On this episode of The Six Five Webcast hosts Patrick Moorhead and Daniel Newman discuss the tech news stories that made headlines this week. The six handpicked topics for this week are:
- Google Cloud Next
- Dell Technologies Summit
- Cambridge Quantum Announced the Release of the first Quantum Natural Language Processing Toolkit and Library
- Movandi mmWave Automotive Test
- ServiceNow Rolls Out ESG Solution
- Deviceapalooza: Samsung, Apple, Google
For a deeper diver into each topic, please click on the links above. Be sure to subscribe to The Six Five Webcast so you never miss an episode.
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Disclaimer: The Six Five 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.
Daniel Newman: Hey, everybody. Welcome back to another edition of The Six Five Podcast, episode number 98. Getting close to 100, Pat. And when we get to 100, it’s going to be celebration time. We’re going to have to think of something really interesting. And we’ve only got two weeks to think about it, and we’ve got a really busy two weeks ahead.
Anyhow, I’m your host, Daniel Newman, principal analyst, founding partner at Futurum Research, joined by my esteemed colleague, number one analyst in the world this week, Mr. Patrick Moorhead of Moor Insights and Strategy. I know. I’m sitting at number two. I’m bitter about it. You can see it on my face. If you’re listening to the pod, I just smiled. I can take it in stride, Pat. You are an impressive feller.
Patrick Moorhead: I don’t really know where to start other than thank you, and this is my favorite time of the week. And you and I rolled in, I don’t know, at midnight last night, but here we are, prodding away, doing what we love to do. But it was a fun trip to Raleigh, got a lot done, and met with a lot of people. And it was nice to take a trip. And I especially loved the hotel I was at.
Daniel Newman: Well, are you talking about the hotel you stayed at or the hotel you visited at? Because it wasn’t the same, but it was a really nice trip.
Patrick Moorhead: It was a nice trip. Yeah. It was actually nice to get out, and get out on the road.
Daniel Newman: It was. And for everyone out there that’s wondering, “Well, what were you doing out on the road and why were you two together?” Well, I mean, the show has to go on, but yeah, Mr. Patrick and I went out to visit our friends and client at Lenovo, and we did some work helping them kick off an event that’s coming up, talking about some big, big issues across the tech sphere. You’ll have to wait for that to come out live. I’m sure it will be a very fun opportunity for people to witness Pat and I getting deep on all kinds of different topics. And then we saw our friends from a number of different companies, including more Lenovo folks, folks from Red Hat, SAS, Splunk. Got a lot done, considering we really were only on the ground like 24 hours.
Patrick Moorhead: Yeah. Less than. That’s the way to do trips, though. You get in, you get your stuff done, and you get out, you smell maybe one rose, and then you bolt.
Daniel Newman: And we did good. So this is a really busy week in tech. We’re going to cover Dell Tech’s big event, the Dell Tech Summit Unplugged, Google Cloud Next. We’re going to talk about a new announcement from Cambridge Quantum Computing, CQC, and Honeywell. Movandi, an interesting startup. Pat, you’re going to talk a little bit about that. A big new announcement from ServiceNow in the ESG space, which will come up a few times today. And then we’re going to kind of lead into a busy week ahead. We’ve got a crazy few weeks in tech between earnings, but another thing is with devices, there’s going to be some big announcements coming out the next week, and we are going to dive into those.
Now, for anybody that’s listening to us for of the first time, and I hope by episode 98, this is not your first time, but The Six Five was created under the onus of six topics, five minutes each. We usually go a little bit longer than that. More analysis than news. We basically take the news, we tell you what you really should know about it and why it’s important, so it’s about analysis. And just to kind of do the little disclaimer thing, this show is for information and entertainment purposes only. So while we will be talking about publicly traded companies, you’ll see tickers flashing across the screen, please do not take anything we say as investment advice.
All right, Pat, are you ready?
Patrick Moorhead: I am ready. Let’s dive into the first topic.
Daniel Newman: All right, Pat. This one’s you. I got to do most of the talking in the setup. You get to start the talking here. All I ask is leave me a little bit. Leave me a little bit. That’s the joke, by the way, for everyone out there. Sometimes we just get passionate and then the other person’s like, “Yeah. I got nothing. Let’s go to the next topic.” But Google Cloud Next, lots to talk about.
Patrick Moorhead: Yeah. There was so much that went out at that show, there’s definitely not a possibility of me taking all the oxygen out of the room. So if you are counting this from home, Google Cloud is a combination of IaaS, PaaS, SaaS services, including collaboration and even productivity, with things like Google Workspace. So they’re a very broad vendor, and I believe that they’re sitting at around number three or number four if you combine IaaS and PaaS. And their growth is pretty spectacular. They’re not making a profit yet, but they are narrowing their losses very quickly.
