Moor Insights & Strategy Two week update ending August 19, 2022

I hope you all had a great couple of weeks. 

This week, Steve will be attending Hot Chips. I will be attending an advisory day in Seattle and Zoom’s analyst day in San Jose. Next week, Matt, Steve, and Will will be in San Francisco for VMware Explore. I will remotely attend Explore and physically attend a two-day event in Austin.

Over the last two weeks, our MI&S team published 31 deliverables: 

The press quoted us with 11 citations. Journalists wanted to hear about AI, AMD, Binance, Discover, D-Wave, Fintech, Intel, LinkNYC, Samsung, and Ventana. 

Last week’s MIS Quick Insights:

A.I./Machine Learning (Paul Smith-Goodson)

  • NVIDIA’s Grace CPU Superchip was announced at an earlier GTC 2022. NVIDIA has released more information. It consists of two Grace CPUs connected with a high-speed NVLink interconnect. That configuration amounts to a 144-core with 1 TB/sec memory bandwidth and an on-chip cache of 396 MB. NVIDIA says this is the fastest processor for AI and HPC workloads. No date has been given by NVIDIA when it will be widely available.
  • Boston Dynamics has had several owners in a short time. Hyundai bought the company in 2020 and announced this week that it would build a $400 million AI robotics institute to advance AI and robotics using Boston Dynamics. The goal is to create future generations of advanced robots and intelligent machines that are smarter, more agile, perceptive, and safer than anything that exists today. It sounds like a partnership with Elon Musk, and his android project would be a good match.

AR/VR (Anshel Sag)

  • Logitech’s Chorus $100 accessory for the Quest 2 from Meta adds Valve Index-like speakers to the Quest 2 headset. This will help people enjoy their Quest 2 headsets better, especially for apps like Beat Saber or Supernatural, where audio quality is crucial to immersion, and wearing headphones over the headset isn’t ideal. 
  • VR surgery app FundamentalVR has raised $20 million, indicating that the many different training applications of VR continue to get funding as training continues to be a leading application for enterprise VR apps.
  • Valve’s Steam Hardware Survey shows Meta’s market share of VR headsets on Steam is over 67% and indicates that Meta’s $299 price helped the company capture not only a significant amount of the mobile VR market but also the PC VR market, which it previously only held with the Rift.
  • Xiaomi’s new Smart Glasses are pretty clunky. They feature a single MicroOLED display, a 50MP primary camera, and an 8MP periscope camera, which makes it almost sound like it’s trying to compete with something like RealWear’s Navigator 500, but without any of the enterprise experience.
  • Mark Zuckerberg got a lot of flak for posting from within Horizon Worlds with a fairly low-quality avatar and environment. Many people criticized him for having a platform that didn’t compete with many existing platforms.

Carrier/Wireless 

  • India wrapped an expansive 5G spectrum auction that included low, mid, and high band/ mmWave assets. The following week, one of the biggest winners, Bharti Airtel, stated that it expects half of its 5G service revenue to come from enterprise private cellular networks by 2024. Absent are plans by the Indian government to distribute spectrum directly to enterprises, municipalities, schools, and hospitals, akin to what the OnGo Alliance is facilitating with CBRS spectrum in the United States. I find this odd, given that the U.S. and Europe democratize access to licensed spectrum to spur service innovation and accelerate 5G deployments. Given India is so far behind other parts of the world with 5G, it would behoove the country to reconsider its current telecommunications strategy.             

Datacenter: 

