tbr datacenter webinar - april 2014
DESCRIPTION
Server, storage and networking vendors face significant disruption. In the face of data center disruptors such as public cloud and software-defined technologies, hardware vendors must rapidly formulate their survival strategies to capture opportunities stemming from new IT buyers. As the influence of IT spreads across the enterprise, data center hardware vendors are cultivating solution sets that target new purchase influencers outside the IT department. End-to-end solutions capabilities and outcome-focused conversations with customers are increasingly required to close sales, driving hardware vendors to adapt their portfolios and their sales and M&A strategies to accommodate increasingly demanding expectations from new line-of-business customers. The TBR Data Center research team invites you to a webinar on Tuesday, April 29, 2014, for a recap and analysis of vendor performance reported in TBR’s Data Center Benchmark. Content Manager Christian Perry will share his perspective on the latest 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. Questions for discussion will include: 1. How are hardware vendors adapting their portfolios to accommodate specific solution sets required by line-of-business buyers? 2. What are the greatest opportunities for vendors selling from LOB-led, solution-set perspectives? How does this vary by line of business and region? 3. How is the integration of line-of-business executives into the IT purchasing conversation transforming hardware portfolios? How is it impacting vendors’ go-to-market approaches?TRANSCRIPT
TBR
T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
TBR’s Computing Business QuarterlySM
Research Highlights and Outlook Technology Business Research (TBR) Quarterly Webinar Series
April 29, 2014
TBR
2 TBR Quarterly Webinar Series | 4.29.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
Christian Perry, Content Manager, Data Center
Email: [email protected]
Twitter: @ITwriter
Computing Business Quarterly Research Highlights and 2014 Outlook: Webinar Presenters
Coverage and focus areas:
• Data center ecosystems
• Servers: x86, proprietary (UNIX/mainframe), microservers
• Storage: SAN, NAS, flash, object
• Converged infrastructure and integrated systems
• Private and hybrid cloud
• High-performance computing and hyperscale
Krista Macomber, Analyst, Data Center
Email: [email protected]
Twitter: @klmacomber
TBR
3 TBR Quarterly Webinar Series | 4.29.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
• Data Center Landscape Overview
o An evolving buyer ecosystem is changing
the vendor landscape.
• Data Center Benchmark
o Data center hardware vendors leverage
technology and channel partnerships to
maximize line-of-business (LOB)
opportunities.
o System profitability is declining as cloud
continues to affect data centers.
o Traditional business models will shift as
customer purchasing and usage
behaviors change.
CBQ 4Q13 Research Highlights and Outlook: Agenda
TBR Data Center
Benchmark
Vendors:
Brocade
Bull
Cisco
Dell
EMC
Fujitsu
HDS
HP
Huawei
IBM
Juniper
Lenovo
NEC
NetApp
Oracle
Quantum
Unisys
Data center customers are changing their consumption habits as hardware technologies evolve
TBR
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Data Center Trends
• Software-defined
• Application-centric
• Scalable
• Modular
• Fluid operational structure
• Productive, global workforce
• Rapid new insights
GR
AP
HIC
SO
UR
CE:
TB
R A
ND
TA
NG
ERIN
EDIG
ITA
L.C
OM
• New growth opportunities
• Increased profitability
Data center vendors use LOB solutions to address emerging customer requirements
TBR
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Data Center Trends
LOB solutions enable server, storage and networking OEMs to establish strategic relationships with new buyers
Vendors
CIO CTO IT Mgr.
Traditional Buyers
CMO CFO COO
New Buyers
IT as an enabler of
business outcomes
Hardware quality,
reliability, performance
LOB
Solutions
Point
Products
History of
Innovation CoEs
Joint ventures
Industry presence
TBR
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Data Center Trends
Partners grow in importance to OEM solution
development and sales
OEM technology
OEM direct sales
Partner technology
Channel
GRAPHIC SOURCE: TBR AND IMGARCADE.COM
As OEMs build increasingly complex solution sets to enable desired business outcomes for IT, the data center landscape shifts toward a model of increased reliance on partners for differentiation, which spurs “co-opetition,” and high channel leverage.
