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HP Retakes Server Lead
Hewlett-Packard reclaimed its server crown from IBM last quarter as the overall market contracted and Taiwanese vendors made big gains selling directly to Internet giants like Google and Facebook, according to an IDC report.
HP expanded its share of the market only modestly from a year earlier but IBM’s portion declined 4.5 points despite solid mainframe sales, to leave HP in the top spot. HP finished the third quarter with 28.1% of worldwide server revenue to IBM’s 23.4%, IDC said.
But the strongest growth was for the “ODM direct” segment which IDC broke out for the first time this quarter. It stands for original design manufacturers, which are Taiwanese firms like Quanta Computer, Wistron Group, Inventec and Compal, which sell partial and fully-built servers to the big cloud providers.
It’s a growing segment and one that threatens the incumbents. ODM’s accounted for 6.5% of server revenue last quarter, up 45.2% from a year earlier, IDC said. If the ODM category were a single vendor, it would be the third largest ahead of Dell.
Almost 80% of the ODM’s server revenue came from the U.S., primarily from sales to Google, Amazon, Facebook and Rackspace.
Overall, the server market declined 3.7% from a year earlier to $12.1 billion. It was the third consecutive quarter of declining revenue but IDC predicts improvement with a refresh cycle early next year. In terms of units shipped, volumes were about flat year over year, meaning average selling prices dropped.
Volume systems — mostly x86 servers — picked up slightly from last year, with 3.5% revenue growth. But sales of midrange and high-end systems dropped 17.8% and 22.5%, respectively, IDC said.
IBM fared worst of the top 5 vendors, with revenue down 19.4% due to “soft demand for System x and Power Systems,” IDC said. Dell retained third place with 16.2% of revenue, about flat from last year, while Cisco Systems and Oracle tied for fourth.
Cisco saw the most growth of the top vendors, with a nearly 43% revenue jump, IDC said.
Intel’s Cherry Trail Forthcoming
The next generation desktop and mobile Atom is Cherry Trail in 14nm and the first parts are expected in late 2014. Intel has been working hard to accelerate the introduction of Atom parts based on the new architecture and in 2014 it will finally ship Broadwell notebook chips and Cherry Trail Atoms in the same year, both using the new 14nm node.
The Cherry View is a notebook SoC version of a chip based on new Airmont core, while Cherry Trail is the part meant for tablets. The phone version is based on Moorefield architecture and they are all expected to show up in late 2014, most likely very late Q3 2014.
The TDP should go down compared to Bay Trail platform as the new 14nm needs less voltage to hit the same speed and should produce less heat at the same time. With the 14nm shrink Intel’s new Atoms will be able to get more fanless design wins.
The significance of 14nm products for mobile phones and tablets will be in the fact that ARM alliance lead by Qualcomm, Samsung, MediaTek and a few other players will be struggling to get 20nm designs out of the door in 2014, and Intel can already get to a 14nm.
However, Intel still has to integrate LTE inside its mobile phone SoCs, which has traditionally been proven to be a tough task. At this time only Qualcomm has on-die LTE and its LTE enabled SoCs are under the bonnet of almost every significant ARM based high-end phone out there.
Only time will tell how successful Intel’s mobile push will be. Even with these 14nm parts, once they show up roughly a year from now, it might be really tough for Intel to get some high-volume design wins in the phone space, despite the transition to 14nm.
Will Intel’s Tablet Gamble Work?
Earlier this year Intel caused quite a stir when CEO Brian Krzanich announced the company’s ultimate goal is to make $99 tablets a reality. So far Intel has failed to gain much market share in the tablet space, dominated by cheaper ARM application processors and Android.
However, Bay Trail-T has a good chance to turn things around. The new chip can easily take on high-end ARM parts and in most cases, wipe the floor with them. Since it’s an x86 part, it can also be used in Windows 8.1 tablets. However, the price was a problem. Intel’s official Bay Trail-T prices range from $32 to $37, making the chips significantly more expensive than mid-range and low-end ARM parts. However, many vendors are said to be getting discounts and paying a bit less, in the $20 to $30 range.
