Supplier Report: 10/17/2015

sn_watch_FrankPark

Everybody is talking about EMC. Meg is. Ginny is. The news (clearly) is.  Nobody knows what the end picture will look like, but wow… that sure is a chunk of debt (interest payments alone are $2.5B annually).

While attention is focused on EMC, IBM is about to release their Q3 results.  Could this be the bottom for their losses?

Microsoft is making grounds in the cloud space against Amazon while Red Hat announces a new acquisition in Ansible.

IBM

EMC

  • Dell-EMC: What Storage Customers Should Do

    This shouldn’t panic users, but users — especially big ones and those whose software or infrastructure stacks are dependent on particular Dell or EMC products —  should take the year or so that it will take before Dell-EMC is fully baked to reevaluate their infrastructure vendor list and product choices. One of my close friends, who runs storage at a company that spends several million dollars a year with EMC told me he got an email from senior management asking how the deal might affect their company; their plan is to add another storage vendor to hedge their bets.

    http://www.networkcomputing.com/storage/dell-emc-what-storage-customers-should-do/a/d-id/1322681

  • Why Did VMware (VMW) Plunge 8.1% on EMC-Dell Deal?

    An important thing to note here is that Dell will not be offering the regular trading stocks for VMware. Instead, the company will be issuing tracking stock that would reflect the performance of the trading stock. This will entitle EMC shareholders to have only economic interest in the trading stock but not own them (that is no voting rights or dividends). The absence of rights also makes some analysts speculate that the tracking stock might likely trade at a discount to the trading stock.

    http://www.zacks.com/stock/news/193486/why-did-vmware-vmw-plunge-81-on-emcdell-deal

  • EMC acquisition: Is it a good deal for Dell?

    Both vendors have acquired higher value software, although VMware eclipses all the software deals of Dell such as SecureWorks and Quest. Yet for the deal to work, its needs to benefit from economies of scale and this will probably mean a reduction in headcount and product portfolio where there is duplication. Mid-level marketing, sales and administrative tasks are also ripe for some cost cutting. But nobody should expect a repeat of the bloodbath happening at HP which says it expects to cut 58,000 jobs by end of fiscal year 2015. Dell is already pretty lean as is EMC. The federation model of EMC also means that that headline staffing numbers are relatively svelte as it stands.

    http://www.channelpro.co.uk/opinion/9496/emc-acquisition-is-it-a-good-deal-for-dell

HP Enterprises

Other

Photo: Frank Park

Supplier Report: 10/10/2015

sn_axe_danedwards

It was a very interesting news week.  The big talk going into the weekend is that Dell is making a play for EMC.  Dell would have to borrow a substantial amount of money to make this happen, and the rumor is that they are only interested in certain pieces, potentially breaking up Joe’s empire.

Speaking of empire building, Amazon is coming on strong this week with the announcement of their own IoT environment strategy AND a strategic partnership with Accenture to sell services.  This is a very interesting combination that demonstrates Amazon’s desire to overtake the enterprise market.

Microsoft also made waves with their laptop announcement.  As Microsoft unleashes their own products and hardware to go against Apple, what is left for HP Inc, Lenovo, and Dell?

Oh yeah, and IBM is creating AI to eliminate everybody’s job… just kidding (or so Ginny says).

IBM

EMC

  • Wait… there is EMC talks that don’t involve divesting or mergers with HP?

    The details surrounding this proposed merger are still very sketchy, with CNBC reporting that Dell would have to pay north of $27 a share, and the WSJ suggesting that Dell may only be interested in “parts” of EMC. Regardless, if Dell acquires EMC or picks off its best parts, there isn’t much investment upside beyond the short-term buyout pop that is likely already priced in EMC stock. However, if EMC acquires Dell, it could be a different story. Further, the Dell and EMC merger would be bad for the likes of HP and IBM.

    http://investorplace.com/2015/10/dell-emc-merger-great-fit-bad-hp-ibm/

  • More on the potential merger:

Hewlett Packard

  • Apple Can’t Kill Microsoft But It’s Crushing HP

    PC sales have declined as consumers flock to Apple Inc. (NASDAQ:AAPL) and Android devices instead. Gartner’s data is just the latest example of the personal computer’s secular fall and is bad news for Lenovo, the top PC maker with 20% market share, and Hewlett-Packard Company (NYSE:HPQ), the PC maker in second place. Weak PC sales have been killing Hewlett-Packard as shares are off more than 26% year to date. Microsoft has done reasonably well with its shares up 4.23% year to date, as the company’s Office and Server products are more than offsetting Windows’ decline. Investors can only hope Hewlett-Packard’s additional layoffs and cost control measures will turn things around for the giant.

    http://www.insidermonkey.com/blog/apple-cant-kill-microsoft-but-its-crushing-hp-376244/

Other

Supplier Report: 10/3/2015

sn_pumpkin_AaronBurden

IBM’s long term plan of IoT, Big Data, and Analytics seems to be getting some traction even during a rough Q3.  HP is fighting the ghosts of old decisions as they finalize their big split.  While HP celebrates their split, EMC is telling the world they have no intention to follow that strategy.

