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IBM Joining Amazon, Microsoft, Google In Cloud’s Top 4, Says UBS

Make room for IBM ( IBM ) as well as the usual suspects — Amazon Web Services, Microsoft ( MSFT ) and Alphabet’s Google —  in the cloud computing market hierarchy, UBS says in a research report. While AWS, part of Amazon.com ( AMZN ), and Google ( GOOGL ) are strongest in infrastructure-as-a-service (IaaS), Microsoft’s Azure service and IBM are formidable in platform-as-a-service (PaaS), according to the UBS survey of corporate information technology executives. In the IaaS market, customers rent computers and data storage via the Internet. In PaaS, companies sell applications and software, including business management and database services, that run on cloud infrastructure. “Cloud is not a winner-take-all market,” said UBS. “We believe the ‘big will get bigger,’ … AWS, Microsoft, and Google are going to be winners, with IBM holding its own. “The likely losers, based on UBS estimates of revenue exposure, include Rackspace ( RAX ), Nimble ( NMBL ), Pure Storage ( PSTG ), Brocade ( BRCD ), Hewlett Packard Enterprise ( HPE ), and NetApp ( NTAP ).” Rackspace, which is set to report Q1 earnings after the close Monday, is transitioning to a services model, providing support for AWS and Azure. IBM acquired IaaS provider Softlayer in 2013. To be stronger in PaaS, IBM has layered software on Softlayer’s infrastructure and made other cloud acquisitions, says UBS. One surprise in the UBS survey is that IT executives expect pricing for cloud computing to moderate. Some analysts predict Google will be more aggressive in cutting prices.

Zendesk Investor Day: How To Hit $1Bil Rev. Vs. Salesforce, Oracle

Zendesk ( ZEN ) is expected to elaborate on plans to compete with bigger rivals Salesforce.com ( CRM ) and Oracle ( ORCL ) when the provider of customer-support software holds its investor day on Tuesday. Zendesk in November expanded a partnership with Microsoft ( MSFT ), whose Office 365 is the most widely used cloud app by businesses. Providing support for Microsoft’s cloud platforms could help Zendesk vs. Salesforce.com and Oracle, analysts say. Oracle acquired RightNow in 2011 to boost its efforts in customer-support software. Zendesk, which aims to sell more to larger companies and enterprises, as well as to its longtime base of smaller and midsize businesses, also competes with Freshdesk and Desk.com. Research firm Gartner estimates that 80% of Zendesk’s customer base has 20 users or less. With $209 million in 2015 revenue, Zendesk has touted a $1 billion target by 2020. “We expect much investor interest around the trajectory of Zendesk’s path toward their $1B revenue goal in 2020,” wrote Stan Zlotsky, a Morgan Stanley analyst, in a research report out Monday. “With the unveiling of the new CFO, Elena Gomez, we think investors will be looking to better understand her thinking around the $1B target and any potential upside/downside risks. “Given the renewed market focus on profitability, in addition to growth, we believe an update on the company’s plans for cash generation and reaching positive operating margins would be very helpful in framing investors’ expectations.” Zendesk stock jumped last week after the enterprise software company reported a smaller-than-expected Q1 loss and raised its full-year 2016 revenue guidance, breaking out of a cup-with-handle base at a 23.87 buy point. Zendesk stock was up more than 1% in early afternoon trading in the stock market today , near 23.75. Zendesk, with its shares up less than 3% in the past 12 months, has a so-so IBD Composite Rating of 64 out of a possible 99.

Will These 3 Hot Chinese Techs Follow Alibaba Or JD With Earnings?

Alibaba rival JD.com ( JD ) was crumbling to a three-month low Monday after reporting light Q2 revenue guidance. Meanwhile, Alibaba ( BABA ) edged higher Monday intraday after jumping 4% last week on its earnings report, with the Chinese e-commerce giant now setting its sights on $1 trillion in gross merchandise volume in four years. Chinese stocks in general were getting hit hard in the stock market today amid a broad sell-off in Shanghai. JD shares were gapping down  9.7% in giant volume, hitting their lowest level since mid-February. The stock is now trading about 40% below its high reached last June. IBD Take: How to JD.com, Weibo and other Chinese Internet giants stack up? Find out at IBD Stock Checkup Alibaba is trading about 16% below its 52-week high. The stock was able to find support at its 50-day line ahead of its report and is now trading just under a 79.94 buy point within a larger pattern. Fellow Chinese tech stocks NetEase ( NTES ), Sina ( SINA ) and Weibo ( WB ) are all due to issue their quarterly reports after the close on Wednesday. Gaming company NetEase is expected to see earnings rise 56% in local currency, with revenue jumping 118%. NetEase is hitting resistance at its 50-day line. Shares are about 25% below their late December high, down about 1% in intraday trade. Internet portal Sina is expected to swing to a loss of 4 cents a share, while revenue edges up 2%. Shares are dropping back below buy range from a cup-with-handle base in intraday trade, losing 4.4%. The stock is about 20% below its June high. And social platform Weibo is projected to see earnings grow 300% to 4 cents a share, while revenue jumps 18%. Weibo was a part of Sina before its IPO in 2014. Sina remains a majority shareholder, while Alibaba owns a 30% stake. The stock was trading past the 20% profit-taking zone after breaking out of a cup-with-handle base a month ago. Shares are now extended about 13% from the buy point, dropping 5% Monday.