Talking Intel, IBM, Dell Technologies, HP, Google Pixel and Zoomtopia

By Patrick Moorhead - October 10, 2023

On this episode of The Six Five Webcast, hosts Patrick Moorhead and Daniel Newman discuss the tech news stories that made headlines this week. The handpicked topics for this week are:

Intel Spins Out PSG FPGA Unit
IBM AI Threat Detection
Dell Securities Analyst Meeting 2023
HP Imagine Event 2023
Google Pixel 8 – Who Should Care?
Zoomtopia 2023

For a deeper dive into each topic, please click on the links above. Be sure to subscribe to The Six Five Webcast so you never miss an episode.

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Disclaimer: The Six Five Webcast is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we ask that you do not treat us as such.

Transcript:

Daniel Newman: Hey, everyone. It’s Friday and we are back for another episode of The Six Five podcast, episode 187. Patrick Moorhead, can you believe that? 187 times on Friday, almost every Friday for the better part of the last… I don’t know, what is that? Almost four years? We’ve shown up for what I will say is my favorite part of the week, and that’s hanging out with you, bestie.

Patrick Moorhead: Dan, I think everybody knows it’s my part of the week too. I don’t like to miss it. Even if I’m coming in on an airplane and I have no sleep, we can do that. So, anyway-

Daniel Newman: But you’ll complain about it because-

Patrick Moorhead: Of course, I will. That’s just me.

Daniel Newman: No, I really appreciate that about you because what I like to do when I leave home is find someone that will complain to me, because I don’t get enough of that on a regular basis.

Patrick Moorhead: I aim to please, bestie.

Daniel Newman: I do appreciate that. But, hey, it’s another week. And, Pat, I got to say I love our format, but sometimes I get bored. And what maybe bored me the most is we haven’t necessarily used the platform yet to have other thoughtful people.

Patrick Moorhead: 187 episodes-

Daniel Newman: We have our On The Road, and we have… But Friday has always just been you and me and there’s something really special about that. But we’re growing The Six Five. We’re building new platforms. Some people have seen these amazing Connected with Diana Blass episodes that we’ve put out. And I think, and I don’t know how you feel, but I think it’s time that we start to introduce some of the emerging talent and contributors that are going to be part of The Six Five here on Fridays. Maybe over the next few weeks, start letting the people see what’s coming.

Patrick Moorhead: No, I think that’s a great idea. And, Dan, you and I like to think we’re uber techie and we’ve got hands-on. I mean, the reality is I’ve run products for companies, I’ve run product marketing, I’ve run corporate strategy, but very, very little… And I’ll admit it, my hands on a console, I can tell you about a console, I can tell you about a CLI, and maybe I’ve hit a few… I know three programming languages. But-

Daniel Newman: Wait, wait, wait, which ones?

Patrick Moorhead: Fortran, Pascal, and BASIC.

Daniel Newman: God, you’re old.

Patrick Moorhead: Pretty much. No, my first in college I did punch cards on a DEC VAX.

Daniel Newman: I did not know that about you. I never thought you were smart enough to code. But I have to be honest, I have calluses because I am a hardworking type, but it is not from touching anything technically.

Patrick Moorhead: No, it’s pretty much deadlifts and bench presses, I think.

Daniel Newman: Deadlifts and bench press. But this week we had a big week, Pat. We, as in Six Five, and, of course, me as in The Futurum Group, we had some interesting appointments, made a really important announcement of an acquisition of someone that you and I know and admire, Keith Townsend of the CTO Advisor. He’s now part of the Futurum Group. But not only is he going to be part of the Futurum Group, but because he’s part of the Futurum Group, he’s immediately part of The Six Five family. And as we expand The Six Five family, I believe, and I think you share this belief, that Keith would be a tremendous add to some of the programming and some of the content that we’re doing. And I was thinking what better way to kick off our Friday show than bringing on a guest that’s going to soon be a contributor to The Six Five? Keith, are you feeling the love this morning on The Six Five?

Keith Townsend: As you guys were talking, all I could ask myself was, “But does it run on a Raspberry Pie?”

Patrick Moorhead: That’s what my son would… We need to get you guys connected.

Keith Townsend: Yeah, The Six Five is awesome. I’ve seen it on Twitter, I’ve seen it on LinkedIn, I’ve seen it on the YouTube. I’ve seen you guys at the various shows. I really understand… Well, maybe I don’t understand the dynamic, this bestie/friend dynamic between you two. But I kept asking myself, “But does it run in Linux? Can I put it into VM, et cetera?” I’m chomping at the bit to ask some of these highly technical questions.

Patrick Moorhead: Yeah. And I got to tell you that that’s been something that The Six Five hasn’t dove into.

Daniel Newman: No.