And instead of kind of rattling through the news, I want to take away some of the key themes that I walked away from. So first of all, it was the diversification of customers. So everybody would understand why, let’s say, a cloud native company might work with Google Cloud, because Google Cloud is awesome at a certain set of things. They’re probably best at kind of the newer type of software out there. But recently, I would say in the last couple years, they’ve really embraced meeting their customers where they are. And whether that’s supporting customers with SAP, with even things like Windows Server, and things like that.
So what they did is they rolled out some traditional companies, companies like Walmart, General Mills, Wendy’s, Siemens Energy, Deutsche Post, DHL Group out there, I think to really show people, hey, as opposed to just landing and expanding, where they’ve done pretty well on the data and AI, some of these customers. You can’t say a company like Walmart, “Walmart’s all in,” right? Because they’re such a big shot, but bigger than just landing and expanding on data and AI. And I did walk away, and I think Thomas Kuriaan was very influential in the way he rolled this out, that Google is definitely signing up more traditional customers.
The second thing I walked away with was that Anthos and its hybrid capabilities are, they’re serious about it. Even though they were one of the first movers in hybrid, I think they were right after Microsoft and Azure stack, they really didn’t talk too much about it. And I was thinking, “Are they really serious about this, or aren’t they?” And then I saw AWS’s Outpost just doing announcement after announcement, and bringing the full stack in, and I will talk about one announcement in particular, the Google Distributed Cloud. And it has an offline mode very similar to what I think you and I like about Oracle’s cloud customer offering. So for instance, with Outpost, you have to be connected. So if you’re out on an oil rig, you lose connectivity, and you need to keep the business going, this is why these types of things are important. And there are certain countries where you legally have to have an offline mode. So I did think this was a pretty big deal.
And then finally, Google Cloud came out with some interesting security offerings. The Google Cybersecurity Action Team, and while I can’t stand the name, it’s essentially an entire advisory team leveraging Google, what I consider a best in class security capabilities. This is exactly what the company should be doing, because they’re good at it, and hats off to them for it. And they also came out with a Work Safer program, which is kind of the, it’s a full stack solution that’s fully integrated for collaboration and workspace applications. So good stuff from Google Cloud Next.
Daniel Newman: Yeah, absolutely. Going through the announcements, I think they covered a number of the big thematic secular trends for the cloud, right? Making work easier, making work more secure, addressing the massive data sprawl, edge to cloud. Of course, they had some interesting announcements related to sustainability. Couple things that really caught my attention was one, you mentioned the distributed cloud. The Cloud@Customer is what Oracle calls it, but we knew Google, we know all the public clouds need to really address how do we put the cloud on prem for customers, give them that consistent control plane, and enable them to scale their business on prem, in the cloud, meeting all those different regulatory and compliance spaces, Pat.
The Tableau partnership was really interesting. Of course, all these companies are competing more and more. So they announced a big partnership to bring Tableau, the BI experience, basically seamlessly, to be able to pull in data from big query.
There was a few other interesting partnerships, Pat. One with Citrix for hybrid work, I thought was another one that drew my attention. Citrix is a company that’s definitely in flux right now. These kinds of partnerships are going to be really important to it building stability and building growth. But the overall workspace, you’re talking about roughly three billion users that touch Gmail and Google in some capacity. That’s massive. And that’s a huge opportunity for Google to continue to diversify and build. They had some new low code offerings, like in AppSheet, so that was big as well, and that caught my attention.
And the last thing, Pat, you didn’t really touch on this. I think this was the oxygen you really left for me more than anything, was they came out with this whole carbon footprint, which is essentially now a no-charge solution in the Cloud console that allows companies to be able to report on their carbon emissions using Google Cloud platform usage to measure, track, and report progress against climate goals. And you and I have talked online, behind the scenes, different places. We know ESG is going to be important to companies. The exact importance, the exact way different companies are going to use it to build competitive advantages will be different, but the technology to be able to monitor and manage it is going to be critical because this isn’t something you’re going to be able to audit in a notebook.
All right. So we’ll call it a day. Good week for Google Cloud. It’s a challenge. Now that they’ve been dropped to four on Gartner’s list behind Oracle, they’re going to have to fight that fight uphill.
Speaking of cloud, speaking of big shifts, transformations, let’s talk about a company that’s making some big moves right now, Dell Technologies, Pat. They had their Summit Unplugged this week, and it was a really good event for us as analysts. It’s got a lot of exposure to the executive team, and it came at a good time.
