Moor Insights & strategy Weekly update Ending February 25, 2022

I hope you all had a wonderful week!

Last week, I attended the Oracle Database Analyst Summit.  This week, Anshel, Will and I are at Mobile World Congress in Barcelona.  

Our MI&S team published 16 deliverables: 

The press quoted us with 10 citations.  Journalists wanted to hear about Android, Crypto, Dell, NetApp, Synopsys, Tech, and Telco. 

Quick Insights:

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

  • Elon Musk should be happy with new robot technology that is fine-tuning finger sensors.  The Max Planck Institute for Intelligent Systems has created a thumb-shaped sensor that contains a soft haptic sensor that uses computer vision and a DNN to determine if it is touching an object and the amount of force being applied.  Contact with the sensor and how the extent of the applied force.  The model infers a force map that provides a force vector for every point in the three-dimensional fingertip.

AR/VR (Anshel Sag)

  • N/A

Carrier/Wireless (Will Townsend)

  • Mobile World Congress 2022 should be the coming-out party for private cellular networking and Open RAN.  I anticipate multiple announcements.  I will provide my insights in a show wrap-up article on Forbes.   

Datacenter: 

  • Storage- (Steve McDowell) 
    • NetApp and Dell each reported earnings this past week, with each painting a very different picture of the current state of the storage industry.  NetApp grew its storage business for the fifth consecutive quarter, increasing 6.3% to $1.5B.  Dell, in contrast, shrank its storage business was close to flat.  Dell attributed the lackluster performance to supply chain issues.  While there might be some share shift happening, it’s short-term and situational, as Dell is growing its storage backlog at double-digit rates, achieving its highest order intake since acquiring EMC.  Once the levy breaks on the constrained parts, Dell should see a nice bump in revenue.  We’re heading into an unpredictable storage market, as everyone who’s reported so far (including NetApp) is predicting a bumpy supply-constrained ride over the next two quarters. 
    • NetApp’s earnings weren’t all about storage.  The company, which has set cloud and cloud-native as the center-point of its long-term strategy, is executing well.  NetApp’s cloud revenues grew 98% year-over-year and now account for nearly 7% of the company’s overall revenue.  We’re still cautiously watching this space, but so far, so good.
    • If you’re a Fujitsu mainframe customer, then you might want to start looking elsewhere for your future needs.  Fujitsu announced that it would discontinue its mainframe products, which we assume to include its ETERNUS storage systems, in 2030.  You only have eight more years to plan your transition.
  • Networking- (Will Townsend) 
    • Hewlett Packard Enterprise has officially announced its GreenLake Private 5G as a service offering.  GreenLake is by far the most mature IT consumption service platform.  I like the collaboration with its Aruba division to simplify deployment and ongoing management alongside Wi-Fi services.  From my perspective, network infrastructure providers that can make cellular connectivity as easy to manage as Wi-Fi stand to gain the most share of wallet.    
  • Server- (Matt Kimball)   
    • Familiar with data wiper malware?  There are many interesting write-ups on how the Russian military attacked the Ukrainian government, banks, and other institutions over the past few days.  Data wiping malware both deletes data and renders the underlying operating system disabled.  As tensions mount between Russia and the west, this is a good time for organizations large and small to reassess their defenses through red team exercises and responding remediation and strengthening plans. 
    • Dell’s quarterly numbers show a strong performance from its Infrastructure Solutions Group – with a 7% Y/Y growth in servers and networking.  Especially favorable is recognition that the company is seeing growth in the higher end of the server market.  Additionally, the company is showing strong momentum with APEX – both capabilities and customer wins.  I do believe this is the year we see consumption-based solutions move from pilot/limited use to broad adoption.  And Dell appears to be moving in the right direction with APEX. 
    • Is everybody keeping an eye on Lenovo?  ISG revenue up 19% overall.  CSP revenue up 38%.  Enterprise and SMB up 7% Y/Y.  First profitable quarter for this group since the business was acquired from IBM.  While others have turned away from cloud service providers as a viable market, Lenovo has found a way to make it work.  I’m excited to see what this group does over the next few quarters.   