Patrick Moorhead: And we just think that, given our audience, they want to know the meat. Right? And I completely respect, and maybe, Keith, can you talk a little bit about your background and experience before the CTO Advisor?

Keith Townsend: Yeah. So, actually, I do know a lot of BASIC, I know a little bit of Fortran and Pascal because I’m that old now, unfortunately. But I’ve been IT even before the CTO Advisor for three decades. Companies such as Chicago Tribune, PwC, Lockheed Martin, AbbVie, Enterprise Architect, a lot of networking. Matter of fact, before the CTO Advisor, my Twitter handle was VirtualizedGeek. Little known fact.

Patrick Moorhead: Was that a VMware thing or a PwC thing?

Keith Townsend: It was actually a VMware thing. When I first started blogging, all of my blogs were can you run a VM inside of a VM inside of a VM? How far down do the turtles go exactly?

Patrick Moorhead: No, I love that.

Daniel Newman: I got to say I’m already bored. That’s why we need you, because there’s so many people that care about this.

Patrick Moorhead: I don’t know, man. I am digging the light pen. Keith, I don’t know where you came up with that, but I’m like, “Man, I’ve seen that I’ve been eclipsed, and I wish I would’ve thought of that myself. But what would I draw on there? Garanimals? A marketing architecture? What-

Keith Townsend: Both of you guys know an awful lot about semis and there’s an awful lot to draw. I’ve had semi folks on my program and I think they’re some of the most active drawers on the light board of all of the folks. They love drawing the manufacturing process. We can work something out.

Patrick Moorhead: No, I love that. And maybe, yeah. Maybe we bring-

Daniel Newman: I’m making an appearance. I don’t know if you’re going to do it, but I’m going to make an appearance with the lightboard. I’m going to draw something out. It’ll be like-

Patrick Moorhead: Sock puppets.

Keith Townsend: Yeah, it’ll probably be like tears from Arsenal not doing-

Daniel Newman: Oh, come on. I’m going to draw Gunnersaurus chewing up some Liverpool fans. Look, I put my loyalties out there. This is me opening up vulnerabilities to the world, Keith. You can’t spit that out. That’d be like me telling you the DePaul Blue Demons suck at basketball. Well, you know that already.

Keith Townsend: You know what? Underneath this Blue Demons sweatshirt is a Blue Demons T-shirt. So watch it, man.

Daniel Newman: I know. I know how you feel-

Keith Townsend: It goes all the way down. It would be more like you saying that my Chicago Bears are not a good football team-

Daniel Newman: Actually, they won last night.

Keith Townsend: We did win last night.

Daniel Newman: That was ridiculous. Now we’re going to screw up the draft pick. We’re going to screw up our draft pick all because they had to go on and win a game after they’re already 0-4. There’s a 0% chance they’re going to the playoffs. You lose and you get Caleb Williams to Chicago. That’s what you do. You lose and you get him to Chicago. But I’m a Cowboys fan now. I sold my soul. I’m out. I’m done with Chicago sports. They’re too cheap for me.

Patrick Moorhead: By the way, none of you have any reason to whine. I grew up in Cleveland, Ohio, folks. And the last time they’ve actually… Browns never won a Super Bowl, and my dad still relishes in the Indians winning the World Series back in the ’40s. So it’s painful, which I got to Texas as soon as I could. I’m a Dallas Cowboys fan, but I still watch the Browns and I’m hoping that someday they might be able to do something, but I don’t know. They’ve got Deshaun Watson, so we’ll see.

Daniel Newman: We need to let Keith go. He’s got some real work to do. And by the way, I appreciate that real work more now than a week ago. Not going to lie. But we’re excited to collaborate and have you bring your smarts to The Six Five audience and, of course, selfishly and Pat is an advisor to Futurum, loves to see you helping grow the whole shebang. And so, keep up all the great work. And, Keith, thanks for joining us and we couldn’t be more thrilled to have you as part of the team.

Keith Townsend: All right. See you guys post-VMware-Broadcom merger.

Patrick Moorhead: Yeah. No, sounds good.

Daniel Newman: I’ll see you before that, for sure.

Keith Townsend: Yes, you will. Pat, you might see me at VMware Explore.

Patrick Moorhead: No, it sounds good.

Keith Townsend: All right, guys.

Daniel Newman: All right. You left him, you left. I was worried. I’m like, “Is he guesting in?”

Patrick Moorhead: Yeah.

Daniel Newman: Well, everybody, I hope you enjoyed getting to meet Keith. I’m telling you. Good person, smart person, and definitely going to add something here on The Six Five. We’re going to get more technical and more technical for that audience, of course. And we’re going to bring the right people in to have those kinds of communications. But, all right. We got to get back to it here. This is the first time you’ve seen The Six Five. You probably thought that might be normal, it wasn’t. But it might be more normal into the future. We got a great show this week. Big news coming from a lot of different companies, a lot of events this week. Some I cared about more than others.

