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HCI market grows as storage, servers shrink

Storage and server revenue keep declining sharply. Much of that money is going to public clouds but also to hyper-converged infrastructure systems that combine storage and servers.

Dell EMC, NetApp and Hewlett Packard Enterprise (HPE) all reported declines in storage revenue for their most recent quarters. IBM storage inched up 3% after quarters of decline. Pure Storage grew revenue 17% last quarter, but that’s a far cry from its growth in the 30% range as recently as mid-2018.

Naveen Chhabra, Forrester Research senior analyst for servers and operations, said the cloud and hyper-converged infrastructure (HCI) are taking a toll on traditional storage.

“The entire storage market is in trouble,” Chhabra said. “Every storage vendor has declining revenue. The only one that has shown growth is Pure. Storage investment is happening in the cloud, and the rest of storage is under tremendous pressure.”

Chhabra said he expects the HCI market will remain strong and continue to eat into storage and server sales. “There’s no stopping that,” he said. “Everything, including storage, eventually ends up deployed on the server.”

Dell and HPE sell servers and storage, and best show the trend from those technologies to hyper-converged.

The entire storage market is in trouble.
Naveen ChhabraSenior analyst, Forrester Research

HCI market remains extensive

Dell EMC’s storage revenue fell 3% to $4.5 billion last quarter, and servers and networking declined 19% to $4.3 billion. However, COO Jeff Clarke said hyper-converged revenue grew by more than 10%, mainly thanks to its VMware vSAN-powered VxRail product.

HPE storage declined 0.5% to $1.25 billion and compute fell 10% to $3 billion, but its SimpliVity HCI revenue ticked up by 6%.

At the same time, the leading HCI software vendors increased revenue.

Nutanix revenue grew 21% since last year to $347 million, and its billings increased 4% to $428 million. Dell-owned VMware’s vSAN bookings increased “in the mid-teens” according to the vendor. Both Nutanix and VMware claim they would have grown HCI revenue more, but they have switched to subscription licensing that decreases upfront revenue.

HPE actually picked up more HCI hardware customers through Nutanix, which now sells its software stack on HPE ProLiant servers as part of an OEM deal signed in 2019.

Nutanix said its DX Series consisting of Nutanix software on HPE servers accounted for 117 new customers in its first full quarter of the partnership. Nutanix CEO Dheeraj Pandey said those deals included a $4 million subscription deal with a financial services company, and $1 million deal with another financial services firm.

“HPE is becoming a pretty substantial portion” of Nutanix business, Pandey said. “It’s looking like a win-win for both sides.”

HPE is also offering Nutanix software-as-a-service through its GreenLake program, but it has not disclosed any numbers of those deals.

Pandey said while Nutanix sells HPE servers with its software, many deals come through recommendations from HPE. The Nutanix software stack includes something HPE’s SimpliVity HCI software lacks: a built-in hypervisor. Nutanix’s AHV hypervisor gives customers an alternative to VMware virtualization.

“We have big customers out there who like HPE, and they’d like to consume Nutanix software on HPE servers,” Pandey said. “We’re one of the few companies that deliver the full stack, including HCI, databases, end-user computing and automation. Our largest customers are AHV customers; they’re full-stack customers on Nutanix. We can run on top of Dell servers, HPE servers, our own white box servers, and we can take our software to the public cloud.”

Dell, VMware HCI market leaders

According to the most recent IDC hyper-converged market tracker for the third quarter of 2019, Dell led in systems revenue with a 35.1% share, followed by Nutanix at 13%, Cisco with 5.4%, HPE at 4.6% and Lenovo at 4.5%. IDC recognizes HCI software separately, with VMware at No. 1 with 38% share followed by Nutanix at 27.2%.

Dell still sells Nutanix software on PowerEdge servers as part of a deal that predates Dell’s acquisition of EMC (which included VMware) but focuses more on pushing VxRail systems with vSAN.

Chhabra said Dell recognized the HCI trend well before HPE and rode that to the HCI market lead. He said he sees Nutanix and HPE growing closer to help battle the Dell-VMware HCI combination.

“How does HPE compete with Dell plus VMware?” he said. “Here comes a strong partner in Nutanix, which can give HPE a like-to-like competitor to Dell. Do you have a hypervisor, do you have infrastructure, do you have storage? That’s what the Dell-VMware combination is, and now HPE has that.”

Dell CFO Thomas Sweet said he expects HCI to continue as Dell EMC’s fastest growing storage segment through this year.

“We’ve had great success with our VxRail product,” Sweet said on Dell’s earnings call last week. “We’ve seen softness in the core [storage] array business. That infrastructure space has been soft.”

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My next chapter: Shaping a sustainable future with AI – US Partner Community Blog – Microsoft

Organizations around the world are going through rapid digital transformation. This is especially true in the US Market, where we see this phenomena being accelerated by the scale and agility of the Cloud and fueled by the latest innovation in machine learning and artificial intelligence. As they progress through their transformations and examine impacts on employees, partners, customers, and society, new strategies are emerging with socio-environmental factors with sustainability at the center.

We’re just at the beginning of what is possible with AI, endless possibilities not only for companies and partners but for everyone to benefit from improved societal impact, social good and sustainability. All requiring the need for a strong ecosystem and strategic private & public partnerships to build a trusted and secure future with new AI innovations and solutions. I’m delighted to share I’ve taken a new role at Microsoft to address both of these challenges: Vice President, AI Country Strategy & Sustainability Partnership for the US Microsoft Subsidiary. Focused on driving cross-boundary collaboration and transformation at scale, my new team and I will build strategies and partnerships that strengthen Microsoft’s position in the US as the leader in Cloud & AI, and leverage that knowledge into delivering in the US on Microsoft’s sustainability promise to be carbon negative by 2030.

Microsoft is making big, strategic bets on Cloud & AI and I look forward to driving digital transformation the US with a holistic view of the partner ecosystem—from customers and partners to developers and other strategic partnerships. Through the development of private and public partnerships we will drive technology innovation and ecosystem activation and begin to utilize Microsoft’s $1B investment in support of sustainability agendas across the US.

I have always been passionate about building teams that help shape the future of new technologies; and this new role creates the connections and opportunities for expansion of Microsoft’s mission to empower people, and drive growth and economic prosperity at a global level. The chance to leverage AI and sustainability to help us solve the world’s most vexing challenges is an opportunity for us all—and I’m grateful to be at a company that supports this mission.

While this will be a transition from my current charter in leading Go-To-Markets as a strategic advantage for Microsoft’s commercial partners, I’m excited to see the role the Microsoft community and its tens of thousands of partners will play in driving the future of AI and sustainability.

If you’re interested in learning more about how we are partnering with customers, commercial partners, developers, students and startups, follow along!

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Author: Microsoft News Center

Quantum computing strides continue with IBM, Q Network growth

IBM kept its quantum computing drumbeat going at the Consumer Electronics Show this week with news that it has more than doubled the number of IBM Q Network users over the past year and has signed with Daimler AG to jointly develop the next generation of rechargeable automotive batteries using quantum computers.

Some of the latest additions to the IBM Q Network include Delta Airlines, Goldman Sachs and the Los Alamos National Laboratory. The multiyear deal IBM signed with Delta is the first agreement involving quantum computing in the airline industry, officials from each company said. The two companies will explore developing practical applications to solve problems corporate IT shops and their respective users routinely face every day.

Delta joined the IBM Q Network through one of IBM’s Quantum Computing Hub organizations — in this case, North Carolina State University — where IBM can work more closely with not just user organizations in that region, but academic institutions as well. IBM believes Delta can also make meaningful contributions toward improving quantum computing skills as well as generally build a greater sense of community among a diverse set of organizations.

“Delta can work more closely with key professors and the academic research arm of N.C. State to improve their ability to teach students on a number of quantum technologies,” said Jamie Thomas, general manager overseeing the strategy and development of IBM’s Systems unit. “[Delta] can also offer up experts to many of the regional organizations in the southeast [United States] and collaborate with Research Triangle Park on a number of projects.”

Jamie ThomasJamie Thomas

Similarly, the Oak Ridge National Laboratory serves as a quantum computing hub working with other national labs as well as with academic institutions, including the Georgia Institute of Technology.

“You can see the relationships and ecosystems building (through the network of quantum hubs), which is important because they are all working to solve concrete problems that is necessary to increase the general maturation of quantum computing in regions across the country,” Thomas said.

IBM doubles Quantum Volume

In other quantum computing-related news, IBM officials said they have achieved another scientific milestone with its highest Quantum Volume to date of 32, doubling the previous high of 16. Company officials believe the Quantum Volume metric is a truer measurement of performance because it takes into consideration more than just the raw speed of its quantum computers. According to Thomas, it is a major step along the way to accomplishing Quantum Advantage, which is the ability to solve complex problems that are beyond the abilities of classical systems.

“This milestone is not only important to us because it edges us closer to Quantum Advantage, but because it means we have kept our commitment to double Quantum Volume on an annual basis,” Thomas said.

I think IBM got a bit upset over those recent claims by Google of achieving Quantum Advantage and so they are taking this opportunity [at CES] to reinforce their point about Quantum Volume.
Frank DzubeckPresident, Communications Network Architects

What helped IBM achieve its goal was the introduction of its 53-qubit quantum system last fall, in concert with improved qubit connectivity, a better coherence rate and enhanced air mitigation capabilities, all of which are essential measurements in raising the Quantum Volume number, Thomas said.

“Underneath these metrics is also things like improving the ability to manage these systems, increasing their resiliency and how all the electronics interact with the processor itself,” she said.

One analyst also believes that Quantum Volume is a more practical measure of a quantum system’s power, saying that too many vendors of quantum systems are focused on their machines’ speeds and feeds — similar to the performance battles waged among competing server vendors 10 and 20 years ago. He added this isn’t a practical metric given the nature of quantum science compared to classical architectures.

“Companies such as Google are focusing on Quantum Advantage from a speeds-and-feeds perspective, but that can be just a PR game,” said Frank Dzubeck, president of Communications Network Architects Inc. “I think IBM got a bit upset over those recent claims by Google of achieving Quantum Advantage and so they are taking this opportunity [at CES] to reinforce their point about Quantum Volume,” he said.

Quantum revs car batteries

IBM has also begun working jointly with Daimler to develop the next generation of automotive batteries. The two companies said they are using quantum computers to simulate the chemical makeup of lithium-sulfur batteries, which they claim offers significantly higher energy densities than the current lithium-ion batteries. Officials from both companies said their goal is to design a next-generation rechargeable battery from the ground up.

“The whole battery market is hot across all industries, particularly among automobiles,” Thomas said. “The key is finding different paths to create a battery that maintains its energy for longer periods of time and is more cost-effective for the masses.

Another benefit to using lithium-sulfur batteries is it eliminates the need for cobalt, a material that is largely found in the Democratic Republic of the Congo, formerly known as the Belgian Congo. Because that country and the immediately surrounding territories are often war torn, supply of the materials at times can be constrained.

“The important considerations here are with no cobalt necessary, not only will the supply constraints disappear, but it makes these batteries for automobiles and trucks a lot less expensive,” Dzubeck said.

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For Sale – Intel Core i5 4460 3.2Ghz, Gigabyte Z97P-D3 MBoard, Zalman CNPS10X Optima Cooler, 8GB Corsair 1600mhz Vengeance DDR3 2x4G – Bundle

Thank you for the counter offer, I need to budget for a power supply, SSD and GPU. Going to stick to my offer. I’ve just noticed your payment method, I don’t have PayPal, but can do BT. Let me know if you change your mind.

Sorry – offer withdrawn decided to go a different way. GLWS

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For Sale – Intel Core i5 4460 3.2Ghz, Gigabyte Z97P-D3 MBoard, Zalman CNPS10X Optima Cooler, Corsair Carbide Spec-03 Case,8GB Corsair 1600mhz Vengeance DDR3 2x4G

Thank you for the counter offer, I need to budget for a power supply, SSD and GPU. Going to stick to my offer. I’ve just noticed your payment method, I don’t have PayPal, but can do BT. Let me know if you change your mind.

Sorry – offer withdrawn decided to go a different way. GLWS

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For Sale – Intel Core i5 4460 3.2Ghz, Gigabyte Z97P-D3 MBoard, Zalman CNPS10X Optima Cooler, Corsair Carbide Spec-03 Case,8GB Corsair 1600mhz Vengeance DDR3 2x4G

Thank you for the counter offer, I need to budget for a power supply, SSD and GPU. Going to stick to my offer. I’ve just noticed your payment method, I don’t have PayPal, but can do BT. Let me know if you change your mind.

Sorry – offer withdrawn decided to go a different way. GLWS

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For Sale – Intel Core i5 4460 3.2Ghz, Gigabyte Z97P-D3 MBoard, Zalman CNPS10X Optima Cooler, Corsair Carbide Spec-03 Case,8GB Corsair 1600mhz Vengeance DDR3 2x4G

Thank you for the counter offer, I need to budget for a power supply, SSD and GPU. Going to stick to my offer. I’ve just noticed your payment method, I don’t have PayPal, but can do BT. Let me know if you change your mind.

Sorry – offer withdrawn decided to go a different way. GLWS

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For Sale – Intel Core i5 4460 3.2Ghz, Gigabyte Z97P-D3 MBoard, Zalman CNPS10X Optima Cooler, Corsair Carbide Spec-03 Case,8GB Corsair 1600mhz Vengeance DDR3 2x4G

Thank you for the counter offer, I need to budget for a power supply, SSD and GPU. Going to stick to my offer. I’ve just noticed your payment method, I don’t have PayPal, but can do BT. Let me know if you change your mind.

Sorry – offer withdrawn decided to go a different way. GLWS

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For Sale – Intel Pentium Gold G5400 @ 3.70GHz, 8GB DDR4 Ram, Intel UHD Graphics 610, 120GB SSD, 2TB HDD

Going by a quick Google search I would price them as follows:

PC without SSD & HDD – £130 posted
SSD & HDD – £40 posted

These prices are only applicable if the two offers above are accepted based on my pricing. I won’t ship one part out without the other, so unless both sell at the same time, I would still like the unit to go as a whole.

So what do you guys think?

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For Sale – Intel Core i5 4460 3.2Ghz, Gigabyte Z97P-D3 MBoard, Zalman CNPS10X Optima Cooler, Corsair Carbide Spec-03 Case,8GB Corsair 1600mhz Vengeance DDR3 2x4G

Thank you for the counter offer, I need to budget for a power supply, SSD and GPU. Going to stick to my offer. I’ve just noticed your payment method, I don’t have PayPal, but can do BT. Let me know if you change your mind.

Sorry – offer withdrawn decided to go a different way. GLWS

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