Things may be about to change. According to Digitimes, Intel is planning to spend up to $1 billion on tablet chip subsides. The cash should sweeten the deal for vendors willing to give Intel SoCs a go. Since we are talking about relatively low average selling prices, Intel could use the cash to practically halve the prices and offer Bay Trail-T parts for as little as $10. This would make them competitive overnight, as high-end ARM SoCs like the Exynos 5 and Tegra 4 are estimated to cost well over $20.
Intel has a long tradition of overspending on marketing. A few years ago it showed Ultrabook vendors with $300 million worth of market development funding and it has a huge Core marketing program. Intel recently announced that it would start treating Atom and Core equally, hence the move would make sense. Since Core lifecycles are getting longer, Intel could simply shift some of the funding to Atom products, namely tablet parts like Bay Trail-T.
The only problem? Well the report comes from Digitimes and the site’s hit and miss track record has been on the “miss” side lately, so take it with a grain of salt.
Is SAP Searching In The Clouds?
Esoteric business software maker, which no one is really certain what it does, SAP is debating whether to accelerate moving more of its business to the cloud.
The move would be a change in strategy which might initially have only a small impact on its sales. Co-chief executive Jim Hagemann-Snabe said the change would generate more sales by 2017 particularly in markets like the US where there is a big push onto the cloud.
Talking to a Morgan Stanley investor conference this morning, Hagemann-Snabe said that this would have impact on the 2015 level, I don’t expect enormous impact but it would have some impact because you are delaying some revenues. In the long term however it makes a lot of sense, which is not the sort of thing people expect from SAP.
Is Intel Expanding?
Even if it means that it will be the first to make ARM’s 64-bit chips, Intel said that it wants to expand its contract foundry work. Intel CEO Brian Krzanich said he would expand his company’s small contract manufacturing business, paving the way for more chipmakers to tap into the world’s most advanced process technology.
Krzanich told analysts that he planned to step up the company’s foundry work, effectively giving Intel’s process technology to its rivals. He said that company’s who can use Intel’s leading edge and build computing capabilities that are better than anyone else’s, are good candidates for foundry service. Krzanich added that the slumping personal computer industry, Intel’s core market, was showing signs of bottoming out.
Intel also unveiled two upcoming mobile chips from its Atom line designed interchange features to create different versions of the component. A high-end version of the new chip, code named Broxton, and is due out in mid-2015. SoFIA, a low-end chip was shown as an example of Intel’s pragmatism and willingness to change how it does business. Krzanich said that in the interest of speed, SoFIA would be manufactured outside of Intel, with the goal of bringing it to market next year.
Intel will move production of SoFIA chips to its own 14 nanometer manufacturing lines, Krzanich added.
Intel Buys KNO Software
Intel has acquired educational software developer Kno to add to its Education division.
Speaking in the company blog, Intel Sales and Marketing Group VP John Galvin explained that in a world where kids are being bombarded by technology, Intel Education has a mission to support the rollout of technology in the classroom.
Galvin said, “The Kno platform provides administrators and teachers with the tools they need to easily assign, manage and monitor their digital learning content and assessments.”
This acquisition brings Intel’s global digital content library to over 225,000 [higher education] and K-12 titles from 74 education publishers. “We’re looking forward to combining our expertise with Kno’s rich content so that together, we can help teachers create classroom environments and personalized learning experiences that lead to student success,” Galvin added.
Intel Education has been working for the past decade with over 10 million teachers that it has assisted to integrate technology with education.
In the UK alone there have been tremendous strides in educational software over the past 30 years, dating back to the government pledge to provide a computer in every school, which led to the creation of the BBC Microcomputer designed specifically for that purpose.