There was a big spinoff, big announcement by Intel, but IBM came out with news. We had a Dell technology security analyst event. HP had a big first-time event. Google announced a new phone, Pat will go into whether anyone should care. And then Eric Yuan made a very interesting entrance to Zoomtopia this year. I don’t know if you saw the video, but… We’re going to also have to go fast today because Pat has a call at the top of the hour and I don’t, so I was going to go as slow as possible just to make him uncomfortable. All right, Pat, let’s jump in today. Just know, this is for information and entertainment purposes only. While we are talking about publicly traded companies, please do not take anything we say as investment advice. Pat, Sandra Rivera is running off to become the CEO of NewCo. What’s going on at Intel?

Patrick Moorhead: That’s right. So second spin for Intel Corporation. The first one was Mobileye. And the second one here is PSG. And PSG is the programmable systems group or programmable solutions group, which equates to FPGAs. And, Dan, we’ve talked a lot on The Six Five about FPGAs really honing in on what Lattice has done. I think what Lattice has shown is that if you’re a pure play, you can grow more than anybody else consistently in, not just in the space, but even semiconductors for a company their size. They’ve outperformed, I think, everybody maybe except Broadcom out there, but I love the up into the right charts that are two years in extension and I just love that. So with this, not only does Intel get to, quote, unquote, unlock shareholder value… Here’s very basically what that means is that some of the parts that Intel don’t equate to what Intel believes is a fair market cap number. Okay? And by spinning each unit out, it can be more easily compared. The thought is on Wall Street, it’s more focused, it can move quicker.

So you saw the Intel stock pop, you saw the Lattice stock go down at the same time. So this makes sense. From a focus standpoint, I think this enables Intel to focus on CPU, GPU, and NPU, and then FPGAs for whatever the NewCo is. So very straightforward from Wall Street standpoint, this is about focus, Intel will retain most of the ownership of the company. I think it does beg the question for AMD, which says, “Hey, we bought Xilinx for 3X billion,” and what does that mean from a adding incremental value? If you look at the percentage of the size of those businesses, I do think that just because Intel spins out, doesn’t negate the benefit of Xilinx to AMD and its customer sets. But we will have to see, and I’m looking forward to working with newly-minted CEO, Sandra Rivera. Sandra, you know where to find us.

Daniel Newman: Absolutely, Pat. Look, you and I have been less than shy about touting the potential of FPGAs. And as we’re moving to more of the hardened silicon, the FPGA has been a catalyst to getting to that. But it’s also been the whole continuum from the large scale that you see often from Intel and from AMD with Xilinx. And we’ve been very positive about the likes of Lattice Semiconductor and what they’re doing in the small and mid-range. But what we do know is this space is hot.

For Intel, though, this is, I think, a big Wall Street move. Why is it a big Wall Street move? Well, first of all, it’s mobilized spinoff has proven to be very successful for adding shareholder value. Intel retained the majority of the control of that business, but was able to unlock a whole lot of market cap and liquidity for the company. This is a little bit different because Intel will need to create the agreements that’ll exist between the new business and its existing business from an IDM and integration standpoint. But from a ability to put focus, unlock market potential and really create and unlock that shareholder value, you’ve seen, Pat… I mean, what stock in the semis has performed better besides Nvidia? What has performed better this year than Lattice? And I think it’s few and far between.

Patrick Moorhead: Yeah.

Daniel Newman: And that’s because Lattice, despite market complexities, has been well diversified and has been able to continue to grow against the trend lines. Well, PSG has been a pretty strong business. And while Intel hasn’t talked a lot about the details of the performance of that business, it is very interesting. So it’s a positive one. Pat, here’s the deal. Every topic the rest of the way, what I want you to do is remind me how much time I have so that I only get one or two minutes to talk. All right. Let’s move on to the next topic here.

Patrick Moorhead: Come on, man. I’m running the show today, dude. I got to-

Daniel Newman: Yeah. But, you got to understand here, sometimes when we look away, we’re not ignoring each other. We’re reading each other’s witty comments in the chat. So, Pat, thanks for that.

Patrick Moorhead: Witty/sarcastic. Yes.

Daniel Newman: I am full of sarcasm today. Pat, so let’s jump on and talk a little bit about an IBM announcement. This one should move a little bit more quickly, but I don’t know if you saw what’s going on with Clorox. I don’t know if you’re paying attention to the continuous stresses and pressures that GenAI data leaks breaches have and the impact that the companies… But one of the things IBM has been doing, and I’ll say it somewhat quietly, while it’s been really busy with its AI and hybrid cloud story, it also has built a very compelling security story. And with its growth in observability, its growth in log and ITSM, IBM is building products and services that are going to help companies more quickly deal with the rapid threat. It’s not if you’re going to get breached, it’s when you’re going to get breached. And so, most, while we’re moving to zero trust architectures, are trying to figure out how do you manage more responses to more threats more quickly and reduce risk.

