarkets, which predicts that ITOA will average an annual growth rate of 35.2% from 2015 to 2020, soaring from last year’s $2.17 billion to $9.79 billion. ‘The explosive growth of IT operational data, significant shift of organizations’ core businesses towards cloud, and a substantial change from traditional to next generation technologies have provided immense opportunities to the ITOA solutions vendors, who are in turn helping the organizations yield better analytical results and performance.’ It breaks the market down into solutions vendors such as Oracle, IBM, HP, Splunk, SAP SE, Evolven, Microsoft, VMware, ExtraHop, and Microsoft, as well as a few small and medium-sized companies such as Nexthink, AccelOps, Bay Dynamics, AppDynamics, and Sumo Logic that offer comparatively narrower, yet locally-effective solutions and distribution networks in the ITOA ecosystem. Each layer of technology in the data centre is becoming progressively more complex to control and manage, noted consultant Anthony King. ‘The average server environment now has thousands of configuration parameters (e.g. Windows OS contains – 1,500+, IBM WebSphere Application Server – 16,000+, and Oracle WebLogic –  60,000+).’ Then there are the hundreds and thousands of production changes — i.e. eBay experiences 35,000 changes annually — brought about by continuous integration and continuous build practices. The problem is too much data, and not enough answers, said Akhil Sahai, VP, Product Management, Perspica. Current IT operations tools trigger a “sea of alarms” but they can’t distinguish the critical, service impacting events from false positives that do not require the immediate attention of an operator, he told IT Trends & Analysis. An ITOA vendor, Perspica was founded in 2014 to provide operational intelligence across the entire application stack, and deliver self healing. How do we help our customers get visibility into their application infrastructure, move past alarms to answers, and prevent downtime through early warnings, said Sahai. “Our customers are also suffering with alarm overload.” Dealing with false alarms takes up all their time, but we reduce alarms by 99%, said Sahai. In an increasingly application-driven economy, system outages and downtime are costly. Pespecia says that works out to $5,600 a minute, and with an average outage clocking in at 90 minutes, the total is $505,000 in lost revenue, damage to mission-critical data, and legal and regulatory repercussions, with...

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Dell: The Year of VDI… For The Midmarket
Mar09

Dell: The Year of VDI… For The Midmarket

The concept of virtualizing desktops, aka Virtual Desktop Infrastructure, has been around since the early ‘00s, with the promise of simplifying and lowering the cost of end-user computing, licensing, support and software maintenance, with mixed — and typically less-than-predicted — results. VDI followed thin client computing, which got its start a decade earlier, and both follow in the footsteps of dumb and smart terminals like 1964’s IBM 3270 and 1978’s DEC VT100. Reducing complexity, lowering costs and improving security and manageability are all laudable goals, so why have thin client, VDI and this decade’s variation, Desktop as a Service, met with such resounding yawns? The truth is that while the year of Thin Client, VDI or DaaS have yet to arrive, they collectively are catching on, according to Jeff McNaught, Executive Director of Marketing and Chief Strategy Officer of Cloud Client-Computing, Dell. With more than two decades history in this market, including co-inventing and spearheading the development of the Wyse thin client back around 1995, he tells IT Trends & Analysis that the market continues to grow at pretty decent rates. “We think we have enabled a whole new series of not just markets, but use cases”. The most recent available numbers show a declining thin and terminal client market, down 6.7% year-over-year, with shipments hampered by strong deployments in 2014, and ongoing economic and currency pressures in key parts of the market. IDC predicted 2015 shipments would reach 5.1 million units, but would return to steady growth from 2016 through 2019, reaching 6.4 million units in 2019. It’s currently a two-horse vendor race: HP held a slight lead over Dell, with 26.9% market share, versus 26%, with NComputing (8.8%) and Centerm (7.8%) holding down the next two positions. The shipment numbers are very anemic when you consider how the rest of the device market is doing. While 2015 PC shipments were down substantially YoY, they still came close to 300 million units. Tablet shipments are expected to drop a few percentage points to just 195 million units this year, while smartphones surpassed 1.4 billion units last year. Towards the end of last year Dell sponsored a study on thin clients that found that prospective customers don’t really understand how and where the technology can be deployed effectively. ‘The majority (of respondents) have an out of date view of thin client technology.’ The survey of 220 respondents globally (mainly US and UK) — 49% with 1,000-plus employees — concluded that ‘thin client hardware will have to make its way into organisations through proactive planning and transformation of the end user computing environment overall. While this sounds like a very...

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EMC: Bringing Hyperconvergence To The Masses
Feb16

EMC: Bringing Hyperconvergence To The Masses

EMC may be busy figuring out its pending future with Dell, but you don’t have to be a rocket scientist to understand that while the overall IT market is inching along at 0.6% growth this year (albeit to $3.54 trillion), the converged infrastructure (CI) market is growing at 10X — 6.2% year-over-year (to $2.5 billion), and the hyperconverged infrastructure (HCI) market is growing at 258X, with sales shooting up 155.3% (to $278.8 million) for the last reported quarter. It’s still early days for HCI, but EMC would love to see the kinds of results VMware achieved in the server virtualization space with its latest additions, the VCE VxRail hyper-converged infrastructure appliances (HCIA) for VMware environments. The economic benefits of VxRail are very clear, said Gil Shneorson, VP and GM VxRail, EMC. You can start very small and grow as you need. “That’s very appealing,” he told IT Trends & Analysis. Customers also don’t have to worry about planning ahead. “You don’t have the upgrade event in the future… or have to face issues when you buy a new solution”. EMC has taken all the guesswork out of it, with the integration and automation (and aggressive pricing), said Shneorson. “We think we are the only ones who are doing this.” Integrating the hardware and software together, and supporting it, “that is very important and a very enticing value proposition.” They may be the only ones ‘doing this’, but there are a lot of companies buzzing around the CI/HCI market. IDC estimates that total worldwide spending on converged infrastructure will hit $17.8 billion in 2016, up from $4.6 billion in 2012. It breaks the market down into three segments: -Integrated systems are pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element/systems management software; –Certified reference systems are pre-integrated, vendor-certified systems containing server hardware, disk storage systems, networking equipment, and basic element/systems management software; however, they are designed with systems from multiple technology vendors; and, -Hyperconverged systems collapse core storage and compute functionality into a single, highly virtualized solution. A key characteristic of hyperconverged systems that differentiate these solutions from other integrated systems is their ability to provide all compute and storage functions through the same server-based resources. Gartner also divides the integrated systems market into three broad categories: –Integrated stack system (ISS) — Server, storage and network hardware integrated with application software to provide appliance or appliancelike functionality. Examples include IBM PureApplication System, Oracle Exadata Database Machine and Teradata; –Integrated infrastructure system (IIS) — Server, storage and network hardware integrated to provide shared compute infrastructure. Examples include VCE Vblock, HP ConvergedSystem and Lenovo Converged System (formerly...

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