Today, not only is ICT a dedicated lesson in its own right, but it forms one of the key skills that educators are expected to incorporate into all lesson plans, putting it on a par with English and Maths, showing just how far we’ve come from making Venn diagrams with ascii art.
Intel’s Bay Trail M Is On The Way
Intel launched its Bay Trail-M ultra low voltage processors for netbooks and mobile devices over the weekend. According to CPU World the new mobile CPUs, branded this time as Celeron and Pentium, can manage twice the CPU performance, and up to three times faster graphics.
They do all that while using the same amount of juice as their “Cedar Trail” predecessors. Most chips have higher clock speeds than N2805, N2810 and N2910 SKUs and come with Burst Performance technology. They can operate at a higher maximum operating temperature which makes them easier to cool. Finally, in addition to 4 N28xx/N29xx Celerons Intel also released Pentium N2920.
Then there are new dual-core Bay Trail-M microprocessors like the Celeron N2806, N2815 and N2820 which can operate at frequencies from 1.6 GHz to 2.13 GHz, when going downhill had the wind is behind them. They also have the maximum burst speed ranging from 2 GHz to 2.39 GHz. The processors come with 1 MB L2 cache, Ivy Bridge graphics clocked at 311 MHz and up to 756 MHz, and support for DDR3L-1066 memory. The N2806 has 4.5 Watt TDP while the N2815 and N2820 have 7.5 Watt TDP. All of the Celeron N28xx processors are priced at $132.
Two new quad-core microprocessors are Celeron N2920 and Pentium N3520. The CPUs have 2 MB L2 cache, and run at 1.86 GHz and 2.17 GHz respectively, with burst frequencies reaching 2 GHz and 2.42 GHz. Both parts integrate Ivy Bridge graphics, that can be clocked as high as 854 MHz. The Celeron can deal with DDR3L-1066 memory, and the Pentium supports 1333 MHz memory data rate. They fit into 7.5 Watt power envelope. The official prices of Celeron N2920 and Pentium N3520 are $132 and $180.
Will nVidia’s Tegra 5 Go LTE?
The tradition continues. Our sources are confirming that Nvidia’s Logan SoC, possibly called Tegra 5, doesn’t come with an integrated LTE modem. Just like Apple, Nvidia makes a big fast chip with impressive Kepler based GPU, but it won’t put a an icera LTE solution inside the same chip.
Icera i500 is Tegra 5 compatible and it has AT&T certification. As the launch draws near, it should become compatible with other US and international LTE carriers like Verizon and T-mobile.
This should not be a big issue for Nvidia’s target market, manufacturers will have to choose two chips instead of one, a clear competitive disadvantage compared to future Qualcomm chips with Adreno 400 graphics and updated CPU cores, expected in early 2014.
During Nvidia’s recent conference call, CEO Jen Hsun Huang said devices based on the new Tegra 4i with integrated LTE should be announced in Q1 and ship no later than Q2. Jensen also mentioned that people are going to be “delighted by the OEM that it comes from” which is probably his way of of announcing some big brand design wins, but he also emphasised that the designs will be global rather than US. For US success you need CDMA Jensen said, but as far as we know Verizon is the only company using it.
Since Apple can pull of two chip designs from day one, we can only assume that two chip approach won’t cost much battery life compared to single chip design that has LTE on board (Snapdragon 600 and 800 ed. ). However, Nvidia is likely going to be making bets on its Kepler based GPU, expected to be the fastest graphics core ever integrated in a mobile SoC that will rock tablets and some phones around the world. The fact that Logan is likely to pack very powerful graphics sans on-die LTE makes it a bit more interesting for tablets than phones, which is exactly what we saw with the Tegra 4.
We expect to see Tegra 5 devices announced at CES 2014 so early January and with some luck we might see them shipping very early in 2014.
Can Acer Go High-End?
Most popular for its low-cost laptops, Acer doesn’t really inspire thoughts of premium products. But building high-end hardware could be the Taiwanese vendor’s best chance as it looks for a way to rescue its struggling business.