And I’ll set this up by saying that Dell Technologies right now is in a big inflection point. It’s a big moment for the company. Financially, it’s about to get a whole lot better in terms of its debt structure with the spinoff of VMware, but let’s be candid. The spinoff of VMware also raises a ton of question marks about the company’s long term cloud strategy, because VMware has been really its most pivotal solution to enable Dell to stay hyper-relevant.
The company had a few announcements, Pat. I don’t want to spend a lot of time here. You and I have written articles, I’ve got an article up about they’ve got some new edge solutions, some telco solutions, and we’ll put the links in the show notes, and if you want to read about their new announcements. But really what interested me was, we as analysts got some real behind the scenes. We had four of their key executives, and we also had some time with their CFO, Tom Sweet, and we got to hear from Michael Dell extensively.
And listening to the company, Pat, and this is something I’ll talk a little bit about, and then I want you to weigh in on. But what I really sensed is the company understands its need to pivot right now, and its need for its apex solutions, which are its consumption-based prem cloud solutions competing with the likes of HPE GreenLake, competing with the likes of Cisco Plus, Lenovo TruScale. And also, of course, with 75% of workloads or so still being on-prem, really competing with the AWSes, Google Clouds, and everyone else, Microsoft Azures, to sort of gain the balance of being able to deliver services, for whether it’s storage … Right now, it’s mostly storage for Dell, but it could be storage. It could be compute. It’s going to be data services. And you know the plan is going to be for apex to expand.
Michael, Jeff Clarke, the executive team, spent a lot of time talking about multi-cloud, talking about the fact that they all believe multi-cloud is the future. You know, what was kind of interesting about that, as I see it, Pat, is the more the conversation shifts from hybrid to multi, the one big iteration for me, as I see it, is when it’s multi, the OEMs or the big IT infrastructure companies suddenly become more compelling. When it’s hybrid, I tend to think the big public cloud companies tend to be more compelling. Because if it’s really you’re dedicated to one cloud, then kind of making it extensible to your prem, it may be expensive, and we’ve seen some debate on how expensive it is in egress, but it’s the control plane, the consistency is very attractive.
When suddenly, though, you’re managing multiple public clouds concurrently, the story starts to go, “Okay, maybe we need a more universal control plane that’s not from any of the public cloud, but actually from the company that’s going to handle the majority of the workloads,” which again, aren’t actually in the public cloud. And that’s where Dell Technologies Apex story, and others. That’s where it could be IBM and Red Hat. It could be GreenLake.
A lot of these companies become super interesting if multi-cloud is, in fact, going to win the day. And I think you and I have said this, Pat, and you’ve got a lot of documentation years ahead of kind of identifying this. And I’ve said a lot of this too, is multi-cloud will be more prevalent, and it will come up in scale. So I feel like we’ve got about a 10 horse race right now. I think you can’t count Dell out. It’s got a huge kind of bespoke business of this consumption-based service that it’s been delivering on a very custom and one-off basis, and now it’s streamlining it, and it’s a multi-billion dollar business for the company and they’re going to make it easier.
Michael Dell is a person you never underestimate. Without VMware, I still have every confidence between the partnership they’ve created with VMware and their current product mix that they will build solutions, and they have a massive, massive sales force and customer base, and they will be tapping into that as well. So it’s good to see Dell leaning in. There’s a number of competitors in this space, but that was my feel from this event, was really the direction they were going.
Patrick Moorhead: Yeah, Daniel. Good analysis. 10 years ago, my firm talked about, at the time, we called it private cloud and hybrid cloud. We took a lot of barbs for it, but here we are almost 10 years later, and hybrid is a reality. We’re having the same types of discussion about multi-cloud, and a lot of the consternation comes from the definition of it. So is it running the same application in multiple clouds? Is it running different applications in multiple clouds, or different services in different clouds? And on one hand, I think the traditional on-prem vendors try to simplify it and say, “If you use Salesforce, you’re multi-cloud.” I don’t buy that, and I also don’t buy the far other side, which says that you’re a fool for even considering multi-cloud I’m in the middle.
One thing I’m waiting for, though, is truly a bunch of customers to come up and show us their multi-cloud architectures. I’ll tell you right now, in Box’s analyst data that they had, they are using five different cloud back ends, including their own. They are 100% multi-cloud. Now, that’s Box, and they’re a SaaS provider. They’re a little bit more sophisticated, but there are companies that are doing …
Daniel, I wanted to just flash up this slide. I thought it was important, but this was the first event aside from their Securities Analyst Day, where they really rolled out the post-VMware strategy. And to me, it’s pretty simple. On the left hand side, you have some of the traditional businesses. PCs, compute, networking, and storage, with an as-a-service overlay called Apex. Growth areas, post-VMware spin, and as you said, hey, let’s not forget that VMware, there’s a five year deal currently in place. Dell is still going to lead with VMware, but pull through, and Dell is the kind of company that sells customers what they’re asking for. So you’ll see stuff like Nutanix. You’ll see Red Hat, particularly with Carrier. I know that came up as a conversation throughout the conversation.