IBM

  • IBM Is Fading Back Toward Major Support

    As October begins, it appears IBM is headed for its third straight lower monthly low. This current downtrend, which began on July 21 with a huge downside gap, has dropped shares nearly 20%. Late last month, the initial down leg of the post-earnings breakdown found support near $140. IBM began to rebound on Aug. 26, but the upside was well-contained. With very light bullish interest, despite the steep decline from the summer highs, the stock was unable to move past its massive Aug. 24 opening gap. Shares have been trading in a tight range since while the major indices went on to recover most of the mid-August selloff. The significant lagging action continues to weigh on Big Blue and will likely drive it lower in the near term.

    http://www.thestreet.com/story/13309491/1/ibm-is-fading-back-toward-major-support.html

  • IBM’s IoT Investments Are About To Pay Off

    A recent IDC survey found that nearly 75% of IoT market makers are planning to deploy or have already deployed IoT systems in the next year. This proves that IoT is moving from the planning stage to the action stage, bringing the technology to life. The survey also found that of all industries tied to IoT, transportation and healthcare are furthest along, ready to deploy IoT technologies soonest.

    http://seekingalpha.com/article/3536076-ibms-iot-investments-are-about-to-pay-off

  • IBM acquires Meteorix to expand HR service offering

    Acquiring Meteorix will make IBM one of the most experienced Workday service providers in the world, the company said, allowing it to better implement the services on behalf of customers thanks to the firm’s team of 200 consultants who specialise in delivering high-value services, while IBM will continue to focus on boosting the sales of Workday.

    http://www.cloudpro.co.uk/hr/5397/ibm-acquires-meteorix-to-expand-hr-service-offering

  • Analytics are better with shared storage and not scale-out, says IBM

    [With] Spectrum Scale Native RAID, the cluster data is managed using higher-level erasure codes to protect against multiple disk failures while offering significant disk savings over the 3x replication found in typical HDFS installations. ESS stores data using declustered RAID6 with support for either 2-fault or 3-fault disk fault tolerance… ESS distributes the data and parity information evenly across all disks in the system [which] allows for storage rebuilds triggered by a disk failure to complete faster than traditional RAID rebuilds by distributing the work across many disks rather than just a few.

    http://www.theregister.co.uk/2015/10/02/ibm_analytics_better_shared_storage_not_scaleout/

  • IBM: Nanotube Breakthrough Will Create Low Power, Faster CPUs

    Big Blue is claiming it can not only build carbon nanotube transistors, a claim widely acknowledged as feasible, but it can also connect the nanotubes to other processor components and circuitry, a claim no one else has made so far.

    http://www.informationweek.com/cloud/ibm-nanotube-breakthrough-will-create-low-power-faster-cpus/d/d-id/1322455

Hewlett Packard

EMC

Oracle

Other

Photo: Aaron Burden, StockSnap

Supplier Report: 9/26/2015

sn_leaf_Ales Krivec

It was another big week for IBM and Watson with the announcement of Watson offices moving to Silicon Valley.  IBM wants to be close to the disruptions and maybe cause a few.  But as businesses expand into the unfamiliar world of AI, cloud, and SaaS, are they locking themselves into environment they can’t get out of easily?

As datacenters and server budgets shrink, is there an exit strategy to the externally hosted ecosystem?

IBM

  • IBM Watson sharpens its cognitive skills: New APIs help make it more ‘human’

    As part of this announcement, IBM also said it will expand the company’s presence in Silicon Valley and the greater Bay Area with a new Watson Hub, South of Market in San Francisco. IBM believes it will put them closer to, and increase collaboration with, the local start ups, developers, venture capital groups, established businesses and academic experts the company is currently working with to take cognitive computing into new markets. The location will also serve as the new global headquarters for IBM Commerce, a high-growth industry opportunity for IBM and Watson. The facility is scheduled to open in early 2016.

    http://www.firstpost.com/business/ibm-watson-sharpens-its-cognitive-skills-new-apis-help-make-it-more-human-2445566.html

  • Watson to become a huge sales engine…

    http://www.bloomberg.com/news/videos/2015-09-24/ibm-s-watson-said-to-become-huge-engine-for-sales
  • Massachusetts gives IBM a $2.5M tax break for absolutely no reason whatsoever

