Lenovo’s chief operating officer said that folding IBM’s System x practice into his company has been tricky.
Gerry Smith, COO and executive vice president of Lenovo’s PC and Enterprise Business Group, said it was taking a lot to retrain the IBM suits in a culture which was a little faster and less stodgy.
Smith told 300 attendees of the 2015 Global Technology Distribution Council (GTDC) Summit in San Francisco there had been supply chain challenges and integration issues Lenovo since its purchase of IBM’s $2.1 billion x86 server business.
Lenovo has been focused on making the IBM server acquisitions mainstream brands where channel partners of all shapes and sizes feel like they can come in, win deals and make money.
“It’s about speed to market, and it’s about the volume of our go-to-market,” Smith said. “It’s not just about having cool-looking, high-performance servers.”
Smith said that integrating IBM’s x86 workforce, and employees from Motorola’s $5 billion smartphone practice, was the single biggest challenge the Beijing-based vendor is facing today.
The proposed merger of Freescale and NXP will result in a semiconductor company that challenges the giants.
That’s according to chief analyst Dale Ford at IHS, who said the merged entity will be in the top 10 semiconductor companies in the world, outranking other giants such as Broadcom and ST Microelectronics.
He said the strength of uniting Freescale and NXP will be shown in automotive applications particularly.
NXP, formerly the semiconductor division of Dutch giant Philips, used to compete in the same market, said Ford.
But the new top 10 will look fundamentally different. By revenues, Intel will remain number one with 14.14 percent, followed by Samsung, Qualcomm, SK Hynix, US DRAM firm Micron, Texas Instruments and Toshiba.
The merged company will be second place in the micro controller market, and it will also have significant share in the digital signal processing (DSP) market, much used in consumer applications.
IHS noted in its report that Freescale is practically an exclusive source for power architecture processors – and although its share in this market is tiny compared to ARM and X86 semiconductors, it has big wins in the military aerospace market.
AMD is pinning its hopes on ARM servers and custom designs to pull its nadgers out of the fire, sources inside the company are saying.
New CEO Lisa Su has said ARM servers will account for as much as 15 percent of the total server market in less than five years and AMD wants a slice of that.
It is a long term gamble, and one which is a move away from AMD’s traditional x86 plans.
What is also strange about the plan is that it does create rivals from companies that are also bidding to put ARM in the data centre.
There is also the problem that ARM adoption in the server space is new and lacks the software and driver maturity of x86 – something which AMD actually knows rather a lot about.
To keep the flag flying. AMD plans to increase its custom semi-design business. AMD has recently signed a number of new customers up to its “semicustom” practice, which it expects to grow into a business worth as much as $1 billion in much-needed new revenues.
Figures supplied by market analyst company Gartner showed that the worldwide server market grew 4.8 percent in shipments for the fourth quarter of 2014.
And revenues grew 2.2 percent in that quarter, compared to the fourth quarter of 2013.
Jeffrey Hewitt a VP at Gartner, described server market for the whole of 2014 as showing strong growth. Growth for the whole year was 2.2 percent.
“Hyper scale data centre deployments as well as service provider installations drove the X86 market upwards,” he said. “Enterprises had less unit growth impact because of the ongoing presence of physical server consolidation through X86 server virtualisation. This overall market growth developed despite declines in both mainframe and Unix platforms.”
HP was the leader server vendor in the quarter in terms of revenues, but only grew 1.5 percent in the whole year. Its market share is 27.9 percent worldwide. IBM showed a decline of 50.6 percent, and Lenovo had extraordinary growth of 743.4 percent. This is because IBM sold its X86 server business to Lenovo in the fourth quarter.
Dell is the second biggest vendor with 17.3 percent in terms of revenues, IBM third, Lenovo fourth and Cisco fifth. “Others” had a market share of 28.6 percent.
HP also led the pack in terms of shipments, pushing out 642,007 units in the fourth quarter.
A price war has developed
on the server front after multinationals faced competition from original design manufacturers (ODMs) that make the machines.
Over the last year or so, companies such as Quanta Computer have undercut Dell and HP and won big orders from the likes of Google and Amazon.
reports that HP is fighting back by striking a deal with giant Taiwanese combo Foxconn to offer cut price X86 servers to customers.
Meanwhile, Dell has struck a deal with Microsoft to offer cloud based systems in a bid to sell private cloud data centres.
But while the news might be good for enterprises looking to pay less for their X86 servers, it can’t be good news for margins.
And Intel, which supplies the majority of microprocessors that power servers, must be worrying about an effect it may have on its margins.
The founder of hedge fund
Kynikos Associates is betting against Intel’s share price and has done so for the last six months.
