Tag Archives: hpe

Apple Supplier Broadcom, Tech Giant Cisco Pitted In Data Center War

Tech giant Cisco Systems ‘ ( CSCO ) 16-nanometer data center semiconductor could slug Apple ( AAPL ) supplier Broadcom ( AVGO ), which is ramping its 28-nm Tomahawk technology, an RBC analyst said Monday. Broadcom’s Tomahawk will go for $600-$700 per chip, replacing the outmoded Trident chip that costs less than $500, on average. Unlike Trident, however, Tomahawk won’t win across-the-board vs. Cisco, RBC’s Amit Daryanani wrote. Cisco recently unveiled its CloudScale application-specific integrated circuit (ASIC), in direct competition with data center chipmakers Broadcom, Cavium ( CAVM ), Intel ( INTC ), Marvell Technology Group ( MRVL ) and Mellanox Technologies ( MLNX ). In the past, Broadcom’s Trident won “across the board” at Cisco. This time, Cisco is likely to use its own CloudScale ASIC in its Nexus 9000, 9200 and 9300 platforms, leaving the 9500 to hold the Tomahawk silicon, Daryanani said. Other users include Hewlett-Packard Enterprise ( HPE ), Arista Networks ( ANET ) and Juniper Networks ( JNPR ), which had a two-year head start to begin ramping Tomahawk-based solution, Daryanani wrote. He sees a five- to six-year lifespan for the product. Still, “we believe Cisco encroachment into the merchant silicon market needs to be monitored by Broadcom investors,” he wrote. “For now, we continue to believe Broadcom’s solutions are the market-leaders for cloud/data center spenders.” Daryanani maintained his 180 price target and top performer rating on Broadcom stock. Shares rose a fraction Monday, to 152.89, on a day when Apple released new products that didn’t represent huge advances and were expected. Cisco stock fell a fraction on Wall Street Monday, while Apple was flat.

Apple-Alphabet Cloud Accord Could Help Google Catch Up With Amazon

Google-owner Alphabet ( GOOGL ) has snared iPhone maker Apple ( AAPL ) as a customer for its Google Cloud Platform, a deal that could help Google’s service catch up with industry leader Amazon.com ( AMZN ), says an industry note from Pacific Crest Securities on Thursday. Amazon unit Amazon Web Services (AWS) is now the biggest provider of infrastructure as a service (IaaS), where customers rent computer servers and data storage systems via the Internet. Microsoft ( MSFT ) and Alphabet’s Google rank next. Apple signed a contract worth between $400 million and $600 million to use Google’s Cloud Platform, according to CRN . Apple now uses cloud services from Amazon and Microsoft, but intends to end its reliance on all its rivals in the next few years, as it builds its own data centers, according to Re/Code. While Apple has reportedly used AWS historically for iCloud, “the more surprising shift is from Apple to Google, which are odd bedfellows given the two companies’ mudslinging and competition in other areas,” wrote Pacific Crest Securities analyst Evan Wilson. “Did Google throw in free cloud as a way to renegotiate the search contract? Definitely adds to the perception of Google’s momentum,” Wilson added. The deal has not been confirmed by Google or Apple, but Apple did disclose its reliance on AWS and on Microsoft’s Azure in a 2014 white paper. The alleged Apple-Google accord would help “Google Cloud Platform catch up to Amazon and Microsoft — at least in terms of perception — as a real third player in the space instead of a distant third. Google has done similar deals with Snapchat, PricewaterhouseCoopers, General Mills ( GIS ) Coca-Cola ( KO ), HTC and Best Buy ( BBY ),” said Wilson. In total, the cloud opportunity is big enough for all three Internet powerhouses, said Wilson, who estimated “a potential $25 billion windfall opportunity in cloud services for Amazon, Microsoft and Google, collectively.” While AWS has been the biggest IaaS price-cutter of the last decade, Google Cloud Platform (GCP) has been aggressive since moving into the market. Google slashed prices in March 2014, October 2014 and May-June 2015, Goldman analyst Heather Bellini said in an industry report last month. Goldman Sachs says that the top three service providers are gaining share as Verizon Communications ( VZ ),   Hewlett Packard Enterprise ( HPE ) and others exit the public IaaS market and focus on private clouds. Goldman Sachs estimates that AWS’ revenue will hit $12.5 billion in 2016, up from $7.88 billion last year. Apple stock was down a fraction in midday trading in the stock market today , near 106. Alphabet was up a fraction, near 760, while Microsoft stock was also up a fraction, near 55. IBD 50 stock Alphabet gets a best-possible Composite Rating of 99 from IBD. Microsoft has a 75 and Apple a 70. Image provided by Shutterstock .

What Now? ServiceNow Confirms BMC Deal Pending; SAP, CRM Rise

Enterprise software developer ServiceNow ( NOW ) advised the Securities and Exchange Commission Wednesday that a federal court in Texas has granted a 30-day stay of all deadlines — notably this Friday’s deadline to start trial — in its defense against patent-violation claim s by BMC Software. ServiceNow and BMC requested the stay “so that the parties may document the agreement and submit appropriate dismissal papers,” ServiceNow said in an 8K filing with the SEC. What now? ServiceNow stock was down 1%, below 60, in early afternoon trade in the stock market today , after rising 3.6% Tuesday as word spread that a legal settlement was in the works. ServiceNow stock still is up for the week and could notch its fourth consecutive week of gains, after shares hit a 22-month low in early February. Shares are still 34% off a record high of 91.28 set Dec. 4. ServiceNow went public in June 2012, priced at 18. More-established rivals Salesforce.com ( CRM ) and SAP ( SAP ) were making their own moves. SAP, the largest in IBD’s Computer Software-Enterprise industry group by market cap, was up a fraction, near 77, Wednesday afternoon, just 5% off a nearly two-year high of 81.21 set Dec. 29. No. 2 player Salesforce.com was up 1.5%, near 71, 14% off a record high of 82.90 set Nov. 19. With a market cap of $9.6 billion, a tenth the size of SAP, ServiceNow is the fifth-largest member of the industry group. Evercore ISI analyst Kirk Materne, in a research note Wednesday, said that the dispute with BMC is “more of a short-term concern … than a wall of worry related to a possible penalty or injunction. “Nevertheless, we believe the (pending) settlement between the two companies does remove a near-term overhang and should allow investors to refocus attention on the longer-term opportunity,” he wrote. “We do not believe that the trial with BMC was impacting sales cycles. … We continue to like the risk/reward longer-term, but as we noted after meeting with the company in early February, NOW is likely to remain in ‘show me’ mode until it reports” its Q1 results. ServiceNow stock crashed 16% on Jan. 28 after the company reported Q4 billings below expectations, though EPS ex items jumped 533% to 19 cents, twice analysts’ expectations, and revenue rose 44% to $285.6 million, also topping Wall Street views. Materne maintained a buy rating on ServiceNow stock, with an 83 price target. Hewlett Packard Enterprise ( HPE ) also has patent infringement claims pending against ServiceNow, filed originally by the former Hewlett-Packard company.