    IBM has promised to create 500 new jobs in exchange for its tax break. If they don’t, there will be hell to pay … or at least they’ll have to give back some of the $2.5 million.

    http://www.networkworld.com/article/2986116/big-data-business-intelligence/massachusetts-gives-ibm-a-2-5m-tax-break-for-absolutely-no-reason-whatsoever.html

  • IBM boosts security of bring your own cloud apps

    The technology helps a company discover the cloud-based apps its employees are using on their computers and mobile devices and then helps roll out a safer way of using them, without impacting productivity. Hosted on IBM Cloud, the solution scans a company’s network to find the apps being used, which are then analysed using deep threat analytics from IBM X-Force.

    http://www.cloudpro.co.uk/it-infrastructure/security/5376/ibm-boosts-security-of-bring-your-own-cloud-apps

EMC

  • Cloud takes a bite out of backup boss EMC’s top line in Q2

    The storage titan saw its quarterly sales drop 16.9 per cent annually to $414.4m, and its share of the market came in more than six points lower than in the corresponding period last year. Second-placed Symantec – whose $104.5m revenue accounted for 14.4 per cent of the worldwide total – endured a decline of a comparatively modest 3.7 per cent

    They added:

    “Focus continues to shift away from hardware-centric, on-premise PBBA systems to hybrid/gateway systems,” she said. “The results [of this] are greater emphasis on backup and deduplication software, the ability to tier or push data to the cloud, and the increasing commoditisation of hardware, all of which require market participants to adjust product portfolios accordingly.”

    http://www.channelnomics.eu/channelnomics-eu/news/2426707/cloud-takes-a-bite-out-of-backup-boss-emcs-top-line-in-q2

Hewlett Packard

Other

Supplier Report: 9/19/2015

sn_oldtv_Pablo GarciaSaldaña

The news this week seem to be reacting to HP’s announcement that they are cutting 33,000 jobs over 3 years.  Journalists are looking at HP, IBM, and EMC and re-stating the now-familiar critique of “these companies are bloated and not nimble”.

Are the critics right?  Time will tell.  Today, three companies are trying to transform and become more responsive to the market.  IBM is focused on the emerging internet of things and supporting that entire eco-system of devices.  HP is trying to slim down and become more reactive (with an offshore consulting team).  EMC has been struggling with their own potential reorganization.

Can companies that have enough employees to fill a mid-sized American city find a way to compete with companies that can support 900 million users with 60 employees? And are the sales models that those large companies rely upon still relevant in the age of open source software and ad-driven profits?

IBM

  • IBM working on blockchain technology

    Krishna told the publication house that “they are modifying the original bitcoin ideas to build a blockchain that operates without currency, ensures that contract details remain private and makes it easier for companies to embed business rules into their smart contracts”.

    http://www.econotimes.com/IBM-working-on-blockchain-technology-91011
    What is blockchain?

    The blockchain is seen as the main technological innovation of Bitcoin, since it stands as proof of all the transactions on the network. A block is the ‘current’ part of a blockchain which records some or all of the recent transactions, and once completed goes into the blockchain as permanent database.

  • HCL, IBM team up to jointly develop IoT solutions

    As part of the partnership, HCL and IBM will combine their technical knowhow and manpower to enable seamless integration of device, connectivity, data platform and analytics for organisations to address some of the most complex enterprise and industrial IoT challenges.

    http://www.firstpost.com/business/hcl-ibm-team-up-to-jointly-develop-iot-solutions-2438274.html
    Additionally, IBM opens IoT & Big Data units, appoints Harriet Green as GM

    Harriet Green, now VP and GM at IBM said: “The Internet of Things will help enterprises and governments at every level unlock entirely new areas of opportunity and growth, and no company is better positioned than IBM to be the partner of choice as these organizations embrace its potential.

    http://www.cbronline.com/news/verticals/the-boardroom/ibm-opens-iot-big-data-units-appoints-harriet-green-as-gm-4670303

  • Leadership Depends on Clarity and Agility: IBM’s CIO

    “As [organizations] get bigger, we tend to isolate roles so people’s skills get too segmented,” Smith said. “We’re working to give people broader roles where people are expected to do role rotations and gain skills that enable them to get better and hone their craft. We have a concept that we’re going to take large teams and keep breaking them down so we know the purpose of each team.”

    http://daily.financialexecutives.org/leadership-depends-on-clarity-and-agility-ibms-cio/

Hewlett Packard

  • HP’s Job Cuts Reflect EDS Legacy
    HP announced 33,000 job cuts over three years this week…