Intel turned in quarterly results that disappointed Wall Street late last night.
According to Reuters
, Kynikos Associates founder Jim Chanos said he’d shorted Intel’s share for six months.
He believes that despite bullish talk from Intel about its future, the semiconductor giant faces similar challenges as companies HP and IBM did.
Intel’s mainstream business is selling X86 microprocessors used in PC, but as we reported earlier today, revenues from those devices fell in its financial fourth quarter.
Intel shares fell in after hours trading on Wall Street.
Manufacturers of X86
based servers are taking market share from intermediary companies such as Dell and HP.
And, according to Taiwanese wire Digitimes, that trend is sure to increase.
It reports that Taiwanese manufacturers Quanta and Wiwynn will sell more servers to big users during 2015.
The main motivation for the move away from companies like HP is that the boxes are cheaper to source from manufacturers than through middlemen.
And as the trend to data centres continues to grow, companies including Facebook, Microsoft, Amazon and Google will seek to cut costs and establish cloud data centres by directly sourcing product.
that Quanta’s direct business for servers now represents 90 percent of its business, while only 10 percent are shipped to third parties.
Bitter semiconductor rivals Intel and AMD are set to up the stakes in 2015 with a fresh assault on the tablet market.
Both companies are often seen as the Tweedledum and Tweedledee of the chip market, continually foraying into battles where no one actually gets hurt.
But Digitimes, which is privy to both companies’ future roadmaps, said that they’ll foray out once more in an attempt to capture some slice of the tablet pie – estimated to represent 200 million units in 2015.
Intel has been forced to provide subsidies to companies in an attempt to bolster its rather feeble market share in the tablet and mobile markets.
It will kick off the show by releasing a system-on-a-chip (SoC) device codenamed Cherry Trail, which will be built using a 14 nanometre process and may be with the world as early as March next year. The chip will have lower power consumption and support Windows and Android operating systems, said the wire.
But AMD is not going to stand still after receiving that SoC on the jaw. It will introduce an X86 device dubbed Nolan, and an ARM device called Amur in the second half of next year.
Yesterday we reported that server revenues in Europe the Middle East and Africa (EMEA) only showed minor growth.
Those were figures from Gartner. But data from its deadly rival IDC indicate that things were less gloomy for server vendors in the third quarter of this year.
IDC said vendor revenues worldwide rose by 4.8 percent, year on year, to represent revenues of $12.7 billion.
This, said IDC, is the second quarter in a row that the server market has shown a year on year increase in revenue terms.
And shipments in the quarter improved 5.7 percent year on year, representing 2.38 million units. This is largely down to increased spending on hyperscale datacentres. IDC believes it is seeing signs of companies refreshing their servers, which is good news for 2015 too.
There is a difference depending on the type of server. Volume systems showed 8.8 percent revenue growth, midrange systems showed an 18.4 percent growth year on year. But high end enterprise systems plummeted by –23.2 percent, year on year.
IDC figures show HP is n number one place, followed by IBM, Dell, Cisco and Oracle. The “ODM Direct” category is interesting because these are largely Taiwanese companies producing unbranded boxes for multinationals – with prices to match. This chart shows the changes.
Like Gartner, IDC saw a recline in non X86 servers – the thirteenth consecutive quarter of revenue decline. IBM is in pole position here, with a share of 60.8 percent share. Blade servers accounted for 18 percent of total server revenues in the quarter.
Shipments of servers in Europe, the Middle East and Africa (EMEA) fell by four percent in the third quarter of 2014 but revenues rose by 1.2 percent year on year to amount to $2.9 million.
Gartner said that growth seen in the second quarter of this year was “a short lived phenomenon and marginal revenue growth…highlights the fragility of demand”.
But despite this, revenues grew for the third consecutive quarter following 10 previous quarters where revenues declined.
HP managed to grow its revenue lead in the regions with 6.4 percent growth, although shipments declined by 8.2 percent. The growth was largely accounted for by demand for rack optimised and blade system.
Dell managed to displace IBM as second in place in terms of both revenues and shipments. It managed to grow nine percent in revenues and 3.4 percent in shipments. IBM, of course, is ridding itself of its X86 business to Lenovo, while its RISC shipments were hit by a fall in demand for Unix systems. Its lucrative mainframe business is in stasis as Big Blue readies new launches.
Gartner thinks one of the problems is that IT departments in enterprises are struggling because there are datacentre modernisation initiatives which means they are taking their eyes off the ball in the traditional server marketplace.
If RISC, the Intel Itanium and Unix revenues are counted as one, they fell in the quarter by 13.2 percent.
Dell and Intel have interviewed over 5,000 people with jobs to find out what they think about technology.