  • Storage- (Steve McDowell) 
    • Every storage vendor talks about data integrity, but high-end storage player Infinidat is putting its money where its mouth is.  The company has introduced its new InfiniSafe Cyber Storage guarantee, promising data recovery in less than a minute. The recovery time is undoubtedly helped by Infinidat’s new performance guarantee, which provides Infinidat customers with service-level agreements aligned with their workload requirements. On top of Infinidat’s already industry-leading latency numbers, this gives storage administrators a strong choice for high-performance, reliable storage.  
  • Networking- (Will Townsend) 
    • Automation is a hot area in enterprise networking, and Gluware has been trying its best to capitalize for years. The company recently hired a new head of sales and marketing, Terry Healey. Still, it will take much more than improving bench strength to be competitive among infrastructure stalwarts Cisco and HPE and a handful of up-and-coming startups like Anuta Networks. Gluware’s claim as the leader in intelligent network automation is a huge stretch given a relatively small number of notable customer wins 
  • Server- (Matt Kimball)   
    • Lenovo had another strong quarter in the data center, recording record revenue for its Solutions & Services Group (SSG) and Infrastructure Services Group (ISG). In all, the 
      • SSG includes professional services and the TruScale consumption-based service, among other contributors. I call out these two key contributors specifically as I see both as critical to establishing a strong enterprise presence. TruScale is important for the strong trend in enterprise IT adopting ready-to-consume “as a Service” offerings that span everything from traditional virtualized infrastructure to the more advanced workloads that require resources enterprise IT is lacking. 
      • This group saw a robust 23% growth, with the company planning to expand its TruScale offerings. 
      • The acquisition of PCCW to form PLTS (PCCW Lenovo Technology Solutions) was key to driving a world-class professional services group. However, Lenovo must be careful in its approach to the market. Loyal channel partners in SE Asia & China (where PLTS is currently focused) cannot be made to feel that Lenovo is “stealing” potentially high-margin consulting business left to move low-margin hardware. Given the discussions we had with Lenovo execs at its latest analyst summit, I believe the team understands this balancing act.
      • Through leveraged partnerships, I would like to see Lenovo make more noise around professional services for the rest of the world. At a time when every IT project is measured by time to value, customers are looking for trusted partners to help identify the straightest path and help with execution. 
      • ISG includes the traditional infrastructure, where record revenues across cloud, server, storage, and edge contributed to the company’s first $2B quarter. 
      • While the company outgrew the market in general, pundits point to lower than hoped for operating income as a cause for concern. I look at this a bit differently. I see Lenovo using aggressive pricing enabled by leveraging its manufacturing capabilities and smart supply chain mgt to drive growth. This will eventually lead to a mix of higher-margin products and services. But the company is moving in the right direction.
    • I’ve been thinking about some news that has long faded from our ADHD raddled brains. Intel and AMD had very different quarters. Some see this as an ominous sign for Intel, somewhat reflective of the dynamics that led AMD to quickly lose its 25% market server market share. Others see this as a temporary blip for Intel as Gelsinger gets his house in order and starts cranking up the Intel execution engine. Here are a few things to think about – 
      • It is believed that AMD has achieved its highest server market share in its history (mentioned by a financial analyst on the earnings call, validated by Lisa Su)
      • The parallels to 2005 are justified in some ways and unjustified in others. EPYC was launched to an Intel that was far too comfortable in driving incrementally better products with price hikes that were not incremental due to a lack of competitive pressure. Similar to 2005. However, when AMD originally launched Opteron – Intel was moving in the right direction with its product line. Its response was quicker and stronger than what would have been for a company caught “flat-footed.”
      • It is clear that AMD truly did catch Intel at its most complacent with the original launch of EPYC. Five years later, the company has yet to regain solid footing
      • During this time, AMD did not suffer on execution (Barcelona), design (Bulldozer), or distractions (SeaMicro, Seattle)
      • Conversely – the company has exceeded on the design and execution front, and its acquisition of Xilinx and Pensando enabled it to drive further differentiation through its portfolio (and drive immediate revenue/margin gains).
      • However, like 2005-2006, I get the sense that AMD has truly leveraged a couple of markets for its growth.  This time, it’s cloud and HPC. During its investors’ call, Lisa mentioned the “slower than anticipated” enterprise adoption of EPYC more than once while simultaneously calling out the cloud as the growth engine. Diversity of markets is key to long-term success, starting with driving a strong transactional business. 
      • Looking at Intel’s quarter, I believe its big decline in margins is impacted by the pricing exercises it has taken to retain customers
      • Finally, unlike in 2005 and 2006, external factors will play a big role.  Arm has established itself as a first-class citizen in the cloud data center. Neither AMD nor Intel can continue to bury its head in the sand and ignore this threat.  And this threat is not just about more cores and lower power consumption, as the x86 players seem to think. It’s about an ecosystem that can quickly design and deploy compute platforms to meet the specific needs of a set of customers.  As much as EDA and other tools and methodologies have shortened silicon design, this lego-like approach with Arm makes it very compelling. 
      • And, oh yeah, did we forget about some GPU company that’s releasing a CPU?
      • The data center is changing. It will no longer be dominated by Intel. Or AMD. The future state is driven by the cloud. It has been to date and will continue to be so. Look for workload, application, use case, and deployment-specific compute platforms consumed by software that doesn’t care. And data center operators and IT professionals who are equally ambivalent to CPU architectures.

