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Marvell Industry Analyst Day 2021: Key Takeaways & Announcements – Futurum Tech Webcast Interview Series
by Daniel Newman | December 15, 2021

On this episode of the Futurum Tech Webcast – Interview Series, I am joined by Nigel Alvares, Vice President of Solutions Marketing at Marvell for a conversation around Marvell’s recent Industry Analyst Day. It was a great recap of the event and a conversation you don’t want to miss.

Marvell Industry Analyst Day 2021

In our conversation we discussed the following:

  • Highlights of recent company growth and momentum going forward
  • A recap of Industry Analyst Day
  • Marvell’s thoughts on future development of various technologies including 5G, cloud networking, and storage solutions
  • What’s ahead for Marvell and why customers should be excited for the future

If you want to learn more about some of Marvell’s announcements from Industry Analyst Day check out this great recap my colleague Ron Westfall put together.

Watch my interview with Nigel here:

Or listen to my interview with Nigel on your favorite streaming platform here:

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Disclaimer: The Futurum Tech Webcast is for information and entertainment purposes only. Over the course of this webcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.

Transcript:

Daniel Newman: Hey everybody, welcome back to another episode of the Futurum Tech Webcast. I’m your host, Daniel Newman, Principal Analyst, founding partner at Futurum Research. Excited about this episode. It is part of our interview series, and we are going to have Marvell Technologies, an absolute meteor right now in the semiconductor space and the tech space, playing in all kinds of interesting secular areas, from cloud to 5G, to automotive and more.

Excited to have Nigel Alvares. He’s the Vice President of Solutions Marketing and he’s going to join us following the company’s Industry Analyst Day, IA Day, a day, where the company presented a whole lot of information on their products, services, and where they are heading.

Now, before I bring Nigel on the show, quick disclaimer, this show is for information and entertainment purposes only. And while we will be talking to executives from publicly traded companies and about those companies, please do not take anything that I say or that our guests say as investment advice. Thanks, Marvell for bringing Nigel and making him available to chat with me today and without further ado, Nigel, welcome to the Futurum Tech Webcast. How are you?

Nigel Alvares: Hey, Daniel. Great to be here. Thank you.

Daniel Newman: Yeah. Excited to have you here. We’ve had a lot of chances to talk the last few weeks. You’ve had a ton of stuff going on. Now, some questions. Mostly, we’re going to talk about your Industry Analyst Day because that was a pretty big day. A lot of announcements, always exciting to hear what is going on. And like I said, meteor, rocket ship, the company has been on absolute fire. And we’re going to talk about that too. Now, since I think it’s been a while since I’ve had you on, or I’m not sure if you’ve been on this show, so for our audience and everybody out there, why don’t you just do a quick introduction? Talk a little bit about the work you do at Marvell Technologies.

Nigel Alvares: Yeah. So at Marvell, I lead the solutions marketing, which really consists of working with all the business units and bringing their positioning messaging in a holistic manner. Targeting our key end markets, which is really focused on data infrastructure spanning cloud, data centers, 5G carrier, enterprise networking, and automotive. So I work very closely with them on their strategies, their go to market, and product launches and strategies. So, that’s my main role.

Daniel Newman: That’s main roles. You need to put an S at the end of that because you’re carrying a lot and that’s great because there’s a lot to carry right now at the company. So you hear me mention company momentum. I’ve been tracking. You guys have had a series of pretty interesting moments over the past several weeks. You had an investor day, you had an earnings result that was kind of absolute blowout, I guess is the word I’ll use. You might have seen my coverage on Market Watch, where I alluded to the fact that Marvell is no longer an, “Also-ran,” in the semiconductor space. It really has become a company that if you’re in this space and you’re looking for the fastest growth and most exciting plays, hard not to be in Marvell.

And then of course the Industry Day is where you went over the bridge from all the financial and all the money. And you went over to the underpinnings of the money. And this is where really, you spend your time. The products and services that develop all that interest and excitement and drive that share price up. But talk a little bit about what you’re seeing in your role, just the overall company momentum and the business growth.

Nigel Alvares: Yeah, it’s been an amazing transformation we’ve experienced. When I joined the company about five years ago, we were really in the process of reinventing the company, right? And transforming the company and really put a strategy together to focus on data infrastructure. And our leadership team led by Matt Murphy really took a very careful and very focused path to put us in this position we are in today, right? So we were really selective and deliberate on our strategy. Very calculated on organic investments, our divestitures, and then the acquisition strategy. And that really has put us in a very strong position today and its credit to all the employees to go through this transformation and work relentlessly.