FinTech (Melody Brue)

  • BNPL operator Klarna is adding physical cards to the company’s options for in-store installment loans.  Klarna is now in the waitlist phase of the rollout for US customers, and when it launched the same type of card in the UK, it had more than 400K people on the waitlist.  The card allows for four installments, similar to PayPal’s online offering, and is a Visa card.  Shoppers can use the card online or in-store, but the move signals a shift that BNPL operators must make to service in-store purchases.  The entire BNPL industry saw a massive boom during the pandemic with the rise in eCommerce and is now having to adjust to “endemic” life with various payment options and consumer demand for payment flexibility in travel, healthcare, and other verticals.  The company recently launched a rewards program, “Vibe,” which rewards users for installment purchases with special offers from top brands and retailers.  With the number of BNPL options increasing, players in the space have to offer rewards, cards, and other perks to drive loyalty. 
  • As the Canadian government shut down the truckers “Freedom Convoy,” the government also cracked down on cryptocurrency donations to the protestors.  Initially, there was a GoFundMe account set up for the truckers, which was shut down.  With Bitcoin seemingly censorship-resistant, people turned to cryptocurrency to fund the movement.  Canadian Prime Minister Trudeau then deemed the protest movement illegal and invoked the Emergency Measures Act.  The Canadian police froze all accounts with bitcoin addresses associated with the Freedom Convoy’s fundraising efforts.  From my understanding, many of the transactions took place before the Emergencies Act was invoked – making the transactions legal at the time.  This is essentially financial censorship.  Self-custody and privacy are central to the utility value of decentralized financial platforms.  Still, it can become a slippery slope when decentralization and censorship resistance can clear the way for illegal activity, including money laundering and terrorism.  For crypto holders and exchanges, this shows that a government can, without judicial process, freeze or seize assets on any exchange.  Regulation seems to be a dirty word in the crypto space.  Still, until there is more defined regulation around cryptocurrency (and perhaps as Coinbase has recently proposed, a regulatory arm dedicated to creating the laws and guidelines), custodial exchanges can not protect users’ assets in a situation where a government deems an activity to be illegal – again, even without fair legal process to make that determination.  This should be a warning sign to crypto holders on an exchange.  Crypto exchange Kraken CEO Jesse Powell said on Twitter that the company could not protect users, and it would be forced to comply if it were in a position of being told by police to freeze assets.  Perhaps as the Kraken CEO suggested, the only way to balance the freedom to transact with this potential reality is P2P trading.  In the wave of the crypto crackdown, many crypto platforms have come together with possible regulatory solutions that maintain the utility value of crypto while adhering to AML and KYC regulations.

IIoT and IoT (Bill Curtis)

  • Foundries.io has made significant progress over the past year.  The FoundriesFactory service leverages Yocto to automate custom-tailoring Linux builds to suit specific hardware platforms and software applications.  When the underlying Linux distro changes, it’s easy to regenerate derivative OS builds automatically and isolate the updated code for incremental OTA updates.  Given the wide variety of Linux-capable IoT platforms, automated distro tailoring is the only practical way for device developers to use standard OSes, tailor them to fit, update them over time, and reduce customization costs.
  • John Deere is opening a tech office in Austin.  Deere invests heavily in agricultural automation, such as self-driving tractors and sensing systems capable of monitoring every individual plant in a field.  Deere’s new facility addresses ag tech’s unique connectivity, autonomy, and maintainability problems.