It is stating the obvious to say both Intel and Dell want small, medium and large organisations in the 12 countries they surveyed to buy more tech, rather than less.
What’s completely clear is that the days of X86 dominance are well and truly over. Tablet use is growing, and 81 percent of employees want their devices to perform well. Low powered Celeron, i3 and i5 chips don’t really cut the mustard here.
Although 97 percent of people spend some time in their employer’s office, 35 percent work in public places for at least two hours a week.
Offices are a problem and 48 percent of the employees are continually distracted with one in five people wearing headphones to cut out the white noise.
A staggering 51 percent of people in their offices don’t talk to their physical neighbours but send them instant messages or emails instead.
A lot of people who work from home benefit from the lack of distraction, with 30 percent sleeping more, and 46 percent being less stressed. But even this is no paradise as their time is taken up by nuisances such as spouses, children, parents and pets.
Here’s good news for Intel and Dell. Some feel poor technology holds them back and stops them pursuing their careers.
An astonishing 92 percent believe voice recognition will be used instead of keyboards, 87 percent think tablets will supplant laptops, 87 percent think all computers will use hand gestures and 88 percent think keyboards and mice will be obsolete pretty soon.
After keeping a low profile over the last few years, it appears that Taiwanese firm Via is planning to re-enter the mainstream PC market in the next year.
According to an interview in Taiwanese wire Digitimes, the company has a joint venture with the government of Shanghai and is deploying X86 based microprocessors along with graphics chips.
Company rep Timothy Chen told the wire that the company will return to the PC market in the second half of next year. Via has a licence from Intel to design and produce X86 CPUs that lasts until 2018.
Its revenue streams right now include payments from chip dynamo Mediatek, USB 3.0 chips, and digital signage. It is also expected to make money from its GenieNetworks CDMA licensing business.
Despite those revenues, said Digitimes, Via turned in net losses in the third quarter. Chen said that there were delays to embedded system business and a number of one off engineering expenses.
Chipzilla has said that it is shrinking PCs to thumb-sized “compute sticks” that will be out next year.
The stick will plug into the back of a smart TV or monitor “and bring it intelligence to that,” claimed senior vice president and general manager of the PC Client Group Kirk Skaugen.
A device the size of a USB stick was shown on stage, but its capabilities were not demonstrated, so we will have to take Intel’s word that it was not a thumb drive Skaugen picked up and waved around before the press conference.
Although, to be fair, the technology is already in the marketplace. Skaugen likened the compute stick to similar thumb PCs offered by PC makers with the Android OS and ARM processor.
Dell’s $129.99 Wyse Cloud Connect, plugs into an HDMI port, can turn a screen or display into a PC, gaming machine or streaming media player.
Skaugen claimed the devices will be an extension to laptops and mini-desktops, which have Core desktop processors in small PCs that can be handheld.
Normally these thumb sized PCs do not have internal storage, but can be used to access files and services in the cloud. The Wyse Cloud Connect has wi-fi and Bluetooth.
Skaugen thinks that the market for such devices is in the tens of millions of units,. The compute stick will bring x86 computing to fanless designs.
Intel makes low-power Atom processors for mobile devices, which could fit into thumb-sized PCs.
Intel rival AMD said it has added two system on a chip (SoC) devices to its semiconductor roadmap.
The Carrizo and the Carrizo-L are being positioned as the firm’s answer to the mobile market.
The chips will support Microsoft DirectX 12, OpenCL 2.0, AMD’s Mantle and Freesync and support for Windows 10, when that emerges next year.
AMD senior VP John Byrne said his company is building on its existing intellectual property portfolio.
He said “our goal is to improve APU energy efficiency by a factor of 25 times by 2020”, and said the company would work with the latest industry standards.
The Carrizo microprocessor combines an X86 CPU core called Excavator with its next generation Radeon graphics in what AMD claims will be the world’s first heterogeneous system architecture compliant SoC.
The chips will ship in the first half of next year, Byrne said.
Megadistributor Avnet said it has been appointed as a global Lenovo route to market.
This follows Lenovo’s acquisition of IBM’s System x (X86) server business early in the month.
Avnet said it will sell Lenovo servers in over 40 different countries around the world.
As well as Lenovo System x systems, Avnet will sell BladeCenter and Flex System blades and switches, X86 integrated system, NextScale and iDataplex servers, software and maintenance.
But this does not mean Avnet is waving goodbye to IBM. It’s worked with Big Blue for nearly 30 years and will continue to distribute IBM Power Systems, Storage Systems, Power Flex servers, training, software and services.
Tony Madden, a senior VP at Avnet Global said: “Avnet is working closely with Lenovo to ensure a seamless transition for existing System x channel partners and their customers.”