And as you just highlighted our Q3 results that we announced last week were really, I would call it a watershed moment for the company. We delivered record revenues of 1.21 billion, which is really 61% year over year growth and 13% sequential growth. And that was led by growth across all our markets. So it’s been a phenomenal run and we’re just getting started, is our opinion. The world is really going more and more data driven and we’re right in the middle of it, right? With the backbone of that infrastructure.

Daniel Newman: Yeah. And let’s just break that down a little bit. You can definitely check out more of this on my earnings coverage, and I’ll put that in the show notes. But you kind of broke down your revenues: data center, enterprise, carrier, automotive of 41%, 20%, 18%, and 6%. So you’re in these four secular areas that all have a lot of momentum. And there’s crossover, but you saw your cloud business, 109% growth. You saw your enterprise business, 56% growth. You saw carrier grow by 28% and then automotive had a huge growth, 114%. So while a smaller business, really, really tremendous growth.

And the automotive space has so much momentum right now. And Marvell’s one of those companies that’s playing an important role, but not necessarily always getting credit for it. So let’s pivot over to the Industry Analyst Day though itself. This was a day that you really played a big pivotal role. A chance to get in front of a number of the leading analysts that are covering the technology. Tell them your story. Set that day up for me. What were you guys so excited about? What was the focus and the outcomes you guys were looking for?

Nigel Alvares: Yeah, I think this was our third analyst day, Industry Analyst Day. And it’s been a journey for us as similar to our transformation as a company. We’re on a transformation from a marketing perspective as well, right? We weren’t very public in the past with our strategies, our products, our roadmaps. So we’ve been working on that over the last three years. And I would say over the last two, we made a lot of progress. We acquired two big acquisitions: Inphi and Innovium. To really accelerate our strategy and complement the pieces we’ve put in place from an organic and acquisition perspective. And this Industry Analyst Day was really meant to focus on how those assets and companies have come into the fold to give us the most comprehensive portfolio for data infrastructure. And when we say data infrastructure, I talked about 5G, enterprise networking, data centers, and automotive, but there’s a big trend and dynamic happening right now where all these data infrastructure markets are converging and leading into the cloud.

And those two acquisitions we made this past year, were really focused on the cloud side of things. Inphi with the electro-optics, where they’re best in class, leading the charge. And Innovium with a cloud optimized switch portfolio. And now if you put those pieces under the umbrella of Marvell with our storage, our security, and our compute product lines, we have the industry’s broadest and most complete portfolio for this dynamic of the cloud era and the data era that’s actually going to lead us to the intelligence era with artificial intelligence going on. But it’s all leading into the cloud world and what’s surprising to a lot of folks that they don’t realize. Every cloud is unique. They’re not built and architected similarly. Each of these clouds actually are specializing and optimizing for different services and different capabilities to give their customers. And this is driving a phenomenon that we call cloud optimized silicon. And we’re uniquely positioned with all these assets and products that we’re developing. So that was a big theme of our Industry Analyst Day.

Daniel Newman: Yeah. So, a couple things just for everyone out in the audience, you mentioned two big acquisitions: Inphi and Innovium. One was really all about optics and networking and high speed. And then the second one was really all about optimizing for cloud scale, which was Innovium. And the Inphi one not only was big, but I think it was the biggest acquisition ever done by Marvell if I believe. Somewhere around 10 billion. So that was a really big move, but they both are because one was going to really accelerate the company’s story for working with these hyperscale cloud providers. And so, as you mentioned, and you sort of alluded to in what you said is about, cloud specific or cloud optimized. Is you’re hearing different things, both being done. As if you’re an enterprise you’re hearing about is optimization, that’s being done at the services layer.

So you’re hearing about things like network oriented instances, or you’re hearing things about storage oriented instances, or you’re hearing things about security. And underneath that there is silicon, and that silicon is enabling that. So when you’re hearing about this new instance that you can spin up, that’s really all about optimizing for data or optimizing for storage. What you’re not hearing about is a company like Marvell. And this is where all the growth is from is providing that optimized silicon to a number of these hyperscale growth providers or to these data center providers that are wanting to build out compute and capabilities to be able to deliver that.

So, hopefully that just reiterates what Nigel, what you were saying there. So what I was hoping you could do also is just kind of break it down, because I’m a big trends guy. I like to talk about secular trends. I mentioned automotive early on. Super exciting growth area, but you guys are in a number of them. For instance, your guys are playing in 5G, you’re playing in cloud. And then of course, like I said, you’re playing in automotive. So maybe just do a little breakdown for me of some of the exciting areas that you’ve focused on at Industry Analyst Day for those different areas.