So IBM is pushing its AI story. It’s going AI-powered with its threat detection, with the goal of basically being able to alleviate about 85% of alerts and doing them completely automatic, completely with AI, 24×7 monitoring and basically being able to layer this on top of the existing tools that companies are using. Pat, to me, it’s a pretty straightforward play. It’s a show of force around AI being used for a very practical application. It’s focusing on one of the surfaces that companies aren’t thinking as much about right now with AI. Companies are all about, “How do we get more productive? How do we push forward the AI for generative and efficiencies?” But keeping your data safe is going to be one of the wars that we’re going to have to wage for enterprises to maintain their shareholder value.

And the last thought on that is, if you actually recall, last week, we talked about IBM taking on legal and ethical responsibilities with its partners and its generative platforms. Well, security is going to be another frontier that I think there could start to see more outcome as a service type of capabilities where companies are going to have to start almost guaranteeing no breaches when you make the big investments. I’m not saying that’s what IBM’s doing, I’m just making that suggestion. But IBM’s really ramped up its observability, its SIEM technologies. You’re seeing it here. This is a start of how AI can be layered onto traditional cybersecurity to add more value. Was that fast enough? That was… By the way, I know you feel like I talked a long time. It was 90 seconds.

Patrick Moorhead: Buddy, come on, let’s not bore our audience with our back and forth here. Let’s just talk-

Daniel Newman: I think it’s cute. I actually think it’s charming.

Patrick Moorhead: Okay. All right. It was charming the first three times. Okay, now that was charming. That was entertaining. So, listen. 10 years ago, I predicted spy versus spy once AI started to get in here. And this was the fundamental belief that when we couldn’t respond, humans couldn’t respond enough because the hackers had nation state budgets, you saw hacking as a service come up, which really means in any market that it’s become primetime.

And here we are, right? IBM is taking advantage of this spy versus spy, right? They’re the spy on the good side that not only says, “I can not only tell you with a higher degree of certainty when there’s something that’s wrong, but I can also remediate it pretty quickly.” Now over time, each side is going to get smarter. Generative AI has become a boon for hackers and it will become a boon for the defenders. And IBM is one of the top five security companies out there, and they’re primarily securing the critical infrastructure, the critical software, and the critical data for financial institutions, for healthcare, for retailers. And this is just another raising the bar here. IBM is very skilled at AI. They were one of the first to go GA with generative AI from an enterprise point of view. They were, quite frankly, early. When Watson first came out, I think nearly 10 years ago, they were probably too early and they didn’t have machine learning and they were using analytics. But IBM is a force and you need to check them out if you want to protect anything that’s critical.

Daniel Newman: Right on. Hey, Pat, you and I spent the morning yesterday watching Mr. Michael Dell, Mr. Jeff Clarke, and the leadership team at Dell for the first time in several years, go to New York City and tell their story to the investors. What happened there?

Patrick Moorhead: Yeah. So I think I tuned in for, I don’t know, two, three hours. And it’s funny, the first thing that dawned on me was, “Wow, founder-led companies are just different.” Michael got up there and with him, folks like Larry Ellison, bring to the table, Jensen Huang, there’s just a, “This is my company, I founded it, and there are still elements of me, big elements in the culture.” And it was a very fact-based… It was interesting. It wasn’t about… This was not about sexy. This was about black and white, “Here’s what we do well and here’s our focus.” It should be no surprise, the generative AI is the big focus. It’s not only a TAM expander, but it’s a market that Dell is doing very well in, and a lot of it’s due from infrastructure.

The other reason is because they’ve got some rockstar salespeople, this gigantic go-to-market engine, and this services group that I’m glad to see them as the top four elements of the go-forward strategy here. You and I have both spent a lot of time with the Dell services group. We’ve had them on The Six Five, we’ve written white papers about them, but it’s great to see them as a first-order citizen on the place mat. The final thing is supply chain. Who was one of the top companies to be able to supply people during the P period, which I’m not going to say, so we don’t get flagged? It was Dell, right? A lot of CEOs were getting up there saying, “Oh, we can’t hit it. We can’t meet demand because we can’t. Our supply chain…” Dell, pretty much for the most part, could deliver every single time.