But the big growth areas, and we saw this here at the Unplugged, was edge, edge telecom, and multi-cloud. Those were the three big areas that they hit on. And while I’m not totally bought into the huge numbers that IDC is putting up there, about 20, 25, I think they’re big enough to make it interesting, and strategically if you’re Dell and you don’t have a public cloud, but you’re building out multi-cloud capabilities and you’re strong in edge and carrier, aka telecom on this slide, it makes sense strategically for them to do this.
The final thing I want to say is just want to clear up, there’s this whole notion of VMware not needing Dell. Well, surprise, most of VMware’s growth came the last three years from aligning themselves with the Dell sales channel. And financially, VMware needs Dell as much as Dell needs VMware, and nobody should forget about that. And I’ll leave it there, Daniel.
Daniel Newman: Yeah, absolutely, Pat. Well, there’s a lot there. I think this is going to be a big story to follow over the next few years. Good week. Like I said, just a good week for these events. It felt super crazy and chaotic, but realistically, just a good slate of announcements, all moving forward. The hybrid multi-cloud story, Pat, it is in full effect.
Another story that’s in effect that you have been really on the front edge of, but we both work very closely on, and that’s what’s going on in the quantum space. And this week there was an announcement from Cambridge Quantum Computing, or CQC, and Honeywell, which for those of you that maybe forgot this, because news cycles come and go and come and go, there’s going to be a tie-up between these two companies. Honeywell is going to be funding and investing in a merge that’s going to happen between Honeywell and Cambridge Quantum Computing or CQC to create a new company that will exist outside of Honeywell. And that spin should be happening very soon.
So if you want to think simply about it, because there’s no way to think simply about quantum computing, but the simplest way to think about it is Honeywell is bringing the actual quantum computer, but in order to do anything with a quantum computer, you need software. And Cambridge is a company that’s spent a ton of time, has a lot of research, and has been working to build software. So one of the things you’ll kind of tend to hear when you’re listening companies, all the big companies that are involved in quantum, talk about quantum, is that Quantum’s kind of far away from really doing anything super meaningful in a way that the majority of people will understand. You kind of hear that. It’s like, “Hey, we’re getting more and more accuracy. We’re reducing the error rate. We’re able to create more usable cubits that can be applied towards things.” But what we kind of have come to the conclusion is, the quantum computer is going to be a marriage with the classical computer. They’re going to work together to create outcomes.
But Cambridge actually announced something that’s going to be usable right now, that companies are going to start applying into their business. And that is a quantum, they call it QNLP, or Quantum Natural Language Processing Toolkit and Library. They’re calling it lambeq, and essentially it’s the first software toolkit for quantum natural language processing that can take sentences and convert them into a quantum circuit. And this is being released open source, so anyone that wants to use this can use this, and very clearly CQC said, “This can run on computers, like IBM’s quantum machine, that are not Honeywell.” So it’s not a tie up in any way, even though the two companies are working together.
I think it’s a really interesting thing, the way … I had a chance to talk to Ilyas Khan, the CEO of Cambridge Quantum, and he was basically kind of walking me through it. Because even as technical, as much time, Pat, as we spend in quantum, I always need a breakdown on this stuff. And one of the things that he said to me that really stood out was that right now, with NLP and neural networks, when you send a query out there, effectively it’s like going into a magic black box. So once it goes into that neural network, there’s almost no way to know how that response comes back. How it actually got that understanding of the language, and how it is able to interpret it. And so when you start thinking about inference, this becomes really important. But with quantum, it’s got full transparency. So when you do this on a quantum circuit, everything becomes exposed, and that’s something that’s really important.
So for instance, like Merck, which is one of the big biotech companies, it got a lot of press recently because it’s got the supposed magic COVID-19 pill. It only took … Amazing. We had like three, four, 18 vaccines, but we couldn’t come up with a magic pill. Well, Merck supposedly is going to be the one that’s going to do that, and they’re one of the first to test lambeq. And basically what they found was that the level of accountability that it shows is just going to be absolutely critical for the application of NLP, for use in biotechnology and medicine. So we’ve all heard that quantum, for instance, is going to be … Health care is going to be one of the big, meaningful applications for quantum, right? Whether that’s finding drug compounds, helping pharmaceutical trials be streamlined. So Merck came out and basically said they see this as a massive advancement.
