Breaking Analysis with Dave Vellante

What Could Disrupt Amazon? Weigh in and take the survey.SiliconANGLE and theCUBE, in collaboration with author and thought leader David Moschella, are initiating a community research project. The question we're asking is, over the course of the next decade, "what could disrupt the extraordinary success of Amazon, Google, Apple, Microsoft, and Facebook?" The first survey focuses on Amazon. Five public US-based companies have market valuations over or just near 1 Trillion dollars. As of Oct. 29th, Apple and Microsoft top the list, each at 2.5T, followed by Alphabet at 2TR, Amazon at 1.7T and Facebook (now Meta) at just under 1T - off from it’s high of 1.1 T prior to its recent troubles. These companies have reached extraordinary levels of success and power. What, if anything could disrupt their market dominance? 

Data mesh is a new way of thinking about how to use data to create organizational value. Leading edge practitioners are beginning to implement data mesh in earnest. Importantly, data mesh is not a single tool or a rigid reference architecture. Rather it’s an architectural and organizational model that is designed to address the shortcomings of decades of data challenges and failures. As importantly, it’s a new way to think about how to leverage and share data at scale across an organization and ecosystems. Data mesh in our view will become the defining paradigm for the next generation of data excellence. In this Breaking Analysis we welcome the founder and creator of data mesh, author, thought leader, technologist Zhamak Dehghani, who will help us better understand some of core principles of data mesh and the future of decentralized data management. With practical advice for data pros who want to create the next generation of data-driven organizations.

It looks like Hybrid cloud is finally here. We’ve seen a decade of posturing, marketecture, slideware and narrow examples but there’s little question that the definition of cloud is expanding to include on-premises workloads in hybrid models. Depending on which numbers you choose to represent IT spending, public cloud accounts for less than 5% of the total pie. As such there’s a huge opportunity in hybrid, outside of the pure public cloud; and everyone wants a piece of the action. The big question is how will this now evolve? Customers want control, governance, security, flexibility and a feature-rich set of services to build their digital businesses. It’s unlikely they can buy all that – so they’re going to have to build it with partners. Specifically vendors, SIs, consultancies, and their own developers. The tug-of-war to win the new cloud day has finally started in earnest – between the hyperscalers and the largest enterprise tech companies in the world.

UiPath has always been an unconventional company. It started with humble beginnings as essentially a software development shop. It then caught lightning in a bottle with its computer vision technology and simplification mantra…creating easy to deploy software robots for bespoke departments to automate mundane tasks. The story is well known…the company grew rapidly and was able to go public earlier this year. Consistent with its out of the ordinary approach, while other firms are shutting down travel and physical events, UiPath is moving ahead with Forward IV, its annual user conference next week…with a live audience at the Bellagio in Las Vegas. It’s also “Fast Forwarding” as a company, determined to lead the charge beyond RPA point tools and execute on a more all-encompassing enterprise automation agenda. 

Throughout the pre-vaccine COVID era, IT buyers indicated budget constraints would constrict 2020 spending by roughly 5% relative to 2019 levels. But the forced March to digital combined with increased cyber threats created a modernization mandate that powered Q4 spending last year. This momentum has carried through to 2021. However, COVID variants have delayed return to work and business travel plans. As such our current forecast for global IT spending remains strong at 6-7%, but slightly down from previous estimates. Notably, CIOs and IT buyers expect a 7-8% increase in 2022 spending, reflecting investments in hybrid strategies and a continued belief that technology remains the underpinning of competitive advantage in the coming decade.

Cisco is a company at the crossroads. It is transitioning from a high margin hardware business to a software subscription-based model through both organic moves and targeted acquisitions. It’s doing so in the context of massive macro shifts to digital and the cloud. We believe Cisco’s dominant position in networking, combined with a large market opportunity and a strong track record of earning customer trust, put the company in a good position to capitalize on cloud momentum. But there are clear challenges ahead, not the least of which is the growing complexity of Cisco’s portfolio, transitioning a large legacy business and the mandate to maintain its higher profitability profile as it moves to a new business model. In this Breaking Analysis, we welcome in Zeus Kerravala, Founder and Principal Analyst at ZK Research and long time Cisco watcher who collaborated with us to craft the premise of this session. All statements made regarding companies or securities are strictly beliefs, points of view and opinions held by SiliconANGLE media, Enterprise Technology Research, other guests on theCUBE and guest writers. Such statements are not recommendations by these individuals to buy, sell or hold any security. The content presented does not constitute investment advice and should not be used as the basis for any investment decision. You and only you are responsible for your investment decisions.

Buy the dip has been an effective strategy since the market bottomed in early March last year. The approach has been especially successful in tech and even more so for those tech names that: 1) were well-positioned for the forced march to digital - i.e. remote work, online commerce, data-centric platforms and certain cybersecurity plays and 2) already had the cloud figured out. The question on investors' minds is where to go from here. Should you avoid some of the high flyers that are richly valued with eye-popping multiples? Or should you continue to buy the dip? And if so, which companies that capitalized on the trends from last year will see permanent shifts in spending patterns that make them a solid long term play.

By our estimates, AWS will generate around $9B in storage revenue this year and is now the second largest supplier of enterprise storage behind Dell. We believe AWS storage revenue will surpass $11B in 2022 and continue to outpace on-prem storage growth by more than 1,000 basis points for the next three to four years. At its third annual Storage Day event, AWS signaled a continued drive to think differently about data storage and transform the way customers migrate, manage and add value to their data over the next decade. In this Breaking Analysis Dave will give a brief overview of what we learned at AWS’ Storage Day, share our assessment of the big announcement of the day – a deal with NetApp to run the full ONTAP stack natively in the cloud as a managed service – and share some new data on how we see the market evolving. 

Tech earnings reports from key enterprise software and infrastructure players this week, underscore that IT spending remains robust in the post isolation economy. This is especially true for those companies that have figured out a coherent and compelling cloud strategy. Despite COVID variant uncertainties and hardware component shortages, most leading tech names outperformed expectations. That said, investors weren’t in the mood to reward all stocks and any variability in product mix, earnings outlook or bookings/billings nuances were met with a tepid response from the street. In this Breaking Analysis Dave will provide our commentary and new data points on key technology companies including Snowflake, Salesforce, Workday, Splunk, Elastic, Palo Alto Networks, VMware, Dell, Pure Storage, HP Inc. and NetApp.