Personal Computing/ Collaboration (Anshel Sag) 

  • N/A

Quantum Computing (Paul Smith-Goodson)

  • IonQ announced that IonQ Aria, its latest quantum computer, has achieved 20 algorithmic qubits.  The IonQ Aria is currently available for customers in private beta and has the potential to improve performance even further over the coming months.  In 2020, IonQ proposed algorithmic qubits (#AQ) as an application-oriented metric to assist the industry in evaluating quantum computers’ utility in real-world settings.  It is similar to logical qubits available for computation instead of total physical qubits.
  • Something to watch: In February 2020, IBM made an equity investment in Cambridge Quantum Computing, a quantum software company.  Later, in July 2020, Cambridge became a hub in the IBM Q Network.  In November 2021, Cambridge Quantum merged with Honeywell Quantum Solution to become Quantinuum.  The Cambridge Quantum Computing brand was retained due to its global recognition and because it was an IBM hub.  IBM has transferred its February 2020 Cambridge investment to the new Quantinuum entity.  It has also increased the amount of its investment in the merged companies.  It is a smart move by IBM to have an investment in both superconducting and trapped-ion technologies.    

Security (Will Townsend)

  • With the Russian invasion of Ukraine, cyberattacks will increase.  As a result, I believe the attention will provide a sense of urgency to enterprises of all sizes to ensure that critical IT resources are protected from malicious actors.         

Space (Paul Smith-Goodson)

  • I am personally disappointed that NASA Artemis 1 has been delayed to likely sometime past May.  Artemis 1 will be the first flight of the giant SLS rocket.  The SLS is a 2-stage rocket that is 365 feet high (a football field) with a diameter of 28 feet.  Artemis 1 will send an uncrewed Orion spacecraft around the moon using a many Space Launch System (SLS) rocket.  The May launch window is open from May 7 through May 21.  If the system isn’t ready for May, the following window is June 6 through June 16.  The following window after that runs from June 29 through July 12.  Artemis 2 will carry astronauts around the moon in 2024, and Artemis 3 will land astronauts on the moon in 2025.   

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

  1. Renesas Rising Beyond Automotive Into IoT And Infrastructure, by Patrick Moorhead
  2. The Ways The Surface Laptop Studio Is Better Than The MacBook Pro For Creators, by Patrick Moorhead
  3. Image Signal Processor Like Arm’s Is Critical To ADAS Success, by Patrick Moorhead

Blogs Published (MI&S)                                                              

  1. Samsung Could Take The Galaxy S21 FE In Many Directions, by Patrick Moorhead
  2. Galaxy Unpacked: Everyone Take Note, The King Of Smartphones Is Back, by Patrick Moorhead
  3. Oracle Cloud Had A Banner 2021 And Is Very Credible, by Patrick Moorhead
  4. Surprise!  NVIDIA Deal Off, Arm Is Very Profitable, Has A New CEO, And Rene Haas Is Looking Forward To Its IPO, by Patrick Moorhead
  5. Qualcomm And HPE Team Up For 5G Infrastructure Collaboration, by Will Townsend
  6. How CyberArk Manages Privileged Access, by Matt Kimball
  7. Oracle Announces Support For MongoDB – This Is Bigger Than Just An API, by Matt Kimball
  8. Can Quantum Battery Research Extend Electric Vehicle Range?  IonQ And Hyundai Intend To Find Out, by Paul Smith-Goodson

Research Paper(s):

  • N/A

Podcasts:

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

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

  • Going Cloud Native with NetApp Astra
    • Geting to know Eric
    • Forget DevOps, what’s the value of cloud-native for Production Workloads? 
    • Data Management in Cloud Native 
    • Mapping Kubernetes to related services like NetApp Astra and its competitors
    • What is NetApp Astra
    • NetApp is playing in both storage and cloud-native: how should we think about NetApp?
    • Eric asks himself: How easy is it, really? 
    • Matt & Steve wrap up, plus talk a little about NetApp’s most recent earnings call.