I see this, Pat, as one important inflection point for quantum, where we’re kind of increasingly seeing from theory to application. And so as companies like CQC develop these things that real companies can use, they can get their code in a Python repository on GitHub, they can basically put it on any quantum machine. So if you look at a quantum machine that might be available for simulation using Amazon Bracket or using Azure Quantum, it turns into something that becomes accessible, Pat, and you and I aren’t developers, but it is encouraging to me, because one of my biggest concerns about AI and LP and everything else is transparency, and Honeywell, in using quantum, and this greater level of transparency and accountability, is attractive to me.
Patrick Moorhead: That was an amazing analysis. You did a great job. The biggest thing that I’m excited about is something that we haven’t quite thought about yet, and that’s the possibility that quantum could potentially supersede things like discrete silica, in GPUs and even ASICS. So I think that’s super, super exciting, and it’s something that we haven’t heard. For instance, could quantum potentially replace the GPU? I think that would be incredible, and it’s something that nobody is talking about.
Daniel Newman: Yeah. Absolutely, Pat. Well, let’s keep moving there. This quantum stuff, we can give so much, and then after that, we need to turn it over to the Paul Smith Goodsons, like your quantum guy, who goes deep every time. And by the way, check out his Forbes column on this. I have a column too on our research note, but this is a topic, like I said, I love seeing it moving more and more towards applications.
Pat, let’s talk about a company people that follow our show probably don’t know much about, but that’s very interesting, and one that you’re tracking very closely, and that’s Movondi.
Patrick Moorhead: Yeah. So first off, I want to say I do have in an investment in Movandi, but we can move forward on that. So Movandi is a super interesting 5g company. Essentially these folks, a lot of them come from the Broadcoms of the world, the Qualcomms of the world, and what they do is they create RF chips. They have integrated 5g antenna modules, cloud-based algorithms and systems, and complete reference platforms for 5g. And that’s across private networks, devices, network operators.
But one of the most interesting things that I saw was a demonstration that they did, and I’m going to put this up here, essentially using millimeter wave, 5g millimeter wave in a moving car. And you might ask, “Why would anybody want to do that?” Well, first off, millimeter wave, let me give you a personal example. Millimeter wave here in Austin, on Second Street, lasts about two blocks. There’s a gNodeB from AT&T every two blocks, and you get outside that or you go inside, it essentially goes away.
And a lot of the hesitancy, I think, of the carriers to move forward with more of these gNodeBs is cost, because they are very, very expensive. And what Movandi did is they showed it, let’s say, in a future smart car, where you would have one of their repeaters, and what they did is they did a comparison of the before and after.
I’m going to share this video here of what they did, and just kind of talk through it. So to make a long story short, what they did is they had speeds before which were essentially low without using one of these. The down link speeds were 114 megabits per second, varied between 87 and 130, and that bumped up using the smart repeaters turned on, over 10Xed the performance, at 1.6 gigabits per second, and then a maximum down link speed of 2.7 gigabits per second. So truly an incredible breakthrough here. And really kind of more of a David Letterman pet trick, where it’s more of a proof of concept showing what can be done. And the cost of these repeaters today is half of a full gNodeB, but doing 5g in a moving car is a pretty big accomplishment in my opinion.
Daniel Newman: Yeah. No question about it, Pat. Look, the applications for millimeter wave and having that extraordinary throughput speed experience is significant, Pat, and it’s substantial. Like you said, you and I really do know as we bounce around Austin, the experience is you get on and off of these millimeter wave networks. The ability to connect that and take that mobile with us is going to be … God, just for my kids, so they can watch all those movies in the car without yelling at me about why the wifi is not working better. You know, stuff like that, Pat. But no, it’s a great story. I haven’t been following this company as closely now, but you’re turning me on to it. I’m going to definitely dig into this new announcement, Pat, and check it out, because it looks like this could be the start of something very interesting. I could see this company showing up more and more in this conversation about the next wave of millimeter wave 5g.
Patrick Moorhead: And by the way, just a final thing, what I’d like to do is look forward to the future, where you actually have 5g connected cars with the lowest latency possible, which is millimeter wave, and having the ultimate self-driving automobile.
Daniel Newman: Yeah. Absolutely, Pat. You’re right. I’ve written a lot about software-defined vehicles, connected vehicles. This is, in fact, the future, and this is one part of solving that, always connected. And by the way, always connected and always connected well, anybody that’s ever used Gogo in the air knows what not being connected well can feel like.
So let’s keep moving, Pat. I said, I promised everybody we would come back and talk a little bit more ESG, and after the Google carbon footprint. And let’s just say, it’s been an interesting week. So I want to talk about ServiceNow. They rolled out new ESG solution. Before I talk about that, I did have a chance, by the way, to sit down and listen to the CEO of Capgemini, Aiman Ezzat. And I’m only bringing this up because one of the things he said in his presentation, now, Cap, if you’re not familiar with them, one of the world’s largest integrator, service provider. Basically they are involved in almost every major deployment of technology. It’s either them or an Accenture, YPRO. There’s a handful of these companies, but Capgemini, I think, and Accenture would be arguably, I don’t even think it’s arguably, I think they’re one and two.