Now, constructive criticism, I do wish they have their one strategy slide, one slide for the overall strategy. It’s a little bit dry. I wish they could have put their growth areas on there, which, by the way, is more than generative AI. Michael did a good job of really talking about what his customers are looking for, elements of multi-cloud. This is one I need to go back and read the transcript. It was very rich. They had some really good questions from the investment community related to, “Hey, why are you going to win in this generative AI thing? Isn’t that going to be a public cloud thing?” And they talked about… It’s funny. Me, the squeaky wheel, “Hey, 75% of the data is still on-prem, 14 years after the public cloud.” They didn’t use those words, but that was the essence of it. So something that I’ll be tracking here is where will the bets be made? On-prem? Public cloud? It’s going to be both. But I don’t think there’s going to be this huge swing to the public cloud. I just don’t.

Daniel Newman: They did quote some other firm that I’ve never heard of, some number that-

Patrick Moorhead: Oh, you mean firms that get numbers from other companies, and then sell back to them? Those firms?

Daniel Newman: Yeah. It’s really an impressive business model.

Patrick Moorhead: Someday I’ll be there.

Daniel Newman: I go over to Dunkin, I get a bunch of coffee, and then I stand in front of Starbucks and I sell it to people five times as much.

Patrick Moorhead: I love that. I like that.

Daniel Newman: I’ve got swagger. Hey, look. First of all, I love your sentiment about Michael. I do agree with you, as founder-led companies ourselves, I do think there’s just something different. And we aren’t even in the same stratosphere as Michael, so please don’t mistake anything I was saying. But the passion is always so evident when you have someone like that, and Michael’s ability to talk about how he’s done it over four decades. Effectively, he’s recreated the business six, eight different times. He’s done it through inorganic, through organic, through product development, through new partnerships. And the AI era is absolutely going to force the company to do it again.

But one of the things I would say is it’s easy right now if you’re an outsider to look at Dell, look at its margins, look at the challenges of the PC industry and maybe suggest that its future is going to be complex. That’s a nice way of saying people that might doubt. But everywhere along the way, when the company first entered infrastructure, no one believed it. When the EMC deal got done, everyone thought, “Look at all the debt. Look at how complex, how hard that’s going to make it for the business.” Added VMware, spun off VMware. This is, first of all, someone that has amazing financial acumen and strategy. And second of all, someone that has seen the trends and been able to… You’re talking about $102 billion in sales. $102 billion, Pat. Most large companies, large enterprises don’t make that sales. And by the way, some of the companies that we tout and clamor, don’t do that revenue.

Patrick Moorhead: Yeah.

Daniel Newman: Not even in that same stratosphere. Now, there is a lot of seasonality in that business with things like PCs, and that does create complexity, but he has diversified the business in a way. But I do believe that what you said, probably the most important thing that I got out of that meeting, is, look, everything’s not going to the public cloud. We’ve said this a million times here, we’re going to say it a million more times here. Data is not all moving to the public cloud. There’s going to be edge. There’s going to be on device data. There’s going to be data center premises, premises data. And then there’s going to be, of course, that public cloud data. And all of that needs to be able to be levered for insights, analytics, tools, applications. And Dell has products to support that whole continuum.

Look at all the number ones and categories that Dell still runs, all the new and cool storage and data companies out there that are rising. And, of course, Dell’s paying attention to them, but they’re not even making a dent in Dell’s storage business right now. That’s just a for instance. Excited to see how they put it all together. That’s what Dell’s value prop is going to be. Putting it all together, helping the companies navigate the complexities of AI and GenAI. I think they’ll do it. Of course, competition will rise, but the market will grow and the demand for tech will grow. And every generation of this, Michael’s been there and so is Dell. So I expect that to continue. It’s hard to not feel positive about where that’s headed.

Patrick Moorhead: Did Jeff just seem jazzed? I mean, Jeff is always high energy. But Jeff, I think, has entered a new place. I mean, guy’s been there for 37 years.

Daniel Newman: And he only looks like 50.

Patrick Moorhead: No, no. I know.

Daniel Newman: It’s not like he looks 12.

Patrick Moorhead: And by the way, everybody else is in suits and he’s in a blue T-shirt with AI on it with cowboy boots. I just love that.

Daniel Newman: My wife calls this my security blanket. T-shirt’s a security blanket. I wear a vest. It’s 100 degrees here. I’m still wearing a vest. I don’t care.

Patrick Moorhead: Love that.

Daniel Newman: All right, let’s move on. Let’s talk HP Imagine. Let’s go from one company that makes PCs to another company that makes PCs, Pat.

Patrick Moorhead: PCs and more. Yep.

Daniel Newman: Yeah.

Patrick Moorhead: So I wasn’t able to attend the Imagine event. We had a senior analyst and vice president of modern work for Moor Insights & Strategy, Melody Brue. But I tuned into the big show and they really brought it. First off, they’re going to have an annual event that’s just theirs. And I think that that is great. The company has been very inconsistent over the past few years and I know that we all weren’t able to go to events, but I really felt like they pulled back and it’s great to see the company back in there. And they started off really stating their strategy. I think the company does great on this. It was about three things, right? It’s about flexibility, a twist on hybrid, AI impact, which they coined a phrase, from personal computer to personal companion. That is so clever. I wish I would’ve thought of that myself, but it’s classic HP. They’ve validated and verified the benefits of doing generative AI on the device itself. I love this. This ties with Qualcomm is doing, Intel is doing, even Dell talked about it yesterday as well.

And the third thing is trust, which… It was interesting. Typically, HP Inc. was guns a blazing leading with the word sustainability. They didn’t do that. Now trust is about helping the environment, but I found it was interesting that they didn’t lead with that term. And I think it’s a reflection of the times here, where, quite frankly, people are tired of the word. They just want to see action. And it has become very politically charged. Alex got on stage, talked about the new HP AI Studio and the AI workstation solution stack. I need to do a double-click on that, to be honest, on what it is. I like the words that they used in terms of solutions and I like that they came first out of people who… Developers that would show up like my son, Pico, who’s doing generative AI, targeting folks like him.

And I’m going to end with a very, very interesting movable all-in-one. Ironically, it reminds me of a product that the team that I worked on that we did in 1998, that was the first flat screen desktop that you would carry around from room to room. It had no batteries, but it had a big cord that it would snake inside of the unit, but you would carry it around. And by the way, that’s not detracting from what I saw yesterday. It’s more of just admiration that we had a good idea 25 years too early. So ton of stuff with Poly integration, new services that they brought out with, and, finally, a lot of new very compelling print and print-as-a-service.

Daniel Newman: That was my topic, but good job. Thank you.

Patrick Moorhead: I didn’t say anything about it.

Daniel Newman: No. Literally, that was my topic.

Patrick Moorhead: Okay.

Daniel Newman: This was me. So you were so passionate though, Pat, I just wanted to let you roll with it. Look, I had the chance to tune into pieces of it. We did have two of our analysts there covering it. And so, I do look forward to getting more details from the people on the ground. The AI PC, whatever you want to call it, AI platforms, AI studios, AI workstations, AI portable and lightweight, AI-at-the-edge. This is going to be the storyline for the next 20 years-

Patrick Moorhead: Oh, yeah.

Daniel Newman: The next 24 months, you’re going to be hearing about this from every silicon provider and every OEM that’s building devices is basically how AI is going to change this industry. We’re going to see it’s an opportunity to create another supercycle. We need to compel the market that there’s a reason that everybody needs their PC replaced. And so, we’re starting to see that for PCs. We’re starting to see that for workstations. Of course, the creatives are the ones that are going to have this big boom of productivity. If you’re doing things in Adobe, any design, if you’re doing anything in Final Cut… Well, that’s an Apple thing, but you get my directional.

AI is going to change this industry and it’s going to give a reason for people to be doing an upgrade cycle. Pat, I want the foldable. The foldable was a thing that I have been excited about. My most popular tweet ever was when I shared a foldable at CES last year. I saw the foldable yesterday. The Spectre Foldable PC, Pat, I want a piece of that one. I don’t know why. I’m not 100% sure yet I would be a good user of it, but it’s like a parlor trick and I just want to take it out on airplanes and be in rooms and just take it and use it and see what reaction I get. But I also do like the multi-format and I just love things that are disruptive, and I feel like it’s super disruptive.

The moving that… I got to say, I’m not sure I get the movable all-in-one thing, but I got to imagine that HP did its homework. So there’s an audience for this. Is it about creating a highly powerful but… I don’t know. I’m watching that one. And then lastly, as you know, and you and I both know the HP and Poly tie-up. It’s still got a lot of legs left and I think we saw inclinations heard from Dave Shull. I think the road forward is going to be this hybrid, how are we integrating and building into device and eventually, Pat, eventually I want have a device that don’t need to carry any peripherals.

Patrick Moorhead: Yeah.

Daniel Newman: And I don’t know if that’s good or bad for that, is what Poly technology can be built right into the machine. Because when I’m on the road, I want to carry one device, and I want it to have a camera that’s good enough and a mic that’s good enough for broadcast quality. Is that too much to ask?

Patrick Moorhead: No, it’s not at all. And I know that’s underway. I mean, we saw the first thing is just making stuff work right out of the box like Apple does, right?

Daniel Newman: I like the concept.

Patrick Moorhead: So, a gigantic setup.

Daniel Newman: I like the concept. I can be bought. Sold. I can be convinced. All right. Pat, let’s move on. I’m going to try to get your quote, and this is all from memory. If a company with 1% market share of devices, cell phones, mobile devices, puts out a new device, did it really happen?

Patrick Moorhead: Yeah. No, I got a lot of response on that, LinkedIn and on X. And you know what? As I look back as a former product guy, it was a crappy thing to say and maybe it was… I don’t think it was out of frustration, but it was more about it. And by the way, I did add to that, after seven years of pounding their heads against the wall. And by the way, I just want to let you know I brought my pixel just to show off this last generation. But Google has been in this market for seven years and I believe that the stated strategy has changed, but it’s never really talked about not driving volumes. Right? Surface from Microsoft is very clear now. They are above 1% after more than a decade. But they make a big deal out of smartphones and they talk about it every earnings. You never hear it.

So what is Pixel 8? Out of the other side of my mouth, I do want to say I was impressed by some of the technologies of the Pixel 8. First thing is they brought out a new Tensor G3 chip, which it looks like, on a lot of workloads, is slower than its predecessor, but it does some really amazing photography tricks on there. They upped the camera resolution, they improved low light, they improved Magic Eraser, they improved the display, the battery, the design with punch hole. So there’s a lot of good stuff there. They improved, I think, Real Tone Night Sight, stuff like that. They also added Bard. Now, Bard is not integrated, it’s being driven very quickly out of the cloud, and it’s not being done on the device itself. But with this new chip, the G3, with some oversized… It’s either oversized AI or oversized ISP versus, let’s say, what Qualcomm might bring to the table, I’m interested to see what they do with this.

Now I don’t crap talk to get people to reach out to me, but the head of enterprise mobility at Google did reach out, Jesse Vizcaino. I hope, Jesse, I said your name correctly. And we had a dialogue. Jesse used to work at Samsung, and I’ve been researching them for 12 years to have this discussion. And my goal with the first conversation is to better understand their strategy. Is it a growth strategy moving outside of the US or is it a, “Let’s do this as a design for Android, the best of Android, and the best of Google services,” if nothing else, to keep out there in case folks like Samsung don’t play ball with Google?

Daniel Newman: Yeah, I’m going to keep my thoughts here pretty short. I think it’s an opportunity, Pat. I actually think that as you see vertical integration, as we see the AI feature sets, one of the things we’re seeing in cloud is increasingly companies saying basically, “If you want the best of the features, you got to be in the cloud.” Well, Google, and this is a little bit of what Surface has always struggled from as well, has always been really… Philosophically, I’m not in the room in the negotiations, but fair about the Android devices all having some level of parity. And I’m sure there’s some antitrust reasons that has to happen as well.

But having said that, are there going to be features in the AI era that could truly allow Google to make its device the penultimate experience? I mean, Apple’s been doing this for a long time, while it doesn’t actually have the best features, but by basically increasingly vertically integrating and closing architectures, making theirs better, at least to its audience. I don’t feel like Google’s really capitalized necessarily on the opportunity it has. I mean, it is the Android creator, so could it have a stronger, more compelling device story? I think it’ll always be a bit of tug of war, though. It’ll always be a bit of a tug of war with their policy and antitrust requirements. So let’s see how that one goes, Pat. But I think it stays relevant because we need competition and Google… It is a good device. This isn’t a fire phone. This is a good device. It’s just not that popular.

So, all right, we’re going to make it. We’re going to make it. Zoom had its big Zoomtopia event. I alluded in the beginning if you haven’t seen it, Eric Yuan did… Actually, Pat, you do need to watch this. Eric Yuan came out on stage and did the Pat Moorhead. He ran out on stage going Zoom and he ran and did three or four circles on the stage. It made a bit of a headway across the internet and I saw Pat Moorhead do this at a Cloudera event getting everybody pumped up for his keynote, which was really good.

Patrick Moorhead: I tried. Thank you.

Daniel Newman: You’re welcome. And so, what did Zoom release this year at Zoomtopia? So I didn’t make it there, but our research director, Craig Durr, who leads the workspace practice in intelligence for that area was there and I did have the chance to review and watch from afar. A couple things that came out, Pat. This one, first and foremost, Zoom Docs. All right? You with me? Zoom Docs-

Patrick Moorhead: I’m hearing you, dude.

Daniel Newman: No, I’m saying Zoom Docs-

Patrick Moorhead: No, I know. Listen, I had to do a total triple take when I heard that for the first time.

Daniel Newman: Okay, I’m going to be candid. Zoom wants to get into productivity now. I am both excited to see it and try it. From what I saw in the demo, it looks very cool, but my hair is falling out trying to figure out is there a market for another productivity suite, meaning the Zoom and this platform have the capacity to create demand for people that are going to want to use.

