The CEO of Intel says that the 'insatiable demand' for enough processing power to handle tons of data led it to a big beat on Wall Street expectations
Intel shares rallied more than 6% on Thursday after the chipmaker topped Wall Street expectations for the fourth quarter. The tech giant got a huge lift from its data center business, which benefited from robust demand processors from the cloud service providers. CEO Bob Swan said the strong cloud market was being fueled by an "insatiable appetite" for data and the processing power needed to handle it. The company also posted an upbeat outlook for the current quarter and for the year. Intel said it expects revenue of $19 billion for the current quarter, and $73.5 billion for the current year. Click here for more BI Prime stories.
Intel's big bet on the market for data center chips appears to be paying off, but the chip giant is embracing a cautious approach to a market known for unexpected ebbs and flows. Intel shares rallied more than 6% on Thursday after the chipmaker topped Wall Street expectations for the fourth quarter. The tech giant got a huge lift from its data center business which benefited from robust demand processors from the cloud service providers. CEO Bob Swan said the results were based on a continuously expanding cloud market with an "insatiable appetite" for data and the processing resources needed to handle it. Revenue for Intel's data center business rose 19% year over year to $7.2 billion. Its PC business edged up by 2% to $10 billion. That's a good sign for Intel which has pivoted away from a shrinking PC market. The semiconductor giant has focused increasingly on the lucrative and growing market for processors used to power massive cloud infrastructures and corporate data centers. Analyst Patrick Moorhead of Moor Insights and Strategy said Intel had a "great fourth quarter in spite of increased competition and supply challenges." He was referring to the challenge posed by Intel archrival AMD, whose new server chips have won high praise, and is expected to take more share from Intel. Intel also has been plagued by production issues that have led to supply constraints. "The data-centric businesses carried the day," Moorhead told Business Insider. A key reason was the rapid growth of companies building massive cloud platforms, led by Amazon, Microsoft and Google. Swan said the cloud — specifically, serving mega-providers like Amazon and Microsoft with chips — is becoming a "bigger and bigger part" of its data center business revenue. But the cloud market can be unpredictable, which Intel learned the hard way last year when an unexpected build-out stalled, causing a dip in demand. That's why Intel is proceeding with caution, Swan said. "They go into digestion mode and the buying patterns slow down," he told analysts on the earnings call. "Hopefully, we're wrong. Hopefully we're conservative." Outlook is good But Intel also cheered Wall Street with an upbeat overall outlook for the quarter and the year. For the first quarter, Intel said it expect a profit of $1.30 a share on revenue of $19 billion. Analysts were expecting a profit of $1.04 a share on revenue of $17.2 billion For the full year, it sees a profit of $5 a share on revenue of $73.5 billion. Analysts were expecting a profit of $4.61 a share on revenue of $71 billion. Intel reported a fourth-quarter profit of $6.9 billion, or $1.58 a share, compared with a profit of $5.2 billion, or $1.12 a share for the year-ago period. Revenue rose to $20.2 billion from $18.7 billion. Adjusted profit was $1.52 a share. Analysts were expecting Intel to report a profit of $1.25 a share on revenue of $19.23 billion. Got a tip about Intel or another tech company? Contact this reporter via email at email@example.com, message him on Twitter @benpimentel or send him a secure message through Signal at (510) Join the conversation about this story » NOW WATCH: How to find water when you're stuck in the desert
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Microsoft's Azure cloud business just showed accelerated growth for the first time in years as it takes on Amazon Web Services
Microsoft's Azure cloud computing business grew faster this quarter than last quarter. It's the first time...Microsoft's Azure cloud computing business grew faster this quarter than last quarter. It's the first time Azure's quarterly revenue growth rate has increased in years. The increase was a very modest three percentage points, but any increase is significant as industry watchers looks for indications Microsoft is gaining traction in the cloud market over dominant Amazon Web Services. However, Microsoft still does not break out specific revenue figures for Azure. Click here to read more BI Prime stories. For the first time in years, Microsoft's cloud computing business grew faster during the company's most recent quarter than in the quarter before. The company released fiscal second-quarter earnings on Wednesday, reported a 62 percent increase in Azure revenue growth compared to the same quarter last year. The growth rate is up from Azure's 59 percent growth rate last quarter. While a three-percentage-point increase is very modest, it's the first increase in Azure's growth rate in many quarters and significant as the cloud computing industry watches for signs of Microsoft's growing traction. Azure revenue has been falling consistently since after October 2017 earnings release when the company reported a 98% Azure growth rate (subsequent growth rates were 93%, 76%, 76%, 73% and finally 59% last quarter before jumping to 62% this quarter). Even as growth slowed, Wall Street seemed unfazed. Analysts told Business Insider they chalk it up to the "law of large numbers." Basically, the bigger these platforms get, the harder it is to post the triple-digit growth figures that they did when the platforms were younger. Amazon Web Services has seen its revenue growth slow too, for largely the same reasons. Microsoft's cloud business is closely watched, particularly after the company scored a $10 billion Pentagon cloud computing contract over AWS. The contract didn't begin within the quarter, but the most bullish analysts on Microsoft expected it to lead to business elsewhere and even said Microsoft could erode AWS market share as a result. AWS disagrees, to say the least. The company is challenging the Pentagon's contract decision based on the premise AWS technology is so superior to Microsoft that the decision much has included political interference. Microsoft has repeatedly said it believes it won on its own merits. Microsoft handily beat Wall Street expectations when the company released fiscal second-quarter earnings on Wednesday, reporting a $11.6 billion profit on earnings of $36.9 billion revenue. Got a tip? Contact this reporter via email at firstname.lastname@example.org, message her on Twitter @ashannstew, or send her a secure message through Signal at 425-344-8242.Join the conversation about this story » NOW WATCH: Behind the scenes with Shepard Smith — the Fox News star who just announced his resignation from the network
The CEO of VMware says that Microsoft's $10 billion JEDI cloud win is 'just a piece' of the opportunities that the company has in working with the government
VMware CEO Pat Gelsinger said he's monitoring the legal appeals related to the Pentagon's JEDI deal....VMware CEO Pat Gelsinger said he's monitoring the legal appeals related to the Pentagon's JEDI deal. But he said the $10 billion cloud project is just one of many government opportunities for the tech giant. Microsoft won the Defense Department contract but rival Amazon has mounted a legal challenge. Other tech companies are expected to play a role in the major public cloud project. VMware is a key partner of the three major cloud giants, Microsoft, Amazon and Google, and is expected to also play some role in the completion of the JEDI contract. "Given our very high market share in the government, our hybrid cloud is uniquely valuable to government customers," Gelsinger added. "We've seen extremely high interest from CIOs and the government, as they see huge value for this ability to migrate to the cloud." VMware shares were up fractionally after the company posted better-than-expected quarterly results. Click here for more BI Prime stories. VMware CEO Pat Gelsinger said he's following the appeals process related to the Pentagon's JEDI deal, but stressed that the $10 billion cloud project is just one of many government opportunities for the tech giant. The Defense Department awarded the Joint Enterprise Defense Infrastructure (JEDI) project to Microsoft last month, but rival Amazon, which had been considered the favorite to win the deal, has filed a legal challenge to the decision. Gelsinger was asked about his thoughts on the JEDI project Tuesday after VMware reported quarterly results. While the deal only names one cloud computing platform as the winner — Microsoft, as it turned out — the Pentagon is expected to use tech from other vendors, including VMware, to help operate its cloud infrastructure. "Are you optimistic that VMware could play a role in that contract or in other government projects, since you're the critical hybrid partner for all three of the major public cloud platforms?" an analyst asked. VMware holds the rare position of having notable cloud partnerships with Microsoft, Amazon, and Google. "We'll just say overall we're following the JEDI event closely," Gelsinger said. "We're looking forward to getting to the eventual outcome of the appeals process, but also point out that the JEDI contract itself is one of many, and this represents just a piece of a much, much broader set of cloud opportunities in the government." VMware offers virtualization software which lets businesses tap disparate computer systems in private data centers or in the cloud as one network leading to lower IT costs. It has become a critical player in the cloud, which lets businesses set up their networks on web-based platforms, allowing them to scale down or abandon private data centers. Gelsinger said VMware is "well-positioned" with its partnerships with the major cloud providers. "And we do expect that through those partnerships that we will have a thriving government business," he said. VMware is also seen benefiting from two newer trends. One is the hybrid cloud in which businesses set up networks in the cloud while keeping huge chunks of their data and applications in private data centers. The other is the multi-cloud in which businesses set up networks on different cloud platforms and private centers. "Given our very high market share in the government, our hybrid cloud is uniquely valuable to government customers," Gelsinger added. "We've seen extremely high interest from CIOs and the government, as they see huge value for this ability to migrate to the cloud. We really see that we have great opportunity from the government and with our hybrid cloud offerings in the government space in the future." VMware shares were up fractionally in late trades after the company reported better-than-expected results. VMWare reported a fiscal third-quarter profit of $621 million, or $1.50 a share, compared with a profit of $334 million, or 81 cents a share, for the year-ago quarter. Revenue rose 12% to $2.46 billion. Adjusted income was $1.49 a share. Analysts were expecting a profit of $1.43 a share on revenue of $2.41 billion. Got a tip about VMware or another tech company? Contact this reporter via email at email@example.com, message him on Twitter @benpimentel or send him a secure message through Signal at (510) 731-8429. You can also contact Business Insider securely via SecureDrop.Join the conversation about this story » NOW WATCH: Here's how to escape a flooding vehicle
The CEO of HPE says that it's already a step ahead of Dell in the race to reinvent the business model for data-center hardware: 'People are now trying to copy us'
Antonio Neri, HPE's CEO, told us he wasn't too worried about rival Dell's new on-demand offering,...Antonio Neri, HPE's CEO, told us he wasn't too worried about rival Dell's new on-demand offering, saying the Silicon Valley giant has a huge lead in the push toward the "everything-as-a-service" business model. Dell rolled out a new on-demand product that lets businesses pay for only the computing capacity they use, instead of buying entire systems. HPE had recently rolled out its own on-demand offering. The initiatives underscore the shift toward more flexible and pay-per-use business models in the enterprise market, where the cloud is giving businesses more options in setting up their computer networks. HPE shares slipped in late trades after the tech giant posted weaker-than-expected revenue. Click here for more BI Prime stories. Hewlett Packard Enterprise CEO Antonio Neri downplayed rival Dell's new on-demand offering as he touted the Silicon Valley giant's lead in the push toward the "everything-as-a-service" business model. Dell recently unveiled an on-demand offering that lets businesses install its servers and data-center gear but pay for only the computing capacity they use — instead of buying entire hardware and software systems at sticker price. Neri shared his thoughts on Dell shortly after HPE reported quarterly results, saying HPE has been taking the lead in offering products and services based on a pay-per-use model. "People are now trying to copy us, but our differentiation comes in different forms," Neri told Business Insider. HPE had earlier rolled out its own as-a-service offering, called Green Lake, geared toward companies that have networks both in the cloud and in private data centers. These initiatives underscore the rise of the cloud, which lets businesses set up networks on web-based platforms run by companies such as Amazon, Microsoft, and Google. This also allowed businesses to scale down or even abandon in-house data centers, which had hurt HPE and Dell's business. But the two tech giants, and other traditional enterprise tech players, are eyeing new trends that are expected to lead to a boost in demand for enterprise tech gear and systems. One is the hybrid cloud, in which companies set up networks in the public cloud while maintaining huge chunks of data and applications in private data centers. The other is the multicloud, where businesses use different public-cloud platforms as well as in-house data centers. HPE and Dell are also embracing an on-demand model to offer clients lower-cost and more flexible access to their products. Neri said HPE enjoyed many advantages over Dell. "We have expertise through our services business that's unique," he said. "Obviously, Dell owns a big chunk of ownership in VMware." But he said HPE remained an important partner of VMware. "Obviously, we have our own IP," he said. He cited HPE's recent acquisition of big-data and AI-analytics companies, BlueData and MapR. "We believe we have a significant advantage in leadership in this particular market," he said. However, the market offered a downbeat reaction to HPE's results. HPE shares slipped more than 4% in after-hours trading after the company reported weaker-than-expected revenue. HPE reported a fiscal fourth-quarter profit of $480 million, or $0.36 a share, compared with a loss of $757 million, or $0.52 a share in the year-ago quarter. Revenue fell 9% to $7.22 billion. Adjusted profit was $0.49 a share. Analysts were expecting HPE to post earnings of $0.46 a share on revenue of $7.4 billion. Got a tip about HPE or another tech company? Contact this reporter via email at firstname.lastname@example.org, message him on Twitter @benpimentel or send him a secure message through Signal at (510) 731-8429. You can also contact Business Insider securely via SecureDrop.Join the conversation about this story » NOW WATCH: Here's how to escape a flooding vehicle