But having said that, the statement he made, Pat, that was really interesting to me was kind of that they’re designing every product and experience with sustainability from the start. And the reason I say that is, this goes a little closer to the customer level, and you hear that from a company that’s so close in so many industries to so many customers, and you go, “Okay, so this whole sustainability thing isn’t just a blip in the radar. It’s going to be a big part of our future, and these are companies that are involved in designing products and getting them into market, and they are building around it.”
So ServiceNow is joining the likes of … We mentioned Google earlier, Pat. We’ve seen Amazon is involved in this. Salesforce made announcements around this, and it’s going to be more and more, Pat. We’ve had back channel conversations, briefings from a number of different companies that are building more and more ability to manage, monitor their carbon footprint into every single workload that is deployed.
Well, ESG is something that ServiceNow is really well built to provide a solution to, because the thing is, is it’s about unifying. So ServiceNow has what’s called its Now platform. And so if you’re a company and you have a number of ESG goals, you might be able to get a little bit of information out of your cloud, or a little bit of information out of another application, or out of an ERP system. But how do you tie all that together? And so ServiceNow is looking at this a little bit more holistically. “We can put a management and reporting solution in place that you can document things, material topics. You can establish your goals. You can have your KPIs. You can track the performance. You can collect and validate your audit-ready data, or even create disclosures that align with the reporting frameworks that you would have for ESG.”
The other thing, too, is you can use in the platform what they call their project and portfolio management, to be able to essentially build and maintain your company’s roadmap for ESG, do your strategic planning, budget for what you plan to do, be able to track the cost, the resources, and of course get real visible KPIs of the results.
So in my opinion, we saw all the companies, Pat, coming out with COVID tracking tools. Remember? Everyone announced them. And by the way, some of them made it to market, and some of them didn’t. ServiceNow did one. Salesforce did one. Microsoft did one. And that was an instantaneous tool to solve a problem, like getting people back into the office. This is a very similar framework and structure of tools. How does a company basically say, “Okay,” and you and I talked about this in something that will be recorded, and maybe you’ll see out there in the wild at some point, but about the varying continuum of companies participating in ESG.
And the one thing I think, no matter how much you’re on the all-in on climate change and doing more carbon neutrality, or if you’re a straight up crazy science denier, I think everybody can agree about efficiency, trying to build more efficiently, build more intelligently, create things that are more scalable, quit building devices that are meant to be thrown out every year. Can you build something like you, Pat, I think you said modular? Everyone can kind of agree on those kinds of things, but the tools to enable us to know what we’re building, to stand by our goals, the same way we do with our revenue goal, the same way you do with a hiring goal, the same way you as being able to say, “Hey, can I look at a dashboard here and say, ‘Am I doing the work?'”
So as I see it, it’s really in a interesting moment, that the technology industry is starting to move more and more beyond the kind of, “Blah, blah, blah,” the greenwashing of everything that sometimes they’re accused of, to a much more measurable set of technologies and tools that allow companies to set goals, apply it through their ERP, their systems, their supply chains, and visualize realtime outcomes.
So interesting, Pat. I know you’ve got an opinion on this. I’m not sure you’ve tracked the ServiceNow product per se, but you and I had a lot of talks about climate change, sustainability. I lay that all out there wondering what you think.
Patrick Moorhead: Yeah. So first off, when I read about this, my first question was, “Why? Why ServiceNow?” And, “What permission do they have to go in and do this?” And then of course I reflect back on some of their strategic moves and new product offerings, is that they are no longer the ServiceNow that is merely tracking service incidents for people. They have dashboards. They’re using data in some very intelligent way. I think it’s really important for ServiceNow to lean in this even further, show more detail, otherwise they could, as you and I discussed yesterday … No, listen. I applaud this. This is a good proof point of them kind of moving up, as I would say, moving up the food chain from their roots into a more important company that has more to do with CX than even handling, and they do it well, service requests.
Daniel Newman: Yeah, absolutely. A company on the rise. I think at one point, it was last week, I don’t know if it’s still true, but I think their market cap actually surpassed IBM’s market cap. So ServiceNow kind of has come out in just an absolute rocket ship. Been very interesting to watch that.
