IDC: IT Enjoys Renaissance In Current Economic Recession

May 5, 2009
IDC Chief Research Officer, John Gantz, believes enterprise computing is having a good time. But in which planet?

IDC Chief Research Officer, John Gantz, believes enterprise computing is having a good time. But in which planet?

Well that’s thinking way out of the box!

Speaking at the Citrix’s Synergy conference, IDC chief researcher John Gantz told an audience of IT executives that despite the economic meltdown, their line of work is enjoying a long period of growth.

“That’s about as good as it gets,” said Gantz.

For IT, the boom-bust cycle works this way: 5 years of exhuberance, a crash and a long period of growth until the next bubble.

And since the launch of the IBM 360 in 1964 there were only 3 technology crashes (70s, 85, 2000s), and today is just not one of them!

“We just had the IT bubble in 2000-2001,” Gantz recalls.

So what’s all the fuss about IT budgets shrinking and all that?

Well for Gantz, the economic recession is simply forcing companies to “do more with less,” and “sharpen their senses.”

The IDC chief researcher ended its presentation with another unbelievably optimistic line:

“The next four years are a once-a-career opportunity.”

I wonder for who! And with that, “good luck,” he ended!

IDCs point: the IT bust and boom cycles do not coincide with the worlds economys cycles

IDC's point: the IT bust and boom cycles do not coincide with the world economy's cycles

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[Analysis] Microsoft Windows 7 Is Essentially Vista; But Smaller, Faster

April 30, 2009
Roger Kay, President, Endpoint Technologies

Roger Kay, President at Endpoint Technologies is optimistic about Windows 7. I'm not!

A little less than 2-years after the launch of the much hated Windows Vista, Microsoft is getting ready to launch its successor.

Windows 7 is expected to be pre-installed in consumers PCs as early as the end of summer, just in time for the back-to-school season.

Under the hood, Windows 7 is essentially Vista, according to Endpoint Technologies analyst Roger Kay.

But for Kay, Windows 7 is better than Vista in important ways:

  1. Smaller footprint — The new OS takes up less disk space and runs with less main memory; part of the release surprise is the actual hardware specifications, which are similar to those for Windows XP, Vista’s less-resource-hungry predecessor.
  2. Faster — Everything is faster: boot time, application loading, overall performance.
  3. Quiescent — A lot of the old “chattiness” of Vista, particularly of user account control, is gone; the user interface stays out of your face and does what you tell it to do.
  4. More elegant — There are many fun and intuitive features that work well, stay in the background otherwise, and look good; the interface can be personalized more easily and to a greater degree.

Sounds like a MacOS me-too, right?

I’ll be testing the final release of Windows 7 soon on a Mac virtualized environment – just to fasten the comparison! – and will report back!

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[Analysis] Palm Pre: Hype Precedes Reality, Time Is Running Out

April 30, 2009
Spray and Pray. Thats how I would describe Palms hunt for real reviewers. As Dells Andy Lark pointed out recently, its easy to identify the influencers. Just start Googling!

Spray and Pray. That's how I would describe Palm's hunt for "real reviewers". As Dell's Andy Lark pointed out recently, it's easy to identify the "influencers." Just start Googling!

Pressure is mounting on Palm as it gets closer to launching its new Pre smartphone, rumored to be just a couple weeks away, in mid-May.

For Collins Stewart analyst Ashok Kumar, Palm may be facing much more challenges than it can bear.

Pre faces multiple software and hardware issues

In a report this morning, Kumar writes about multiple hardware and software issues that forced Palm to dramatically reduced its production orders for the Pre; calling Wall Street’s expectation of Palm shipping 1+ million smart phones in 2H09, highly unrealistic.

Palms future depends on the Pres successful launch

Palm's future depends on the success of its Pre smartphone

Pre must sell at or below $199

For Kumar, if Sprint does not match or beat AT&T’s subsidized iPhone price of $199, which translates to a subsidy in excess of $200, the Pre is Dead On Arrival.

According to a virtual teardown done by analyst firm iSuppli, the material cost for the Pre is $170. iSupply expects Palm to charge Sprint $300 for the Pre, which in turn would subsidies the device to reach the iPhone level.

Running out of cash… again!

Kumar said that Palm’s cash burn was about $90 million last quarter, which should increase significantly with higher marketing cost associated with the launch of the Pre platform.

With only $220 million in the bank, time runs out in two quarters, Kumar notes.

But Palm might found a way to reduce its marketing “spend” by recruiting “Real Reviewers” of Palm phones including the Palm Pre. Every reviewer, will receive for free, a current model Palm phone and a data plan for six months. The only requirement is to regularly post about the Palm phone on blogs and social networks.