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

Moor Insights & Strategy Podcast

Press Citations: 

  1. Android / AndroidCentral https://www.androidcentral.com/android-13-operating-system-google-developer-preview (Anshel Sag)
  2. Crypto / Coindesk https://www.coindesk.com/business/2022/02/18/first-mover-americas-bitcoin-nears-40k-gaming-flips-defi/
  3. Crypto / Trustpedia.io https://trustpedia.io/news/canadian-crackdown-puts-strain-on-crypto/ (Melody Brue)
  4. Crypto / Protocol https://www.protocol.com/newsletters/protocol-fintech/canada-convoy-crypto?rebelltitem=1#rebelltitem1 (Melody Brue)
  5. Dell, Marvell, Telco, 5G / TechTarget https://www.techtarget.com/searchnetworking/news/252513848/Dell-Marvell-partner-on-telco-5G-hardware (Will Townsend)
  6. Netapp, Earnings / https://siliconangle.com/2022/02/23/netapp-delivers-solid-q3-results-mixed-guidance-sends-stock-hours/ (Steve McDowell)
  7. Synopsys, AI, Chips / EETimes https://www.eetimes.com/ai-and-the-real-capacity-crisis-in-chip-design/
  8. Synopsys, AI, Chips / GetDigitalTech https://getdigitaltech.com/ai-and-the-actual-capability-disaster-in-chip-design/
  9. Tech / USA.Firenews.video https://usa.firenews.video/technology/the-tech-gifts-that-are-hard-to-buy-this-holiday-season/
  10. Telco, Cloud / Fiercetelecom https://www.fiercetelecom.com/cloud/analysts-tip-cloud-remain-center-stage-mwc-2022 (Will Townsend)

Company:

  • N/A

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

  • HP Omen 45L Desktop 
  • HP Omen 27c Gaming Monitor 
  • Lumina webcam
  • MSI Creator 15 OLED Laptop

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

  • March
    • VentureBeat Data Summit Mar 9 (Melody Brue)
    • SXSW, Austin, March 11-13 (Patrick Moorhead)
    • American Physical Society, March 14-18 (Paul Smith-Goodson)
    • NVIDIA GTC, San Jose, March 21-24 (Anshel Sag, Steve McDowell, Matt Kimball, Patrick Moorhead, Paul Smith-Goodson, virtual)
    • Aruba Atmosphere, March 27- April 1 (Will Townsend)
    • Datacenter World, Austin, March 28-31 (Matt Kimball, Steve McDowell)
  • April
    • Open Networking & Edge Executive Forum, April 12-14, virtual
    • NetApp Investment Analyst Day, April 22 (Steve McDowell)
    • NVIDIA Investment Analyst Day, April 22 (Steve McDowell)
    • NAB Show, Las Vegas, April 24-27 (Steve McDowell)
    • Zoho Day ‘22, Austin, April 25-27 (Patrick Moorhead)
  • May
    • Dell Tech World, Las Vegas, May 2-5 (Matt Kimball, Steve McDowell, Patrick Moorhead)
    • MediaTek Analysts Day, Scottsdale, May 9-11 (Anshel Sag)
    • IBM Think, May 9-13 (Steve McDowell, Patrick Moorhead)
    • Intel Vision, May 10-11 (Steve McDowell)
    • Computex, May 24-27, (Patrick Moorhead –tentative)
  • June
    • Six Five Summit 2022, Virtual, June 7-9 (Patrick Moorhead)
    • Cisco Live, June 13-16 (Patrick Moorhead)
    • HPE Discover, June 28-30, Las Vegas (Matt Kimball, Steve McDowell)
  • July
  • August
    • Flash Memory Summit, Aug 2-4, Santa Clara (Steve McDowell)
  • September
    • SNIA Storage Developer Conference, San Jose, Sept 28-29 (Steve McDowell)
  • October
    • Open Compute Global Summit, October 18-19 (Steve McDowell)

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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; V.R., P.C. 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. Jacob Freyman, Writer, and Researcher 
  7. Connor Kenyon, Six Five Sales & Business Development