Data center hardware vendors use strong technology and channel partnerships to develop and maximize routes to market for LOB solutions
TBR
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CBQ 4Q13 Research Highlights and 2014 Outlook: The Data Center Landscape
• Data center revenue for the vendors tracked in TBR’s Data Center Benchmark, including servers, storage and networking, declined 4.8% year-to-year.
• Data center gross margin of 42.1% declined 320 basis points year-to-year, with all product segments posting triple-digit basis point declines.
Revenue (in $ thousands) Gross Profit (in $ thousands)
System profitability continues to decline as cloud and software-defined functionality drive hardware commoditization
TBR
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Acquiring IBM’s x86 server business will establish Lenovo as a formidable competitor in the x86 server marketplace.
CBQ 4Q13 Research Highlights and 2014 Outlook: x86 Server
x86 Server Vendor Trends for 2014
As IT shifts from a cost center to an enabler of better business outcomes, the value of data center solutions shifts to services and software that run on commodity hardware.
Customer priorities around software and services, and the subsequent poor performance of the System x product line, led IBM to agree to sell its x86 business to Lenovo.
Tier 1 OEMs Dell, HP and Lenovo (IBM) will compete on price and workload-specific efficiencies to drive sales of x86 servers
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CBQ 4Q13 Research Highlights and 2014 Outlook: x86 Server
Note: Revenue base includes only the vendors in the above graph.
Newer entrants to the x86 server market are growing scale by expanding solutions capabilities to target small to midsize enterprises, as Tier 1 vendors invest in the channel and architecture that supports mission-critical workloads to spark demand
Expanding solutions capabilities and channel presence helped x86 server vendors achieve year-to-year revenue growth in 4Q13
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IBM is leveraging its Power architecture to drive migration of mission-critical, data-intensive workloads to cloud environments.
CBQ 4Q13 Research Highlights and 2014 Outlook: Proprietary Server
Oracle cited triple-digit growth to SPARC SuperCluster revenue. Oracle’s engineered systems now represent almost one-third of Oracle’s hardware product sales.
Proprietary Server Vendor Trends for 2014
Proprietary server vendors ranging from Bull to Oracle are driving toward an end-to-end integrated approach, from hardware through software, to target pockets of demand in a commoditized server marketplace.
Proprietary hardware vendors build targeted solution sets and enable new delivery models to generate cloud- and big-data-focused opportunities
TBR
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CBQ 4Q13 Research Highlights and 2014 Outlook: Proprietary Server
IBM, Oracle and Fujitsu work to find their footing and stem heavy revenue losses in a declining and rapidly changing proprietary server marketplace
Chipset innovation, software investments and refined market messaging enable proprietary server vendors to target pockets of demand
Note: Revenue base includes only the vendors in the above graph.
TBR
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In addition to adapting their portfolios to enable software-defined storage, storage OEMs are partnering with service providers to increase average deal size.
CBQ 4Q13 Research Highlights and 2014 Outlook: Storage
Storage Vendor Trends for 2014
The steady maturation of software-defined storage is spurring new competitive dynamics in the storage marketplace.
NetApp typically leads customer conversations with the value of ONTAP and its other software assets, and also updated its core FAS array architecture to specifically take advantage of capabilities such as clustering in ONTAP.
Software-defined storage is a strategic entry point to private and hybrid clouds and high-value customer relationships for OEMs
TBR
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CBQ 4Q13 Research Highlights and 2014 Outlook: Storage
4Q13 financial performance indicates that mapping storage solutions back to customer pain points succinctly, as a means to bridge the gap between IT and new LOB buyers, is key to closing sales
Note: Revenue base includes only the vendors in the above graph.
EMC
HDS
HP
Fujitsu
Huawei
IBM
NEC
NetApp
Oracle
DellBull
Quantum
Lenovo
20%
30%
40%
50%
60%
-25% -15% -5% 5% 15% 25% 35% 45% 55% 65% 75% 85% 95% 105% 115% 125%
Sto
rage
Gro
ss M
argi
n
Storage Revenue Year-to-Year Change
4Q13 STORAGE REVENUE GROWTH VS. STORAGE GROSS MARGIN TBR
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.SOURCE: TBR ESTIMATES AND COMPANY DATA
Investments in flash, software-defined storage and solutions bundling help storage vendors sell to new LOB-focused buyers
TBR
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Partners augment OEMs’ internal capabilities and market reach in the network security space.
CBQ 4Q13 Research Highlights and 2014 Outlook: Data Center Networking
Data Center Networking Trends for 2014
Security will be an important growth driver for networking OEMs in 2014, as large-scale breaches such as at Target Corp. in late 2013 underscore the importance of a secure network.
Vendors invested across 2013 and 1Q14 to expand their security capabilities and set the stage for expansion in the marketplace.
Networking vendors are targeting expansion in the security space to increase profitability and customer loyalty
TBR
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CBQ 4Q13 Research Highlights and 2014 Outlook: Data Center Networking
Networking hardware revenue performance declined in 4Q13, indicating rising commoditization and software-led functionality
Financial performance in 4Q13 underscores that networking vendors must align portfolios and messaging to highlight software functionality
Note: Revenue base includes only the vendors in the above graph.
Cisco
HPHuawei
NEC Oracle
Dell
Brocade
Juniper
25%
50%
75%
-15% -10% -5% 0% 5% 10% 15% 20%
Net
wo
rkin
g G
ross
Mar
gin
Networking Revenue Year-to-Year Change
4Q13 NETWORKING REVENUE GROWTH VS. NETWORKING GROSS MARGIN TBR
NOTE: SPHERE SIZE REFLECTS VOLUME OF REVENUE.SOURCE: TBR ESTIMATES AND COMPANY DATA
TBR
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How are OEMs leveraging LOB solution sets as powerful
tools, from portfolio and go-to-market perspectives, to
help customers achieve their desired business
outcomes?
Quarterly Topics
How are OEMs leveraging technology partnerships to
round out their solution stacks? How are vendors enabling
channel partners to sell key solutions and expand their
market reach?
CBQ 4Q13 Research Highlights and Outlook: Next Quarter Syndicated Topics
Data center ecosystems are morphing into workload-defined shapes that dictate customer purchasing and deployment decisions
How are OEMs targeting opportunities for on-premises
hardware sales, such as in the converged infrastructure
space? How does this impact system architecture and
market messaging?
TBR
17 TBR Quarterly Webinar Series | 4.29.14 | www.tbri.com | ©2014 Technology Business Research, Inc.
Christian Perry Content Manager, Data Center Email: [email protected] Twitter: @ITwriter
Krista Macomber Analyst, Data Center Email: [email protected] Twitter: @klmacomber
James McIlroy Vice President of Sales Email: [email protected] Telephone: 603.929.1166
Twitter: @TBRinc SlideShare: www.slideshare.net/TBR_Market_Insight YouTube: www.youtube.com/user/TBRIChannel LinkedIn: www.linkedin.com/company/technology-business-research
CBQ 4Q13 Research Highlights and Outlook: Q & A
TBR 4Q13 Syndicated Research Topics | Confidential and Proprietary
TBR
©2014 Technology Business Research Inc.
Computing Practice Syndicated Research Coverage
Device Benchmark Vendors (Benchmark XLS data is also available)
Data Center Benchmark Vendors (Benchmark XLS data is also available)
Computing Vendor Coverage
• Acer* • Apple • Asus* • 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
• Acer* • Apple • Asus* • Dell • EMC • Fujitsu • HP • IBM • Intel • Lenovo • NetApp • Samsung* • Sony • Toshiba
Corporate IT Buying Behavior & Customer Satisfaction Studies
• Apple Enterprise PCs* • Cisco UCS* • Desktops
• Notebooks • Services & Support • x86-Based Servers
TBR Computing Practice Syndicated Coverage
18
*Semiannual publication
TBR
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Thank you, and see you next quarter!
www.tbri.com
@TBRinc
TBR
T EC H N O LO G Y B U S I N ES S R ES EAR C H , I N C .
About TBR
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.
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.
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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.