It’s smart for Palm to try to target “influencers” (journalists, bloggers, soccer Moms…). A strategy that was highly recommended at yesterday’s PRSA event on “PR Secret Strategies For Success” by PR pros from Dell, FICO and Sun. For the bloggers, it’s a double-edge sword: get an early access to the Pre, but risk selling your soul or at least the perception of it.

We already played with the Pre at CES, last January. The keyboard is nice – similar to the Palm Treo Pro – but the rest of the experience (features, applications) will need time to get use to it. We’ll stick with our iPhone, Blackberry and soon Google G1 for now!

Still, no takers, for Palm

Finally, Kumar does not believe that Palm is an attractive take out candidate.

“Their crown jewel is the operating system, but the smart phone industry is migrating away from closed to open platforms. As such PALM is on the wrong side of the fence,” writes the financial analyst.

While I agree that in this distress economy, Palm is an expensive and risky buy – which generally does not go well together – Palm’s WebOS is a much more “open” system than the highly successful iPhone.

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Analysis: General Electric 500GB Holographic Disc Is Too Costly For Consumer Success

April 28, 2009
Holographic discs could be the technology after Blu-ray

G.E.'s holographic discs could be the technology after Blu-ray

Yesterday General Electric said it successfully developed a digital storage technology that will allow standard-size discs to hold the equivalent of 100 DVDs or about 20 single-layer Blu-ray discs.

G.E.’s holographic discs could hold 500 gigabytes of data, when Blu-ray stores 25-gigabyte to 50-gigabyte, and a standard DVD holds 5 gigabytes.

When this next-generation disc comes in 2011 or 2012, G.E. expects it will cost less than 10 cents a gigabyte. When Blu-ray was introduced in late 2006, a 25-gigabyte disc cost nearly $1 a gigabyte, and is about half that now.

Furthermore, as a reader pointed out, the $2,700 player price tag will also have to come down to the $200-$300 level before the technology gets any mass-market traction.

But for storage expert Tom Coughlin, of Atascadero, Calif.-analyst firm Coughlin Associates, 500 gigabytes might just not be enough with ultra-HD and 3D coming to your home soon.

Tom Coughlin is an expert in digital storage and organiser of the Creative Storage conference

Tom Coughlin is an expert in digital storage and organiser of the Creative Storage conference

Follows, Coughlin’s take on G.E.’s technology:

I think G.E.’s holographics will be useful for high resolution video content. For instance the ultra-HD format being promoted by NHK in Japan would have 8k resolution requiring about 16 times the storage capacity of a Blu-ray. Combined with 3D this could require at least 500 GB and possibly more.

The argument for physical distribution is that for high resolution content it will remain cheaper and faster to buy a disc than download the content.

Too costly for consumers

However, regarding the price I think it must ultimately be less than 10 cents a GB to be popular. At 10 cents a disc a 500 GB disk would cost $50 and I don’t think consumers would pay that price. I think the price of a disc must be less than $10 in volume (without any cost for the content). Note that Blu-ray has had to quickly discount their prices to increase demand for the new format.

But a higher capacity physical format at the right price point could be very attractive for future high resolution content distribution.

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Analyst: Cisco To Launch Densest Intel Blade Servers; Competes Head-To-Head With Dell, H-P, IBM, Sun

March 15, 2009

At an event Monday, Cisco Systems CEO, John Chambers, will unveil the company’s first ever servers, code-named “California”.

According to an IMEX Research report, Cisco’s blade servers will feature two Nehalem 5570 Xeons based on Intel’s Core i7 processors, with up to 384GB of memory, well above the maximum capacity of 128GB in today’s blades and allowing up to 100 virtual machines on a single server.

“Cisco will be entering the market with by far the densest and powerful blade servers and data center infrastructure than any existing on the market,” indicates the IMEX report.

The “California” blades will integrate VMware’s virtualization software, and embed a Nexus 5000 networking switch, putting computing and networking in a single box, thus removing bottlenecks at a memory and networking level.

The San Jose, Calif.-company’s latest servers will compete head-to-head with blade offerings from Dell, H-P, IBM and Sun.

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Analyst: H-P Is No Direct Competitor To IBM

February 27, 2009
Roger Kay, President, Endpoint Technologies

Roger Kay, President, Endpoint Technologies

Quite often these days, people compare the results and business models of IBM and Hewlett-Packard (H-P) as if they were direct competitors. In truth, they do compete in several key areas, notably enterprise hardware and services. But in other ways, they are very different beasts.