    Most from the technology services group it had built from Electronic Data Systems Corp., a $13.9 billion acquisition. The job cuts are H-P’s way of creating a more nimble business that can better match customer needs for help with cloud-based computing, or off-loading computing and software to the Internet. It is also a recognition of how badly H-P miscalculated developments in the information technology services market.

    http://www.wsj.com/articles/h-ps-job-cuts-reflect-eds-legacy-1442447023

  • Hewlett-Packard Company Plans offshoring 60% of Enterprise Service

    In fact, Enterprise Services division is not an organic segment of the larger HP group. In 2008 HP acquired the H. Ross Perot founded Electronic Data Systems for $13.9 billion. At that time, HP’s CEO, Mark Hurd was intent on pushing HP towards enterprise IT services. IBM had by then a sizeable market share in this segment due to some strategic acquisitions such as PriceWaterhouseCooper’s for $3.5 billion in 2002. Hurd in 2008 wanted HPQ to acquire a big-revenue earner in enterprise-level IT services segment. The result was the expensive purchase of EDS.

    http://www.wallstreetscope.com/hewlett-packard-company-nysehpq-plans-offshoring-60-of-enterprise-service/25429003/

  • HP Plans To Keep The Struggling Enterprise Services Unit Contrary To Common Belief

    According to Whitman, Enterprise Services is essential to the success of the greater HPE as it starts a life of its own, separate from the parent. For example, she envisions a situation where companies will be hiring HPE’s consultants to help with their cloud implementations, digitization of paper processes and so on. Such consulting works perfectly fit in the domain of Enterprise Service, and that explains why Whitman believes the unit is essential to the overall success of HPE.

    http://investcorrectly.com/20150917/hewlett-packard-company-nysehpq-plans-keep-struggling-enterprise-services-unit-contrary-common-belief/

  • HP Has Enough Workers to Fill a City—And It Needs Them All

    The HPs and IBMs of the world have responded to these shifts by offering cloud services and ready-made business applications of their own. That’s a big part of why HP and IBM are shedding jobs right now. “In general software companies are better for owners than services businesses are,” Burris explains. “In a software business, a programmer can write a piece of code that can be used by millions of different customers and users. That intellectual property, that information about a problem, is now made available to a whole pile of people at the same time.”

    http://www.wired.com/2015/09/hp-enough-workers-fill-cityand-needs/

Other

  • Age-old question: Can commercial software succeed in an open-source world?

    Now, Salesforce chief executive Marc Benioff’s dream of taking on not just Oracle but SAP in other enterprise software categories puts it at risk, according to the story. That may be why Salesforce is building up its skills in PostgreSQL, an open-source database favored by many companies that are increasingly wary of relying on pricey databases from Oracle, SAP, and even Microsoft.

    http://fortune.com/2015/09/18/open-source-software-threat/
    Additionally:

    As one data point, note that Red Hat, which sells support and service for Linux, is arguably the most successful company built on open-source. It became the first $1 billion open source company three years ago and closed its last fiscal year in February at almost $1.8 billion in revenue. That is not chump change, but it’s a far cry from the run rates proprietary software companies tout. Here’s guessing that the new normal for software companies in the open-source era will look a lot more like Red Hat and a lot less like Oracle, SAP, and Microsoft. And that has to be a sobering thought.

  • Can GE buy IBM or EMC?

    GE could easily sell those parts of IBM it didn’t want, or spin them off into a new company, and get back most of the cash needed to do this deal. By installing new management and focusing on the Internet of Things, GE would give IBM a new story to tell and, in the process, dramatically increase its value to investors. Buying IBM would also cement Immelt’s own industrial strategy into place, making it nearly impossible for a successor to do to his company what he did to Jack Welch’s outfit.

    http://seekingalpha.com/article/3510876-ge-could-buy-ibm

  • Key Takeaways from the Wells Fargo Healthcare Conference: Johnson and Johnson

    “Five years ago, our pharmaceutical division at that time was about $24 billion in annual sales, and we lost $8.5 billion to patent expiry, literally over about a 18 month to 24 month period, and you know the margins in that business, you know the challenges that something like that presents. And we made a real decision not to go out and do a major acquisition, which I think would be a challenge to demonstrate value creation for many, if not most of those…We continue to invest in R&D. We’ve got much more focus in our therapeutic categories. And today, literally, five, six years later, we launch 14 compounds, seven of which have been $1 billion brand and things are really making a difference and things like prostate cancer, thrombosis, Type 2 diabetes, range of conditions, and there’s no way we could have done that, if it was an only a pharma business, because it wouldn’t have survived. We had a strong MD&E and strong consumer business. So financially, we think it’s important.”

    http://seekingalpha.com/article/3508116-johnson-and-johnson-3-key-takeaways-from-the-wells-fargo-healthcare-conference

Photo: Pablo GarciaSaldaña