Sat, Mar. 7, 3:26 PM
- With Intel's (NASDAQ:INTC) Grantley Xeon CPU launch and Web data center investments offsetting weak high-end server demand, IDC estimates global server revenue rose 1.9% Y/Y in Q4 to $14.5B, and Gartner estimates it rose 2.2% to $14B; those figures compares with Q3 growth estimates of 4.8% and 1.7%, respectively.
- Likewise, IDC estimates global enterprise storage revenue rose 7.2% Y/Y in Q4, aided by Web investments and healthy demand for mid-range systems featuring integrated flash. Q3 growth was pegged at 5.1%.
- IBM had a rough time its both the server and storage markets: IDC believes its storage share fell to 9% (tied for #3) from 12.7% a year earlier, and Gartner estimates its server revenue fell 14% if one excludes Big Blue's x86 server unit, which was just sold to Lenovo. After accounting for the x86 sale, IDC estimates IBM's server share was at 13.7% (#3) vs. 26.8% a year ago.
- HP (NYSE:HPQ) fared a little better: IDC has its server share falling fractionally to 26.8% (still #1 overall), and its storage share falling to 13.8% (#2) from 14.1%. The company's x86 server unit has been gaining ground against IBM's former business, but its high-end server sales remain weak.
- Cisco's (NASDAQ:CSCO) UCS server line (recently refreshed) continues to gain ground: Its share rose to 5.3% (#5) from 4.5%, with full-year revenue pegged at $2.9B. With the help of aggressive pricing and x86 growth, Dell's server share rose to 16.7% (#2) from 15.2%, while its storage share slipped to 9% (tied for #3) from 9.2%. Lenovo (OTCPK:LNVGY) claimed a 7.6% server share (#4) thanks to the IBM deal, kicking Oracle (NYSE:ORCL) out of the top-5 along the way.
- EMC, whose high-end storage sales have been pressured (mid-range/flash demand has been better), saw its storage share drop to 22.2% (still #1) from 23.1%. NetApp (NASDAQ:NTAP), which posted an FQ3 miss and light guidance last month amid tough mid-range competition from EMC and others, saw its share drop to 7.2% (#5) from 8%.
- Not surprisingly, the white-label hardware beloved by Google, Facebook, Amazon, etc. continued to take share. IDC estimates such hardware, referred to as ODM Direct, claimed server and storage shares of 8.2% and 12.8% vs. 6.4% and 9.9% a year ago.
- Sales of x86 servers, the lion's share of which run on Intel CPUs, rose 7.1% to $11.5B. Sales of non-x86 servers fell 14% to $3B, thanks to declining demand for both mainframes and UNIX servers running proprietary RISC CPUs. "Early-stage revenue" was seen for ARM (NASDAQ:ARMH) servers, largely via HP's Moonshot line.
- Other companies with strong server and/or storage exposure: STX, WDC, SMCI, MLNX, AVGO, QLGC, RHT
Thu, Feb. 26, 3:59 PM
- Mellanox (MLNX +3.9%) has gradually rallied following news Avago is buying Fibre Channel/Ethernet adapter and controller vendor Emulex for $609M. Brocade and QLogic are also higher.
- Emulex doesn't compete against Mellanox in the InfiniBand adapter card/switch market, but there is some overlap between the companies in the 10G/40G Ethernet adapter and controller markets. On a broader level, both companies act as connectivity hardware providers for server and storage OEMs.
- Mellanox rallied a month ago after beating Q4 estimates and providing strong Q1 guidance.
Thu, Jan. 29, 9:12 AM
Wed, Jan. 28, 5:35 PM
Wed, Jan. 28, 5:26 PM
- With Intel's Grantley Xeon server CPU launch providing a big tailwind, Mellanox (NASDAQ:MLNX) expects Q1 revenue of $140M-$145M, above a $135.4M consensus.
- CEO Eyal Waldman declares the Q4 beat was fueled by 40G Ethernet adoption by major clients, growing HPC deployments (boosted by share gains), and "additional penetration into Web 2.0, storage and cloud markets." Mellanox's 100G InfiniBand offerings are expected to see initial deployments in Q1, as are its 25/50/100G Ethernet adapters and cables.
- Gross margin rose 300 bps Y/Y in Q4 to 72.3%; it's expected to be at 70%-71% in Q1. Opex rose 14% to $73M.
- Mellanox ended Q4 with $389M in cash/investments, and no debt. Jefferies' downgrade wasn't timed well.
- Q4 results, PR
Wed, Jan. 28, 4:09 PM
Tue, Jan. 27, 5:35 PM| Tue, Jan. 27, 5:35 PM | 4 Comments
Tue, Jan. 27, 10:26 AM
- Declaring there's limited upside to its $50 target, Jefferies has cut Mellanox (NASDAQ:MLNX) to Hold ahead of tomorrow's Q4 report. The Nasdaq is off 1.7%.
- Summit Research forecast in-line results and guidance yesterday. Like others, it thinks Intel's Grantley Xeon server CPU launch boosted demand from Mellanox's HPC clients (50%-60% of revenue). Grantley and strong demand from Internet giants helped Intel report a 25% Y/Y increase in Q4 server CPU division sales.
Tue, Jan. 13, 10:33 AM
- Emulex (NYSE:ELX) now expects FQ2 revenue of $110M-$111M and EPS of $0.23-$0.24, above prior guidance of $102M-$108M and $0.14-$0.18; consensus is at $105.7M and $0.16.
- CEO Jeff Benck: "Emulex finished calendar year 2014 in a much stronger position led by a resilient Fibre Channel sector and benefiting from solid execution and customers' embrace of our current product cycles." The company sees a "broad slate of OEM qualifications of our 10Gb Ethernet products designed for next generation x86 servers [ramping] in the market over the next year."
- Full FQ2 results arrive on Jan. 29. Improving server demand appears to have provided a lift.
- Archrival QLogic (QLGC +5.7%) and InfiniBand/Ethernet adapter and switch vendor Mellanox (MLNX +3%) are also outperforming, as is Fibre Channel switch leader Brocade (BRCD +3.2%). The Nasdaq is up 1.7%.
Dec. 18, 2014, 7:04 PM
- A Northern California judge has granted Mellanox's (NASDAQ:MLNX) motion to dismiss a class-action suit accusing the company and its management of violating federal securities laws.
- Mellanox was accused of making false/misleading statements from July 2012 to January 2013 regarding its business and outlook. Its shares fell sharply during that timeframe after previously soaring into the triple digits. A revenue warning was issued on Jan. 2, 2013.
Dec. 4, 2014, 7:04 PM
- With a corporate upgrade cycle and Web/cloud demand boosting sales, IDC estimates global server revenue rose 4.8% Y/Y in Q3 to $12.7B, an improvement from Q2's 2.5% growth and Q1's 2.2% decline. Gartner is more conservative, estimating revenue only rose 1.7%.
- "IDC has seen increasing market influence from Greater China, hyperscale datacenters, ODMs and native Chinese OEMs, all of which grew sharply in the third quarter," says VP Matt Eastwood. Like others, IDC expects Intel's recent Grantley Xeon CPU launch, together with the pending end of Windows Server 2003 support, to keep demand healthy.
- Thanks to weak demand for its high-end, Itanium-based, Integrity servers, market leader H-P's (NYSE:HPQ) share fell 140 bps Y/Y to 26.5%, after having risen 40 bps in Q2. H-P just rolled out Integrity servers running (x86-based) Intel Xeon CPUs in an attempt to stop the bleeding.
- #2 IBM's share fell 500 bps to 18.2%, thanks to both high-end (mainframe/Power) and x86 weakness. The sale of IBM's x86 server unit to Lenovo closed early in Q4. #3 Dell's share rose 80 bps to 17.8%.
- Cisco (NASDAQ:CSCO) passed Oracle (NYSE:ORCL) to take the #4 slot: Cisco's share rose 130 bps to 6.2% on the back of 31% revenue growth, while Oracle's was flat at 4.1% (3.4% revenue growth). Today, Cisco and IBM announced a converged hardware solution that pairs the former's UCS servers with the latter's Storwize storage arrays.
- As expected, white-label servers sold to Internet giants (called ODM Direct by IDC) continued gaining ground: Their share rose 250 bps to 8.9%. Everyone else saw their share collectively rise 210 bps to 18.4%.
- Related tickers: SMCI, MLNX, QLGC, ELX
Dec. 2, 2014, 10:40 AM
- Mellanox (NASDAQ:MLNX) is about to see "18-24 months of tailwinds in the interconnect space driven by strength in the HPC industry, the Grantley server refresh cycle, data center and storage spending trends, strength in the 40G market and the eventual move towards 100G," predicts Barclays, upgrading the InfiniBand adapter/switch leader to Overweight.
- Barclays does think interconnect competition will intensify - the Street has already been on edge over Intel's plans to encroach on Mellanox's turf - but nonetheless thinks Mellanox can maintain a strong high-end position.
- Though still well below its 2012 highs, Mellanox is now up 44% from a June low of $30.58. Growing non-HPC sales and a strong early reception for Intel's Grantley Xeon CPUs has helped its cause.
Nov. 17, 2014, 7:07 PM
- Intel (NASDAQ:INTC) has officially launched its MICA smart bracelet (previous). The device is priced at $495, and aimed at women. It features a 1.6" OLED display, and delivers texts, e-mails, and Facebook/Google notifications over AT&T's 3G network. Two years of free data is bundled.
- Much like Qualcomm wth its Toq smartwatch, it doesn't look as if Intel's goal is to challenge Apple and Samsung's wearables, but to provide a proof-of-concept for OEMs looking to create similar hardware running on Intel processors. Intel began shipping its low-power Quark CPUs this year, and has also developed Atom CPUs meant for embedded devices.
- Meanwhile, Intel has shared more details Knights Landing, an upcoming 14nm product for its Xeon Phi co-processor line (used in HPC/supercomputer systems), and added Knights Hill, a successor product that will use a 10nm process, to its roadmap.
- Knights Landing, which succeeds the current Knights Corner in 2H15, is said to deliver a 3x improvement in single-thread performance. It includes up to 16GB of memory, can work either as a co-processor or a standalone processor, and relies on a new interconnect fabric (called Omni-Path) that Intel promises will deliver better performance and require fewer switches than the widely-used InfiniBand - that makes it a potential challenge for Mellanox (NASDAQ:MLNX).
- The product takes aim at Nvidia's (NASDAQ:NVDA) leading position in the HPC co-processor market. Today, Nvidia unveiled the Tesla K80, a high-end HPC co-processor said to deliver 8.7 teraflops of single-precision throughput (74% above the prior-gen K40). The K80 sells for $5,000, and contains two of Nvidia's new (28nm) GK210 GPUs.
Nov. 14, 2014, 11:34 AM
- The Department of Energy has awarded $325M in contracts to IBM (IBM +0.6%) to create two GPU-accelerated supercomputers declared to be at least 3x more powerful than any existing system.
- The systems will rely on IBM's Power CPUs, Nvidia's (NVDA +0.5%) Tesla GPUs and NVlink GPU interconnects, and Mellanox's (MLNX +2.1%) 100Gb/s InfiniBand interconnects. Installation is expected in 2017.
- IBM asserts the systems will lower energy consumption by limiting data movement. The deal acts as a nice reference win for Power - Big Blue is trying to stem Power's share losses to Intel's Xeon CPUs by selling to 3rd-party server OEMs and licensing the architecture to other chip developers. Its powerful Power8 CPU (12 cores supporting 96 simultaneous threads) began shipping earlier this year.
- Separately, the DOE says it will invest $100M in FastForward2, an R&D program to create more powerful/energy-efficient supercomputers. IBM, Nvidia, Intel, AMD, and supercomputer maker Cray (CRAY +0.1%) are among the companies taking part.
- PRs: IBM, Nvidia, Mellanox
Nov. 12, 2014, 9:37 AM
- Mellanox (NASDAQ:MLNX) "has determined that [its] accounting for charitable contributions and certain purchase orders in prior periods needs to be revised," and is delaying its Q3 10-Q filing as a result.
- Though management has concluded "the Company’s previously-issued quarterly and annual financial statements were not materially misstated," the cumulative amount would be material to 2014 results if recorded in full during Q3.
- Moreover, Mellanox thinks "these matters are indicative of material weaknesses in the Company’s internal control over financial reporting." It plans to revise its 2011-2013 financial statements.
Nov. 12, 2014, 9:18 AM
MLNX vs. ETF Alternatives
Mellanox Technologies Ltd designs, manufactures and sells interconnect products and solutions that facilitate data transmission between servers, storage systems and communications infrastructure equipment and other embedded systems.
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