Services help smooth IBM revenues, profits

Under Sam Palmisano, IBM has transformed itself into an enterprise services-led company, with that
division accounting for $39.3 billion or 38% of the company’s $103.6 billion revenue in 2008.

By contrast, H-P, even with the EDS acquisition, derived only $22.4 billion or 18.9% of its $118.3 billion fiscal
2008 revenue from services.

In many cases, IBM’s services division pulls the company’s other groups along in its slipstream. When an IBM services sales team wins an enterprise customer with a complex set of requirements, it is often able to bring the hardware, software, and financing divisions along as well.

Services have a way of smoothing out a company’s revenue picture.  Long-term signings create a huge pile of deferred revenue, which comes in handy during lean years like this one.  IBM’s financials reflect the steadying nature of its large services business.

Read the rest of this entry »

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Intel Attempts To Slow Chipset Competition For Its Next-Gen Processors, Deja Vu!

February 20, 2009
Intel sued to prevent Nvidia to make chipsets for the Core i7 processors

Intel sued to prevent Nvidia to make chipsets for the Core i7 processors

I had a sudden flashback when I heard Intel suing Nvidia this week over the rights – or not – to build chipsets for its next generation processors dubbed “Nehalem”.

It was 8 years ago in September 2001, when Intel took Taiwanese-company VIA to court for making chipsets intended for the Pentium 4 processors without a proper license.

However, two years later, Intel eventually dropped its lawsuits against VIA, giving the Taiwanese company the opportunity to produce chipsets for the Pentium 4 with Intel’s blessings.

Now back to Intel’s pre-emptive lawsuit against Nvidia, which by the way did not release nor even built a Nehalem chipset yet.

Some fear that leaving Intel the monopole of building crappy graphics chipsets for the latest Core i7 chip and its successors is bad for competition, especially for the low-end PCs; which I totally disagree.

Large OEM customers like Apple or H-P already careless of Intel’s under-performing integrated graphic chips and are using ATI’s or Nvidia’s instead, as its the case today for the Core 2 Duo and Quad chips.

And as far as the low end goes, Atom-based PCs with a decent ATI or Nvidia graphics chipset is the norm this year!

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Analyst: Amazon Kindle Could Hit $1.2 Billion In 2010

February 4, 2009

Citigroup analyst Mark Mahaney thinks the Kindle is outpacing Apple’s iPod early sales.

As Amazon prepares to roll out on Monday the next-generation of its electronic book reader, Mahaney estimates that the Seattle company sold 500,000 Kindles last year for a total revenue – including both the devices and the books – of $158 million; and that sales could reach $1.2 billion by 2010.

However, to keep up with this rapid pace, Amazon will have to significantly lower the $359 sticker price of the current Kindle as it faces accrued competition from Sony’s Reader Digital Book and other low cost e-book readers, as well as various iPhone applications.

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Analyst: Hard Disk Drive Shipments Worst Decline Ever In 2009

February 4, 2009

Hard disk drive makers are in for a very very tough year.

According to Coughlin Associates, fourth quarter 2008 hard disk drive (HDD) shipments declined about 19% from the third quarter of 2008; an unprecedented Q3 to Q4 drop.

Total HDD shipments for 2008 were about 540 million units and could fall as low as 500 million units this year, on par with 2007 volume.

“There is more downside than upside ahead and as a consequence, HDD unit shipments in 2009 will experience their worst year over year decline ever. The total decline in HDD units in 2009 over 2008 will be between 5% and 9% with a decline of 7% being likely,“ writes Tom Coughlin, the principal analyst at Coughlin Associates.

However, the decline in HDD revenue could be much steeper, as HDD companies like Toshiba, Samsung, Seagate or Western Digital engage in an unprecedented price war for survival.

Looking ahead, Coughlin expects positive growth in 2010 and a full recovery by 2011, with annual unit growth in the 20% or higher range or higher, like in 2003.

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Memory Chip Prices Soar Up To 26%

February 2, 2009

Finally a good in the chip memory business.

PC memory prices, including DRAM and Flash, recently jumped more than 26%, according to DRAMeXchange, which monitors the DRAM/Flash industry.

This is particularly good news for struggling chip makers like Micron, Samsung, Sandisk, Toshiba and others that have been posting severe losses in their memory business.

Milpitas, Calif.-company Sandisk announced today some more dire results, with total revenue for fiscal 2008 of $3.35 billion – a 14 percent decline – and a whopping $2.7 billion net loss.

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