Now, in terms of a use in real time with better features for collaborating and interacting with the content, I could see, but I’m still a little… I need to spend some time with this. Are they trying to compete with Microsoft Office? And do they think they have a shot of grabbing market there? This is going to be an interesting one. Again, I could see it being used in the app. I’m just not sure I could see people really being like, “We’re going to switch and commit to building our… Are they going to do Zoom… Is it going to be Zoom Spreadsheets? Are they going to do ZoomPoint? Zoom Presentations? I mean, Google has a lot of budget and has been fighting this fight for a long time with, by the way, a billion email users or whatever they have and they still haven’t been able to get significant. I think it’s 10 million users of workspace or enterprise users. So that’s an interesting one. There’s a bunch of other things.

The one other thing that caught my attention is AI Companion. So like every company out there with an app, they’re building a digital assistant. Clearly, things like summaries, intelligent highlights within meetings, things like that, I could see a huge opportunity. There’s some calendaring, but, again, this is the part… And, Pat, I’m going to pass it to you so we can close this off on time. The part that I’m really puzzled by, because I love the Zoom app. I’m a very positive Zoom person about using the app, especially for my meetings, but are people going to… There’s so many choices. How many of these things are people going to use? And is Zoom taking a risk by going too far into a market that’s somewhat established? And do they have a real shot of getting market share or is it okay if they have small market share because that’s enough to help them grow their business incrementally?

Patrick Moorhead: Well, as long as it’s more than 1% increase over seven years, then it won’t show up on my radar.

Daniel Newman: You don’t get a tweet for that.

Patrick Moorhead: Exactly.

Daniel Newman: You’ll get a tweet.

Patrick Moorhead: So, Dan, no, you asked the seminal question and I look strategically and ask, what’s their other option? Right? We both talked about these giant monolithic platforms, whether it be from Microsoft, Google, Salesforce is trying to build theirs, and Zoom has theirs. I don’t see a strategic alternative other than maybe getting in devices, which is lower margin. It makes no sense. So now, I don’t like the name docs. It should be called workspace. Okay? And whether it’s in Box, whether it’s in Google, Microsoft, everybody has a workspace. And I think the belief is that you and I are going to be on a Zoom video and we’re going to be wanting to share stuff, whether it be a whiteboard or text, and this is going to be the workspace. All right? I’ll tell you what, it is hot. Second point is Zoom AI Companion is amazing. Okay? I don’t gush about very many products except for maybe AirPods here, but this is amazing. If you guys have done the summary, it actually is good-

Daniel Newman: I do love that. I do love that.

Patrick Moorhead: Otter should be embarrassed and should try to figure out how they did that, because it is really good. I have not used Teams yet to be able to do that. Third topic is Workvivo. I said at the very beginning of the P, again, can’t say it because we get… I don’t know, asterisked-

Daniel Newman: I think you get dinged on our web traffic.

Patrick Moorhead: But I said, “Listen, we’re going to go back to work. We’re going to go back to work because the tools aren’t ready.” And part of this is to keep employees in the game, keep them focused in. And they bought a company called Workvivo, which, by the way, is very, very similar to Microsoft’s brand for what they’re trying to do with the same thing called Viva. So I can’t quite figure that one out. But they’re going all-in, man, on the platform. I do think they have a choice. I do think they potentially have a play with Workvivo, but they need to be able to tap into the Microsoft Graph and that’s a TBD there. So I’m going to be watching this, same reaction with docs that you have. I don’t like the name. It is more of a workspace than a docs.

Daniel Newman: Yeah. And I think the question is how does it evolve? So, look, buddy, we did it. I know we were under the crunch, but great show. It was a lot of fun. Thanks to Keith for helping us buck the trend.

Patrick Moorhead: Yeah.

Daniel Newman: A lot of ground to cover every single week. Nobody ever knows the topics that get cut, by the way. But there are some topics that get cut every week. Sometimes Pat sends it to me and I send it back and I say, “Who cares?” But we try to pick the best ones. We try to make it fun. And, hopefully, every week, this is something you want to tune into, either live or on-demand. So hit that subscribe button, join us for all the episodes of The Six Five. The Six Five is growing. What you’re seeing here is just the beginning. It’s empire-building time, buddy. But this week, for this show, for Patrick Moorhead, myself, we got to say goodbye. We’ll miss you, but we’ll see you soon.

Patrick Moorhead
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Patrick founded the firm based on his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Ten years later, Patrick is ranked #1 among technology industry analysts in terms of “power” (ARInsights)  in “press citations” (Apollo Research). Moorhead is a contributor at Forbes and frequently appears on CNBC. He is a broad-based analyst covering a wide variety of topics including the cloud, enterprise SaaS, collaboration, client computing, and semiconductors. He has 30 years of experience including 15 years of executive experience at high tech companies (NCR, AT&T, Compaq, now HP, and AMD) leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments.