Link: The Server Market Booms, And It Could Last For A While

“Datacenters certainly came to the fourth quarter of last year hungry, and according to the latest statistics from IDC, they consumed 2.84 million units of iron, a 10.8 percent increase over the prior year’s final quarter. Thanks to IBM’s big bump up with System z14 mainframe sales and to a general trend of buying beefier boxes for hefty machine learning, analytics, and HPC workloads (admittedly but a slice of the server shipment pie), revenues for those servers shipped rose by 26.4 percent to $20.65 billion. This is the first time ever that server sales broke through the $20 billion barrier, and after IDC finishes restating its ODM server revenues for the first quarter of 2017, it is likely that it will report revised sales for all of 2017 to kiss $67 billion. Over that same period, Intel’s Data Center Group will account for $19.1 billion in sales and $8.4 billion in operating profit, just to give you a sense of the chip giant’s slice of the pie. If you are generous and assume that there is a 10 percent operating margin on servers – and that is because big iron NUMA machines and mainframes bring up the class average bigtime even as the ODMs do maybe 5 points of profit at best – that is a potential operating profit for the server industry of around $7 billion. If that is close to reality, then Intel will have around 27 percent of server revenues passed back to it by its OEM and ODM partners as a cost for compoents. If you add Intel’s profit to the server industry’s aggregate profit, and then add in the profit for memory and flash makers, Intel could account for 40 percent of the profit and as much as 50 percent back when memory and flash cost half as much as it did a year ago.”
Original source: The Server Market Booms, And It Could Last For A While

Cloud service providers in their many forms drive an astonishing 35 percent of server CPU revenues for Intel, and these customers are the first ones to drive the company to offer customized chips. This year, 23 percent of server CPU chips bought by cloud service providers will be custom, and Intel expects it to be more than half of server chips purchased by cloud companies in 2015. Intel has roughly 100 standard Xeon and Atom SKUs at any time, but this year did 35 custom SKUs on top of that, compared to 15 custom chips a year ago.

Cloudera’s $740m Intel relationship

Mike Olson of Cloudera on the Intel relationship:

It genuinely is true that the important story here is the commercial relationship we’ve crafted with Intel. We go to market together, and that’s fantastic for us both—we reach many more customers directly and through our partners. We build better software that takes advantage of Intel silicon innovations, and get it into the open source sooner. Our customers get the best product earlier and get more value from their data.

And then Matt Asay to drive the point home:

By claiming $740 million of Intel’s money, Cloudera now has its attention in a big way. The cash is nice, but it’s the relationship that matters.

The official Cloudera press release on the $900m round puts Intel’s stake at 18%.

Also, Matt Aslett over at 451 has an analysis on who Cloudera might acquire with that pile of cash:

While we expect Cloudera’s M&A strategy to be driven by products that complement Cloudera Manager, we also see opportunities for the company to purchase vendors and technologies that complement the core Hadoop distribution. At this level, we are not talking so much about Cloudera wanting to ‘own’ Hadoop-related projects in the traditional sense, but to boost its own talent in key areas as well as bring its resources to bear to accelerate adoption.

Cloudera’s $740m Intel relationship