FinTech (Melody Brue)

  • N/A

IIoT and IoT (Bill Curtis)

  • The big news this week is the end-of-life announcement for Google IoT Core. These services go dark on August 16, 2023, giving customers a year to migrate. The company says customer needs are better served by partners specializing in IoT applications and services, and this view is correct. There are four big takeaways here. First, the business wasn’t successful – there were very few customer deployments. Second, Google customers learned that business risk increases with distance from mainstream GCP. Third, IoT device service requirements vary significantly from one vertical to another and one business to another, so economies of scale are difficult to achieve – one size does not fit all. Managing healthcare devices, for instance, requires knowledge of the healthcare business and customization of device hardware and software.  Not even Google can be an expert in all IoT verticals. Finally, bundling device management with back-end data services has never made any sense because hyperscalers like Google can easily connect with devices managed by others. There has never been any good reason to bundle the data plane (standards-based device networking) with the control plane (device management.) Native cloud services are moving inexorably to the edge but stopping short of the “wild west” of small IoT devices that are difficult to manage, inherently insecure, highly customized, and require specialized embedded programming techniques. Device management and connectivity will remain complicated and diverse for the foreseeable future.

Personal Computing/ Collaboration (Anshel Sag) 

  • Motorola has launched the new Moto Edge, a $500 device with mmWave capabilities (on Verizon) and PC 1.5 (on T-Mobile), which makes it one of the most advanced wireless capable smartphones in the market and at a very attractive price. This is also the first phone to use MediaTek’s Dimensity 1050
  • Dimensity 1050 has finally landed in the new Moto Edge. This is MediaTek’s first mmWave capable SoC for 5G and will likely be the first of many others in the future. It also helps to bring mmWave to a more affordable price point, as well.
  • The MediaTek T830 is the company’s latest 5G chipset for infrastructure, specifically for 5G FWA and 5G Wi-Fi hotspots. It will be paired with MediaTek’s Wi-Fi 7 products to enable the next generation of 5G connectivity and improve upon the company’s already dominant momentum in 5G CPEs worldwide, especially since 5G FWA continues to double in shipments year on year.
  • MediaTek announced that it has begun testing 5G satellite communications in a lab based on the 3GPP’s Rel.17 NTN standard, indicating that it will likely have this capability down the road, which we’ve seen from its competitors like Qualcomm.
  • The 2.5GHz 5G spectrum auction by the FCC is nearing its end, with roughly $347 million in bids placed in 41 rounds. I expect that T-Mobile will be the biggest bidder of them all since it has the most invested in 2.5 GHz, and I believe that many of these licenses will be in rural areas, which will help narrow the digital divide.

Quantum Computing (Paul Smith-Goodson)