So let’s move on to our final topic, Pat. And it’s one of those fun, not specific, one thing, product analysis. It’s like, “Hey, we’ve got a lot coming up.” Like you said, I’m going to be up to my earballs, and we are going to have an earnings-palooza episode that’s going to come up here at the end of the month, and that’s all coming next two weeks. We’re going to see the reality of the supply chain shortage, and everything that’s going on. But another thing that’s going on is announcements. I mean, Apple is actually doing a second event because their first one was so good. Am I being sarcastic? I don’t know. Samsung is doing another Unpacked, because their first one was so good. And then Google has a big announcement around its new Pixel. So Pat, man, take the floor on this one, and just leave me something to talk about.
Patrick Moorhead: Yeah. Just some overall thoughts. I mean, obviously we don’t know exactly what’s being … Actually, we do for Google. We know exactly what they’re going to be delivering, and it’s not a whole lot of mystery for Apple on their new MacBooks, and you’ve got the new Google Pixel. A big question mark on Samsung.
But first off, these are the vendors’ final time before the big Western holiday shopping season to get out, to put their best foot forward with any new products they’re going to get into the market before things like Halloween, Christmas, Hanukkah, things like that. So it’s super important that they do put their best foot forward.
My overall strategic question is, will it make a difference? So let’s just say Apple brings out a 14-inch and a 16-inch new MacBook Pro with an M1X processor, with bigger and better CPU and GPU. Currently Apple’s sitting around 8% market share. That’s premium market share, so it’s very profitable, and they make a very good business out of it. But overall, is it going to change anything? In my opinion, I say no, unless there’s a major price move on the current M1 MacBooks.
Now, I don’t think they’re going to do that, first of all, because supply chain challenges, they probably couldn’t get the materials if they wanted to. And second of all, I would expect them to wait for the M2 before, let’s say, I create something like a MacBook Pro SE, or sorry, MacBook SE, design it, cheapen the design a little bit, maybe add a little bit of plastic to it, still a premium field, but OPP at $799. That would shake up everything.
So I don’t see Apple, regardless of what they come out with, unless it’s a major price move, them shaking up the PC market with it. I see Apple aficionados maybe jumping on, but I think that the big question that the pros need to ask is, “Does my software actually work on these new M1X MacBook Pros? Do the peripherals that I have out there, the audio and video peripherals actually work?” I give Apple credit for solving a lot of the problems, but there are many problems to go. And if you want to run PC games, they can’t run the most popular games out there. They just won’t run. And I think that’s still going to continue to plague them for a certain set of the audience.
On Google, they have 2% market share, so it’s interesting we’re even talking about them at this point, because Apple and Samsung have so much more market share than Google. But I think we’re talking about this because it’s Google, and I’ll let you talk about their chip strategy as we move forward.
Samsung, to be honest, I have absolutely no idea what they might want to bring out. It looked like some colorful things. Some people are speculating it’s a smart fridge. I have no idea, but I look forward to what they bring out. I’ve been really impressed with Samsung of late on removing objections and lowering the price point for foldable phones, which I do believe is the future, and I do think companies like Apple will eventually get there. They’re just not ready yet for the market.
Daniel Newman: Yeah. Absolutely, Pat. I love a good week of launches and new devices. It’s always a whole lot of fun. I’m also very interested. Apple I feel like is kind of setting up itself in the market for some disappointment this quarter. We’ll see if I’m right, but it’s just kind of my inflection point. The next set of announcements, the next wave of announcements for the company, look, Apple knows it’s a PR machine. Every time it does this, every time it makes an event, it gets butts in the stores, and it sells stuff. And right now, the company’s under pressure to continue to hit numbers, hit targets, and of course, selling new product across its lineups, because it’s having some problems, like every company is, with supply. So if it could sell more across the entire portfolio, the better it does.
So it’s drumming up more interest, drumming up more revenue, turning over more devices. Of course, I don’t know all that device turnover, how that goes with that whole ESG story I just told, Pat, but you know, they’ve got some way they take these devices apart, they use some machines, and they recycle everything they can, right? I mean, that’s what’s happening. But not as efficient as it could be.
You know, Samsung, Pat, like you, I go to the events. I follow it. Their devices are absolutely off the chains good. That’s probably one of the biggest things that surprises me, you know? And I’m still, I use a Samsung 5g device, and I also use an iPhone. I’m actually still on a 12. I haven’t upgraded yet because I can’t figure out what I’m getting. But having used both, I could say the Samsung is actually superior in almost every way, from the quality of the screen, to watching videos, to the sound. The cameras are always seemingly a generation ahead, but it’s not Apple. So that’s their downside. If a Samsung phone had an Apple logo on it, people would love it. But I do still like iOS. I wish I liked Android a little bit more, but I do think every generation of Android continues to get a little bit better, and I do think they will continue to put pressure on Apple, especially on the global stage.