Nigel Alvares: Yeah. So let’s start with 5G. So 5G, there’s a lot of hype and discussion in the marketplace. And what’s interesting about it, it’s still in the early innings. China and APAC, Korea and Japan really led the charge of 5G a couple years ago. And now you see the rest of the world, North America, Europe catching up, and that’s been a big tailwind to our business as we’re enabling key partners like Nokia and Samsung who are providing the infrastructure equipment for these companies. Now, the other dynamic that’s occurring with 5G is the 5G capabilities and features are enabling new types of services like private 5G for industrial manufacturing, for telemedicine. And that actually tailors back to my earlier point of everything leading back to the cloud, because the cloud, now you have this term called virtualized brand. Where you take a generic server and you virtualize it and provide RAN services. And why you want that is to have elasticity for demand, right?

So when you have a popup going up at a stadium where there’s a lot of people and you’re doing all these types of services, you want to turn on the RAN capacity, right? Now, what’s cool about that is Marvell’s RAN technology, and this is base band and compute technology from the Auction TPU product line is been powering traditional RANs for over a decade. And what we’re seeing is folks in the cloud are looking to leverage our RAN technology to build virtualized RAN infrastructure with accelerator cards. And at Industry Analyst Day, we spoke about what we’re doing there and why our solution compliments be it ARM or x86 servers with accelerated RAN capabilities. That it’s a big dynamic we’re seeing right now. And it’s going to take years to play out for vRAN. But what we’re excited about is you’re seeing the design win activity. You’re seeing the ecosystem spun up. And I think that’s a great thing on the 5G side. Now, switching gears or anything you want to add on that or ask me on that, Dan?

Daniel Newman: No. I think you hit it on the head. Let’s jump into automotive because I think that’s an area a lot of people are pretty excited about.

Nigel Alvares: Yeah. Now automotive, as you highlighted has been a huge growth driver for us. This last quarter we surpassed 140 million run rate, annualized run rate revenue, which is significant for us. And to date we’re solely been supplying chips for automotive ethernet. So inside these vehicles, a lot of people talk about autonomous vehicles, software defined vehicles. There’s a network in these cars. Traditionally, it’s been a very proprietary connection between sensors and the infotainment and all those different pieces. But as you start moving to this more autonomous and more software defined vehicle, they’re moving to a standard network. And that standard is ethernet. And Marvell’s been investing over the last five years in automotive ethernet, and have gotten significant design wins. And when you hear people like Nvidia or Intel talk about their compute engines, we’re connecting those compute engines to the sensors, to the other elements.

And last week, as we announced the industry’s first camera to ethernet bridge, now you can take a camera video and put that on ethernet network. And that’s part of our Brightlane brand that we launched last week. So this has been a significant growth driver. And when I talk about software defined vehicles, that’s a term that’s just starting to emerge, but think of when you buy a vehicle, you get certain features that come with it. Traditionally the vehicle hasn’t changed. But now with this software defined paradigm where you have compute elements in the car, you’ll be able to actually get new services and new features as they come to market. So that’s another connection back to the cloud where the cloud will be giving you the services or the features, and you download. Just like a smartphone, how we download apps on a smartphone, think of your vehicles becoming like that in the future where you’ll be having apps and new features.

So that’s super exciting, because again, it goes back to what I started off, the convergence of cloud, 5G, and automotive, and our technology’s tying that all together. So super excited about that. And last point on this, we announced our first custom compute design win for the Brightlane. So that’s where we took our compute engines and worked with an OEM to actually develop a custom solution. And why you say custom? People want to differentiate. They don’t want to buy off the shelf components. They want to differentiate and add value and control their destiny. So that’s a new paradigm and a new growth engine for the company as we move forward, is this custom compute in automotive.

Daniel Newman: Yeah. And to be clear, some of what you were suggesting is starting to become available in what are considered to be these disruptive vehicles, right? I mean, you’re seeing how, like if you’ve driven a Tesla, the experience that people mostly like, but that people have gotten really accustomed to with apps and real-time updating. And you turn in your car one day and then you do an update, you turn it back on and it looks… It’s like a computer. Well, after you update it, you see a new feature, a new application available, a new service. I mean, this is what the future of the car is going to be like. It’s going to be like your mobile device. It’s going to be like your laptop. You update it and the more connected it is, the more high speed it’s connected.