With consumers flocking to tablets and smartphones, Acer’s once-thriving PC business has been left in the dust. Quarterly financial losses have become routine at the company and its PC shipments declined more sharply in the past year than at any other major vendor, according to IDC.
The grim situation forced CEO J.T. Wang to resign from his post last Tuesday. Acer will also cut 7 percent of its global workforce and has assembled an advisory committee to come up with a new strategy, the company announced.
Bright spots are hard to find. The Wintel model that propelled Acer for years and helped it become the second-largest PC vendor in 2009 has been falling apart amid the demand for mobile gadgets. And Windows 8 and Intel’s Ultrabook strategy have failed to resuscitate the market.
It hasn’t helped that Acer is so reliant on sales to consumers, said IDC analyst Bryan Ma. The entire PC industry has been hurt by tablets, but Dell and Hewlett-Packard have at least managed to find cover selling PCs to businesses, which are still buying them. And Lenovo has capitalized on its position in China, now the world’s largest PC market.
“Acer didn’t really have the commercial PC business to protect themselves. That’s why they were hit harder,” Ma said.
Acer — whether to its benefit or detriment — has instead gained a reputation for low-priced PCs. Even in tablets it has tried to undercut rivals — its Iconia W4, an 8-inch Windows 8.1 tablet, starts at US$329.99, while its Iconia B Android tablet goes for $129.99. The low prices have helped keep the company on consumers’ radar, but at the expense of profits.
One option for Acer is to build a brand as a higher-end PC player. It took a step in that direction last year with the Aspire S7, a Windows laptop with a slender, aluminum chassis that sells for $1,200 and up. That product and its successors have had some success for the company, with sales of 2,000 to 3,000 units per month, said James Wang, an analyst with research firm Canalys.
“I think Acer has started to learn they are able to sell some expensive products,” he said.
Selling higher-end PCs could help stop the bleeding in Acer’s finances, but with the overall PC market still shrinking it’s unlikely to help it expand in any meaningful way. “You can’t really expect vendors in desktops and notebooks to find growth,” Wang said. “You win in the market by not falling in shipments.”
Did Stuxnet Infect A Russian Nuclear Plant?
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Kaspersky has claimed that the infamous Stuxnet computer worm “badly infected” the internal network of an unnamed Russian nuclear plant after it caused chaos in Iran’s nuclear facilities.
Speaking at a keynote presentation given at the Canberra Press Club 2013, Kaspersky CEO Eugene Kaspersky said a staffer at the unnamed nuclear plant informed him of the infection.
“[The staffer said] their nuclear plant network which was disconnected from the internet was badly infected by Stuxnet,” Kaspersky said.
“So unfortunately these people who were responsible for offensive technologies, they recognise cyber weapons as an opportunity.”
Stuxnet was discovered to have spread throughout industrial software and equipment in 2010 and is believed to have been created by the United States and Israel to attack Iran’s nuclear facilities. According to Kaspersky’s source, the malware was carried into the Russian nuclear plant and installed on a physically separated “air-gapped” network.
Kaspersky also made a rather outlandish joke during his speech, saying that all data is subject to theft. “All the data is stolen,” Kaspersky said. “At least twice.”
“If the claim of the Russian nuclear plant infection is true, then it’s easy to imagine how this “collateral damage” could have turned into a very serious incident indeed, with obvious diplomatic repercussions,” said security expert Graham Cluley.
“There is no way to independently verify the claim, of course. But it is a fact that Stuxnet managed to infect many computer systems outside of its intended target in Iran,” Cluley added. “Indeed, the very fact that it spread out of control, was what lead to its discovery by security firms.”
Earlier this year, Symantec claimed that the Stuxnet computer worm could date back further than 2010 and was more widespread than originally believed.
Symantec’s report called “The Missing Link” found a build of the Stuxnet attack tool, dubbed Stuxnet 0.5, which it said dated back to 2005 and used different techniques to sabotage industrial facilities.