  • Fujitsu announced it will begin selling quantum computers in 2023. It has partnered with Riken to build a 64-qubit superconducting machine. Fujitsu also said that “after March 2027,” it will sell a quantum computer with over 1,000 qubits. How long after March 2027, we don’t know. However, 1000 qubits aren’t out of line with other roadmaps.
  • Everyone remembers the hoopla in 2019 when Google announced it had achieved a big quantum vs. classical milestone called Quantum Supremacy. That meant Google’s quantum computer could do something faster than a classical computer. Google might have to give back its imaginary trophy because a Chinese research group has figured out a way for a classical supercomputer to perform the calculation faster than the Google Sycamore quantum processor. Big deal? Not at this point, I don’t believe. That research energy would have been better spent working on something important, like error correction.
  • Q-CTRL, a provider of quantum control infrastructure software, announced the establishment of a quantum sensing division within the company. New sensing capabilities were demonstrated at the Army Quantum Technology Challenge (QTC) in Adelaide, Australia, held on August 10 and 11. According to Michael Biercuk, CEO, the demonstration of sensing capabilities for the Army was successful. 
    • Q-CTRL will be developing a new generation of ultrasensitive “software-defined” quantum sensors for use in measuring gravity, motion, and magnetic fields. New modes of quantum sensing will be made possible by combining advances in system design using advanced software, AI automation, and signal processing. 
  • This is almost unbelievable – everyone should be familiar with the ongoing NIST-initiated process to solicit, evaluate, and standardize one or more quantum-resistant public-key cryptographic algorithms. The Candidates making it past Round 3 and moving on to Round 4 were announced on July 5, 2022.
    • The shocker is that an algorithm that survived all the previous comprehensive testing and made it to the fourth round was just cracked by a classical processor. The cracked algorithm was Supersingular Isogeny Key Encapsulation (SIKE). I have to question the entire process if it passed three rounds of detection.

Retail Tech (Melody Brue)

  • N/A

Security (Will Townsend)

  • AWS and Splunk recently launched a new open-source project to standardize cybersecurity analytics. Many other companies have joined, such as Cloudflare, Crowdstrike, IBM, Palo Alto Networks, Zscaler, and others. As a result, the Open Cybersecurity Schema Framework (OCSF) was launched at Black Hat Conference 2022. I believe OCSF has the potential to normalize data and make it easier to apply a consistent set of standards across multiple SecOps tools. The latter is needed given that midsize companies use twenty or more security point solutions.            

Space (Paul Smith-Goodson)

  • N/A   

Columns Published (Forbes, eWEEK, UPLOAD VR, and others

  1. Axis Bank – Retaining Customers In A “Two-Click” World, by Patrick Moorhead
  2. Arm Partners With Cruise To Advance Autonomous Driving Support, by Patrick Moorhead
  3. MemryX Is A New AI Company We Actually Need, by Patrick Moorhead
  4. Intel Foundry Services Announces MediaTek As First Wafer Customer, by Patrick Moorhead
  5. Spark New Zealand – From ‘Process ERP’ To ‘Intelligent ERP’, by Patrick Moorhead
  6. Skyworks Delivers Record Q3 Revenue, Beats EPS Consensus, Provides Solid Guidance, by Patrick Moorhead
  7. Samsung Is In A League Of Its Own With Its Z Series Devices, by Patrick Moorhead
  8. An Interview With Retrospec’s CEO Ely Khakshouri About His Electric Journey, by Zane Pickett
  9. The Galaxy S22 Ultra Is Samsung’s Best Phone Ever, But It Won’t Talk About Its Greatest Feature, by Anshel Sag
  10. IBM Research Rolls Out A Comprehensive AI And Platform-Based Edge Research Strategy Anchored By Enterprise Use Cases And Partnerships, by Paul Smith-Goodson

Blogs Published (MI&S)                                                              

  1. Amazon Increased Output In 2021 Orders Of Magnitude More Than Carbon Emissions, by Patrick Moorhead
  2. Micron Proving Its NAND Leadership By Shipping World’s First 232-Layer Device, by Patrick Moorhead
  3. Quantinuum Makes A Significant Quantum Computing Breakthrough By Connecting The Dots Of Its Previous Research, by Paul Smith-Goodson
  4. New Oracle Database Platforms And Services Deliver Outstanding Cloud Benefits, by Steve McDowell
  5. Intel’s Arc A370M Is Great For Creators On-The-Go, by Anshel Sag
  6. Review: HP’s Omen 45L Desktop Is A Refreshing Desktop From A Major OEM, by Anshel Sag
  7. Google Cloud Platform Deploys Arm – Here’s What You Should Know, by Matt Kimball

Research Paper(s):

Podcasts:

The G2 on 5G by Moor Insights & Strategy, with Anshel Sag and Will Townsend

  1. The G2 on 5G Podcast – Mavenir Layoffs, Moto Edge w/Dimensity 1050, MediaTek 5G NTN, Omnispace NTN
  2. The G2 on 5G Podcast – Amazon 5G Robot, CHIPS Act Signed, Airtel 5G SA, Starlink Loses $900M & more

DataCentric Podcast by Moor Insights & Strategywith Matt Kimball and Steve McDowell

  •  N/A

The Six-Five Podcast by Moor Insights & Strategy and Futurum Research, with Patrick Moorhead and Daniel Newman

  1. Replay: Arm’s #CEO Rene Haas on the insatiable need for compute efficiency – driving new opportunities in semiconductors
  2. Replay: Zoho’s Vijay Sundaram on putting customers and their privacy first
  3. Replay: Honeywell’s Sheila Jordan on exploring a revolution in end-to-end processes across the enterprise
  4. Replay: Salesforce’s Mathew Sweezey on what you need to know about the metaverse today and what’s ahead
  5. Ep134: GlobalFoundries Earnings, Luminar, Lenovo, Micron, NVIDIA & Apple’s Supply Chain Risk
  6. Replay: Splunk’s Spiros Xanthos on Role of 011y in Understanding Digital Data
  7. Replay: VMware’s Vittorio Viarengo on the evolution of IT and the cloud
  8. Replay: HP’s Alex Cho on how the hybrid experience is reshaping work
  9. Six Five On the Road at IBM: The CHIPS Act — Why it was Critical, Opportunities, and IBM’s role
  10. Replay: Cisco’s Fran Katsoudas on the evolving role of purpose in business strategy

Moor Insights & Strategy Podcast

1.     Keith Kressin, Pres. & CEO of MemryX, a new low-power AI startup focused on the edge

2.     Speaking with Dave Sipes, CEO, 8×8, about Modernizing Business Communications #XCaaS #UCaaS #CCaaS

Press Citations: 

  1. AI / TheWashingtonPost https://www.washingtonpost.com/technology/2022/08/12/how-to-send-texts-from-your-computer/ (Anshel Sag)
  2. AI / TheWashingtonPost https://www.washingtonpost.com/technology/2022/08/12/how-to-send-texts-from-your-computer/ (Anshel Sag)
  3. AMD, Intel / StockAnalysis https://stockanalysis.com/stocks/amd/ 
  4. Binance, Crypto / Protocol https://www.protocol.com/fintech/binance-labs-yi-he (Melody Brue)
  5. Discover, 5G / DHL.com https://www.dhl.com/discover/en-my/business/productivity/5g-and-logistics (Will Townsend)
  6. D-Wave, quantum / Fastcompany https://www.fastcompany.com/90778231/why-quantum-computing-companies-like-d-wave-are-using-spacs-to-ipo 
  7. Fintech / Protocol https://www.protocol.com/newsletters/protocol-fintech/crypto-crash-deals?rebelltitem=1#rebelltitem1 (Melody Brue)
  8. Intel, GPU / TheRegister https://www.theregister.com/2022/08/09/intel_arc_pro/ (Anshel Sag)
  9. LinkNYC, 5G / LightReading https://www.lightreading.com/digital-divide/linknyc-begins-deploying-5g-kiosks—but-not-yet-with-5g-inside/d/d-id/779518? (Anshel Sag)
  10. Samsung, mobile / AndroidPolice https://www.androidpolice.com/samsung-galaxy-z-flip-4-spotted-in-att-advert/ (Anshel Sag)
  11. Ventana, Chips / EEtimes https://www.eetimes.com/exclusive-ceo-interview-latest-funding-drives-ventanas-first-risc-v-chiplets-in-data-centers/ 

Company:

  • N/A

New Gear or Software We are Using and Testing that is Public Knowledge 

  • HP Dragonfly G3 
  • Valve Steam Deck

Events MI&S Plans on Attending In-Person or Virtually (New) 

  • August
    • Advisory, Seattle, August 22-23 (Patrick Moorhead)
    • Hot Chips, Aug 21-23, virtual (Steve McDowell)
    • Zoom analyst event Aug 24-25, San Jose (Patrick Moorhead)
    • Event, Austin, Aug 29-30 (Patrick Moorhead)
    • VMware Explore, San Francisco, Aug 29-Sept 1 (Matt Kimball, Steve McDowell, Will Townsend)
  • September
    • Arm webinar, Sept 7 (Matt Kimball)
    • CyberSaint Stronger Conference, Sept 13-15 (Matt Kimball)
    • NVIDIA GTC, Sept 19-22 (Anshel Sag, Matt Kimball, Paul Smith-Goodson)
    • Intel Innovation, San Jose, Sept 27-28 (Matt Kimball, Steve McDowell, Pat Moorhead)
    • Quantum Open House Event, Boulder, Sep 28 (Paul Smith-Goodson, Pat Moorhead)
    • SNIA Storage Developer Conference, San Jose, Sept 28-29 (Steve McDowell)
    • SuiteWorld, Las Vegas, Sep 29 (Pat Moorhead)
    • MWC Americas – Las Vegas, September 29-30 (Will Townsend, Pat Moorhead)
  • October
    • Google Cloud Next, NYC, October 11 (Patrick Moorhead)
    • Cloudera event, NYC, October 12 (Patrick Moorhead)
    • Dell Technologies Summit, online, Oct 12 (Matt Kimball)
    • T-Mobile analyst summit, Seattle, October 13-14 (Patrick Moorhead)
    • Oracle Cloud World, Las Vegas, October 16 (Matt Kimball, Patrick Moorhead, Steve McDowell)
    • Open Compute Global Summit, October 18-20 (Matt Kimball, Steve McDowell)
    • 5G Americas Analyst Forum – Dallas, October 19-20 (Anshel Sag, Will Townsend)
    • Austin GP, Austin, October 21-24 (Patrick Moorhead)
    • Lenovo IDG IAC, NYC, October 24-27 (Patrick Moorhead)
  • November
    • Total Telecom Congress – London, November 1-2 (Will Townsend)
    • Supercomputing, Dallas, November 14 (Patrick Moorhead)
    • Qualcomm Tech Summit, Maui, November 15-17 (Patrick Moorhead)
    • AWS re:Invent, Las Vegas, Nov 28-Dec 1 (Patrick Moorhead)
    • 5G Techritory – Riga, November 29-December 1 (Will Townsend)
  • December
    • Event, San Jose, December 5 (Patrick Moorhead)
    • Marvell Analyst Day, Santa Clara, December 7 (Patrick Moorhead)
    • Palo Alto Ignite – Las Vegas, December 12-15 (Will Townsend)
  • January
    • CES 2023, Las Vegas, January 5-7 (Patrick Moorhead)

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The Team 

Analysts, Analysts In-Residence, Contributors

  1. Patrick Moorhead, Founder, CEO, Chief Analyst; Broad technology coverage plus deep insights into Cloud & SaaS, Personal Computing, Semiconductors, Automotive 
  2. Bill Curtis, Analyst In-Residence, IIoT, and Deep IoT Technology 
  3. Matt Kimball, Principal Analyst, Datacenter Servers, CI, and HCI 
  4. Melody Brue, Principal Analyst, Financial Tech
  5. Steve McDowell, Principal Analyst, Datacenter Storage, and Storage Technologies 
  6. Anshel Sag, Principal Analyst; VR, PC Gaming, Mobile Platforms 
  7. Paul Smith-Goodson, Principal Analyst; Machine Learning, A.I. and Quantum Computing 
  8. Will Townsend, Principal Analyst; Security, Carrier Services, Networking 
  9. Chris Wilder, Contributor, Security 

Operations 

  1. Dan Pickens, Business Director 
  2. Paula Moorhead, Marketing Director, Website, and Social Media 
  3. Walker Pickens, Media Relations, and Writer 
  4. Zane Pickett, Office Manager, AP, AR, travel, writer 
  5. Lee LeClercq Williams, Business Associate 
  6. Nigel Church, Business Associate, Writer, Editor
  7. Jacob Freyman, Writer, and Researcher 
  8. Connor Kenyon, Six Five Sales & Business Development