We’re going to see that going from something you do in an update to something that’s literally going to be happening as you’re driving. A new service will come up, a new feature, a map is going to reload and change. I mean, we’re already seeing little services like, people are reporting traffic or accidents in real-time and how that already can change a mapping. The information and services, and this is going to be driven by EDGE. This is going to be driven by real-time data. That’s going to be driven by AI. And of course, onboard processing capabilities. You’re going to see so much more of this, but all the networking and connectivity is everything in terms of actually making those things happen.

Nigel Alvares: Absolutely. Spot on Daniel.

Daniel Newman: Good. I’m glad when I get it right. So, let’s end up talking about the cloud. There’s a couple of bigger things that I noticed. You talked about switching, optics, and storage. Why don’t you just give me the whole rundown because cloud is of course a huge trend that I think Marvell is not necessarily, even as much credit as you have been getting, doesn’t get enough credit for the role you’re playing in that space.

Nigel Alvares: Yeah. And I think this one is an interesting one, right? We all know the clouds growing gang busters. You’ve seen all the public announcements from those companies and their infrastructure is about providing services and the capabilities to do more and more, right? And what that does and drives from an infrastructure requirement perspective is more bandwidth, more compute, more storage, and then security to keep everything cool, right? No vague or rogue type of stuff going on, which is critical going forward. And Marvell has been providing the key building blocks for each of those. Starting with the electro-optics we acquired from Inphi. Inphi has been innovating in this area for the last decade and has a leadership position with each of the cloud hyperscalers in the marketplace. And this is really for connectivity inside the data center and outside the data center.

What people don’t realize is, Daniel, you and I are generating data right now. That data is going into the cloud. And in the cloud, they’re actually analyzing that data to create more data. We call it metadata or data about data, right? And that’s actually driving more and more data inside the data centers. So the actual bandwidths required inside the data centers is growing exponentially. And that’s driving a ton of infrastructure requirements. AI being another key driver of that, where they’re trying to figure out, hey, Daniel likes that team. So I’m going to serve that ad to them or serve that service to them, right? So, that’s driving a lot of us and the electro-optics is playing the key place of the connectivity. Storage, as you can imagine, you have to store all this ton of data, right? And there’s high capacity storage where you have your pictures and my pictures that we’re looking at maybe periodically.

So they go into a more cold storage type of element where we’re providing HDD controllers. And we are proud to announce this week we shipped our fifth billionth controller. Five billion HDD controllers, right?

Daniel Newman: Five billion.

Nigel Alvares: Yeah.

Daniel Newman: Just pause there. Five billion.

Nigel Alvares: Yeah.

Daniel Newman: I’ll take five billion pennies.

Nigel Alvares: And that’s a remarkable accomplishment for Marvell. And that’s what people don’t realize. This company was founded on storage. That’s what actually got the company on the map. And then we’ve evolved to grow into all these different area. So really proud of our storage team on those innovations they’re driving and continue to drive. Along those same lines in storage, we’re also doing SSD controllers. It was a business I managed when I joined Marvell. And in that area we’re doing, do it yourself SSDs, where the cloud makers can take our controller technology, collaborate with us and then roll out storage solutions that are optimal for their infrastructure and optimizing what they can give to their client base, right?

As you highlighted earlier, their customer base wants different types of optimizations and services, so that’s another area we’ve been really innovating. And then last but on least is been the custom side of this business, right? Where we’ve actually taken all these different pieces and worked with each of these cloud makers to develop custom optimized solutions using our standard IP blocks, as well as taking their IP blocks and maybe third party IP blocks and putting together an optimized solution for their infrastructure. So a lot of, a lot of momentum in that business, that’s driving our growth and revenue today, but more exciting is actually new design wins that are going to drive future revenues in the next two to three years.

Daniel Newman: It’s one of the luxuries of being a provider to the provider. When you’re providing and they’re growing and the demand is growing and the overall TAMs are growing. And that’s probably one of the things that I thought weighed in my opinion about how there’s a pretty significant long tail of trajectory for the companies. Because you’re attaching and you’re not just winning based upon some sort of cyclical or momentary trend. Cloud is not momentary. Everybody wants to look at that in a kind of… I love when people are talking about cloud market share. It’s like, look, everybody can grow because the cloud is growing so much. And of course the definition of cloud is changing. 5G is still in pretty early days. It’s not at all in its latest days. I mean, you’re still talking about, despite the fact that now most of us probably have access to a 5G device.