Pat, Google, I don’t know why we’re talking about them. I really don’t. Are they even relevant? Do we talk about PC companies that have 1% of the market? Are we going to start doing like, Acer? I think Acer has more. Are we going to start having segments on Acer? I think they have more than 1%, and we never talk about them.
Patrick Moorhead: I mean, we don’t even talk about Moto. That’s number three in the United States, that’s owned by Lenovo.
Daniel Newman: Yeah. And they’re actually doing really good sort of identifying white spaces, and meaningfully applying pressure, and getting some growth. But it’s Google. It is Google. And so the thing about what is going on with the Pixel that’s really interesting is the Tensor SoC. Right now, there’s been a lot of speculation. Nothing’s been formally announced, but it looks like Google partnered up with Samsung on their Exynos 2100, which is going to be what they’re going to call their Tensor SoC.
And what’s most interesting about that is all of the flagship devices that are on Android are on the 888 Plus Snapdragon system. This one came out, and for whatever reason, Google went their own route, decided to run, Pat, and please, you can debate me on this if you feel I’m wrong, but from what I can tell, is significantly inferior to the 888, and they’re going to put this out as their flagship device. I cannot for the life of me figure out how a company that can’t get even 2% of the market share is going to come out with this kind of theoretical Tensor SoC and run it on an inferior system, which in this case is the Exynos, and try to compete. I don’t get it, Pat. I mean, you would think that if you really wanted to compete, you would build it on the system that every flagship device running Android is using. And by the way they’re not you using the 888, but Apple still uses quite a bit the Qualcomm 2. So what do you think is going on there?
Patrick Moorhead: So I think Google has a little bit of Apple envy, but I think maybe what it’s missing is that Apple’s been doing this for a decade. AWS has been doing this for a decade, and they have … All I can think of is this is a preview on a step to doing their own silicon, that by the way, would take R&D probably the size of AMD to truly pull it off. The latest G2 I have about Apple’s headcount is it’s around the same headcount as AMD. So if you want to try to duplicate that, that’s a big investment. Because my expectation is that the 888 Plus beats the 2100 in every single metric that’s out there. So I’m waiting, at a minimum, I would have liked to have seen some more customizations from them, because it’s a pretty poor start.
I mean, even Samsung realized on their foldables that, where they used to split up between their own Exynos, and they had a tremendous amount of backlash where the Exynos, 20% less performance than Qualcomm. And then Samsung ended up going all Qualcomm across those in the end. The other big question I have is millimeter wave and Samsung on the digital modem portion. I have never seen a Samsung millimeter wave phone anywhere even tested in the US. I mean, Samsung’s a very capable company. Not only do they have the modem, they do some RF work, but they also have the infrastructure as well, and is growing. So a lot of things just don’t make sense to me here, Daniel, and I do appreciate you bringing that up as a topic, because I think it will be an important topic going into next week.
Daniel Newman: Absolutely, Pat. What a show, man. Listen, it’s been a great week. Really appreciate everybody out there tuning in. Next week, Pat is going to be busy. We’re taking The Six Five on the road. We will be in Las Vegas at SuiteWorld, which is the big annual Oracle NetSuite event. And then later in the week, Pat, you and I are going to be doing a little F1-ing, F1-ing with Splunk, with Oracle. We’re going to be with McLaren. So that’s pretty cool, and that should definitely give us some fodder to talk about.
And then of course, next week, big earning start. We got IBM right ahead of their Kyndryl spinoff. We’ve got Intel coming in hot, which should give us a really good indicator of what’s going on in the chip shortage. And then right after that, we’re going to have just the whole wave. And that means I’m going to be a busy guy, Pat, because you know, I write all those columns on earnings. I guess I just need to carve out, I don’t know, 40 hours to come up with what the heck is going on, but it’s good-
Patrick Moorhead: How about cloning yourself?
Daniel Newman: Is that possible?
Patrick Moorhead: I don’t know. They clone sheep and dogs. It works out.
Daniel Newman: I don’t know. Can Movandi create one? A mobile clone ship or something?
Patrick Moorhead: Possibly. They are into repeaters, so just repeat Daniel.
Daniel Newman: That’s what I was thinking. Can we create a Daniel repeater?
Patrick Moorhead: I love that.
Daniel Newman: All right, everybody. That’s the show for this week. Appreciate y’all tuning in. Hit that subscribe button. Join us for our additional shows. We’ve got our insiders with top executives, and of course, we’ve got our weekly show. We are coming up on episode 100, so Tweet at Pat some good ideas to celebrate our 100th episode. And then of course, Tweet at me, @DanielNewmanUV, with all your compliments and positive feedback on our show. We hope you enjoy it. We hope you like the insights, the analysis, and we hope to have you stay a part of our Six Five family. For this episode, time to go. We’ll see you next week.