If you’re in the US, in any major market and you upgrade, you may very well be on a 5G device. But the whole application, when you’re talking about 5G, fixed 5G, connectivity, 5G connected vehicles, 5G always connected PC, and all the different things that are going to tout the reliable throughput of 5G. We’re still in the early days. Automotive, I mean we’re super early days for the automotive connected vehicle trend. We just think we’re not because we read about the Teslas and Rivians and Lucids. That’s a very small percentage of vehicles. And even all the design wins we’re hearing about: next generation ADAS, next generation telematics.

These are three, five, seven year design pipeline wins where yes, companies have been selected to provide silicon that’s going to change these vehicles. But you’re talking about models in 25 and 27 and 29 because that’s how far in advance. So there’s still a lot going on and a lot of opportunity. And of course, a lot of growth. By the way, I shared something the other day with the Intel Mobileye announcement. I think there’s a stat out saying now that the BOM on a vehicle in the next decade, by 2030, 20% of the cost is going to be semiconductors.

Nigel Alvares: Yeah, I know. I saw that and it’s definitely happening. I can tell you right now, what we shared at IA Day was we have design wins for our automotive ethernet that spans $5 to $10 for let’s call it a high volume type of vehicle for just ethernet connectivity switches. And then if you go to the next generation automotive companies that got a Greenfield architecture, our spend of automotive design wins is actually content anywhere from 50 to $100. So you can actually see that trend as you start to move to these new architectures, the semiconductor content is definitely going to be a big percentage of the BOM.

Daniel Newman: Absolutely. Which is exciting and something that Marvell among others will have a huge opportunity to benefit from. All right. So let’s wrap this up. Overall, as you’re looking ahead, what do you see? What should the market, the industry, your partners be most excited about around Marvell?

Nigel Alvares: I think what we’re super excited is the data continues to grow and the need for infrastructure continues to grow. And we believe society to advance needs better infrastructure. And we’re so super excited to be working in an open collaborative manner with the key players to enable this future, right? And as we highlight in this whole conversation, be it automotive, be it 5G, I didn’t even touch upon the borderless enterprise. What we mean by borderless enterprise is now, not everyone’s restricted to going into the office to do work, right?

We’re working from anywhere and that’s starting to create new types of architectures for the enterprise. So each of these pieces is growing and is exciting. And then to me, the biggest thing I see from a Marvell perspective is they’re converging together.

And having all these different building blocks gives our partners and the whole ecosystem opportunities to innovate and optimize. Because to really scale where we want to go, we didn’t even touch upon metaverse, omniverse, all these verses coming out. That’s going to be another leg in the stool of this data, infrastructure world. And I’m just super excited that we have all the people, the assets from a technology and IP portfolio to really enable this future. And we’re excited to work with people. So, anyone who’s listening here, please reach out and see how we can collaborate. I think that’s the most exciting part is we want to collaborate, right? We know this can’t be done by one company, right? It has to be an open manner.

Daniel Newman: Well, there you go. That’s the last time I’m bringing you on the show. You didn’t pay for a commercial. No, I’m just kidding. No, that’s actually exactly how I was going to ask you to end this show. Is say, Nigel, where do you want people to go and learn more? And it sounds to me like the Marvell story is growing through collaboration. And if that’s one of the key takeaways I have paying attention, watching Investor Day, Analyst Day. And of course, listening to Matt Murphy’s recent comments. And by the way, you can check out Matt’s episode. He joined me on Making Markets as well, right here with Futurum.

He really has been outspoken about the importance of collaboration up and down the technology ecosystem with so many providers. So many companies are building on Marvell and in many cases, because you are sort of enterprise and you’re the magic behind the magic, people don’t always know that. And that’s one of the things I always like to get out there. So Nigel, I want to thank you so much for joining me here on the Futurum Tech Webcast. You’re a great guest. You had a ton of inputs there and info. I’m sure you rehearsed quite a bit, not for my show, but for an Analyst Day. So hopefully that made it easy for you to come on and chat to me.

Nigel Alvares: Yeah. No, thanks for having me, Daniel. Greatly appreciate it.

Daniel Newman: All right. We look forward to having you back soon. I’m going to close up shop here. So, hey everyone. Thanks so much for tuning in. Nigel was a great guest. I hope you got a lot out of that. Understanding the company a lot better. There’s a lot going on at Marvell. I’ll put some notes in the show notes about the Market Watch piece I wrote. We’ll put some links to some of these stories out there, including Ron Westfall’s piece on the Industry Analyst Day. And we hope you hit that subscribe button and join us again for this episode of the Futurum Tech Webcast. I got to say goodbye. Thanks again for tuning in. We’ll see you later.

About the Author

Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio