Cloud Computing Archives

Qualcomm Aware: Pivotal SaaS Play to Catalyze the Complex IoT Ecosystem

The entire world is going through digital transformation with connectivity at the center intelligently bridging the edge-cloud gap. The data emanating at the edge, whether it is telemetry data from the sensors or location, has been pivotal in adding intelligence, context, and analytics to the connected asset to enable quick, accurate, informed, and timely decision-making.

If we look at the entire IoT or location value chain, it spans from the endpoint/edge (possibly a device/sensor/gateway) to the network infrastructure, enabling connectivity between the edge and the software or API-driven cloud and analytics platforms. While connectivity is the glue, location also provides important context to the asset and the data emanating from the asset.

WATCH: Qualcomm Aware Platform Explained

Power of connectivity and location

We have extensively researched and talked about the IoT market and the importance of end-to-end control, from chipsets, modules, and devices to connectivity to the platforms, including both IoT and location. The IoT landscape, which has been fragmented, is now undergoing consolidation as there is a significant mismatch between the value being created and captured. However, the success in IoT lies in a player which can be integrated and offer end-to-end capabilities while also remaining open and flexible to work with different partners across the value chain at the same time. This should allow the player to create and capture maximum value opportunities for everyone and accelerate the digital transformation journeys of different companies.

Qualcomm has been the leading and largest “connectivity” chipset provider in the IoT and automotive segments, shipping hundreds of millions of chips every year. While connectivity and IoT are natural to Qualcomm, the San Diego-based systems company has also realized the importance of blending the power of location and connectivity. Therefore, Qualcomm has acquired its long-time partner Skyhook, a Boston-based company that has been a leader in the development of location technologies integrating into the devices, and PoLTE, a Dallas-based company focusing on cellular-based accurate positioning technology for mobile devices to IoT applications such as fleet management and asset tracking. Driving location-based intelligence right from the chipset via APIs reduces a lot of integration-related difficulties for companies trying to connect their assets to the cloud securely and seamlessly.

WATCH: Qualcomm Aware Platform Use Cases Demo

Qualcomm Aware SaaS platform – API-driven chip to cloud connectivity

With its important position in the IoT value chain and leveraging its location and connectivity expertise, Qualcomm recently launched Qualcomm Aware, an API-first platform offering secure and out-of-the-box chip-to-cloud integration. Qualcomm is doing this via an intelligent software on top of the chip to help solution makers optimize, configure, and transmit location and telemetry data from the edge to the cloud simply via APIs integrating with partner solutions.

Source – Qualcomm

Initial capabilities: Location data, connectivity management, security and more

The Qualcomm Aware solution can be tailored to specific verticals, applications or use cases. It comprises of following capabilities:

• Location data GNSS, cellular, Wi-Fi, hybrid location, geofencing, etc
• Power-optimized, configurable hardware and software components
• Security – edge to cloud, Silicon Root of Trust, provisioning, etc
• Connectivity management – cellular, roaming, Wi-Fi, Bluetooth, etc
• Devices – With Qualcomm Aware low-power embedded chipsets

In our opinion, the platform for a particular use case, such as asset tracker, might offer the full solution to start with. But when the need to scale up arises, the platform will have to become more modular so that the end customers or system integrators have more options to choose from. For example, just leverage location APIs or with connectivity management or the off-the-shelf Qualcomm Aware partner devices or not.

Initially targeted use cases: Asset tracking

Source – Qualcomm

Since it blends location and connectivity well, asset tracking is the lowest-hanging opportunity for Qualcomm Aware.

Qualcomm has partnered with Quectel, Ikotek, Thundercomm, and others to build Qualcomm Aware-ready asset trackers to help customers kickstart with the offering as the previous-generation chipset-based devices cannot be upgraded to become Qualcomm Aware compatible. While the solution comes with bundled connectivity (via partner), Qualcomm does not aim to become an MVNO and step on its partners’ toes. For the mapping, routing and location data, Qualcomm is partnering with Mapbox and TomTom in this initial phase. Larger players such as HERE and Google are expected to be on the partnership roadmap eventually.

Source – Qualcomm

Therefore, transport and logistics is the initial target segment, followed by retail, manufacturing, construction and utilities.

Success will be in partnerships and moving to self-serve model

Qualcomm is thus expanding its capabilities and offerings to become a strong enabler with a platform play in this high-potential, fragmented but consolidating market. The timing of the launch might be questionable for many considering the ongoing consolidation, but we believe this is the best time to enter the market with a unique and highly scalable platform to invigorate this market, especially with a strong position in the edge market.

Source – Qualcomm

To be successful with a SaaS approach, being open and striking the right partnerships is paramount. It is great to see Qualcomm striking partnerships across the value chain, from module and device manufacturers, software and middleware players, and location and mapping vendors to system integrators and cloud players. Qualcomm will have to invest in and empower dedicated pre-sales, consulting and post-sales teams to make headway into these markets. Moving to a self-serve model would be critical to further scaling the SaaS business.

Key takeaways: Chip-to-cloud partner-driven IoT and location platform approach

• No vendor other than Qualcomm enjoys a strong position when it comes to the edge of the market.
• As intelligence moves to the edge, a secure edge-to-cloud connectivity offering can help simplify integration, portability and provisioning of IoT solutions, catalyzing the IoT ecosystem.
• Qualcomm Aware helps the company broaden its portfolio beyond hardware to a recurring and scalable software/services business, which investors and partners would welcome.
• Further, Qualcomm Aware can help crack the significant but complex and fragmented IoT market to make a play in the $700-billion connected intelligent edge opportunity.
• The platform’s future success will depend on how Qualcomm expands its partner ecosystem across verticals and geographies while also moving to a self-serve model.

Meet Counterpoint at Cloud Native Telco's Forum 2022

Counterpoint will be attending the Cloud Native Telco’s Forum 2022 on 24th August.

Our Research Vice President, Neil Shah, will be moderating the inaugural session at the Cloud Native Telco’s Forum 2022. You can schedule a meeting with him to discuss the latest trends in the technology, media and telecommunication sector and understand how our leading research and services can help your business.

Click here (or send us an email at contact@counterpointresearch.com) to schedule a meeting with him.

Session Theme: “Cloud Native in India – It’s time to Operationalise”
Day and Date: Wednesday, 24th August 2022
Time: 9:30am – 11:30am IST
Venue: Zenith Ballroom, The St. Regis Hotel, Mumbai

To get live Cloud Native Telco’s Forum 2022 updates you can watch this space or follow us on Twitter Follow @CounterPointTR.

The uphill battle for Intel commences with its first earnings of 2022

Intel enters a year where Moore’s law has considerably slowed, supply chains are constantly under pressure from various macro and micro factors, PC demand corrects from the pandemic induced highs and growth rally momentum comes from mostly Cloud, Automotive and 5G.

Intel reported revenue of $18.4B, a decrease of 7% YoY, gross margin was down 4.8% YoY to 50.4%
Client Computing Group (Notebooks and Desktop) was down 13% with Notebook Revenue declining significantly by 14%
Datacenter & AI Group remained the key growth segment for revenues for company with 22% YoY growth in revenues supported by Network and Edge Group with 23% YoY growth, Accelerated Computing & Systems with 21% YoY increase and Intel Foundry Services up by 175%
Foundry capacity and Equipment to remain tightened till 2024

Segment Reports:

Client Computing: Consumer and Apple headwinds chip away $1.4B from the Client Group

The desktop revenues stood at $2.6B and notebook revenues were at $6.0B indicating a decline of 5% and 14% YoY respectively. The decline was majorly attributed to inventory digestion cycle and demand waning due to Covid-driven situations. Ramp down on Apple CPU and modem business in addition to muted demand from education market segment contributed to the significant decline in revenues.

The only offset came from increased ASP pricing across segments with 32% increase in Notebooks and 7% increase in Desktop segment.

The Client computing group will see muted demand for the year because of the inflationary environment, supply chain constraints and inventory realignment by OEMs to reflect the intrinsic demand minus the Covid induced spike.
Gaming and Enterprise Tech Refresh are the two trends that will help the group revenues to surf and stabilise.
The product roadmap in later half of year will see intensive competition due to Raptor Lake and AMD Ryzen 7 hitting the markets.

Datacenter and AI (DCAI) proves to be The Revenue Guard for year 2022

DCAI revenue was up $1.1B or 22% at $6.0B due to continued demand from Hyperscalars and Enterprises. Hyperscalars are continuing to invest in DC infrastructures to enable their Metaverse ambitions whilst Enterprises are expanding and upgrading their infrastructure to sustain the data generation and providing analytics that is fast becoming a necessity from consumers.

Intel FPGA based IPUs also contributed to the growth where volume adoption is present at the major cloud players and the demand continues from peripheries including Networking and Automotive DCs.

A 3% ASP decrease was observed in segment and 26% volume increase due to product and customer mix indicating majority of sales from Intel Xeon Silver/Bronze.

We think that majority of sales went to enable the ‘Edge’ infrastructure.

This is the year of Datacenters and Cloud as reinforced by every chip and cloud company in their revenue forecasts. The demand will be coming from Hyperscalars, and Enterprises expansion accelerated by the supercomputing efforts from the companies, SaaS adoption and cloudification of consumer services.
Company’s Edge to Cloud chip portfolio offerings will help capturing the demand coming from the Edge and Networking market as 5G network deployments and MEC becomes more widespread
With the acquisition of Granulate (SaaS service that improves performance in cloud costs with its autonomous dynamic optimization service to unmodified customer workloads) – the company’s SW stack combined with HW would provide additional revenue streams

Network and Edge (NEX) segment rolls due to the ’Edge’ Expansion

NEX revenue was $2.2B up 22% YoY. Demand drivers for the segment came from cloud networking hardware and software tools.

The networking segment will strengthen as company has focused on launching silicon for software defined infrastructure – vRAN and ORAN for Network and Edge capturing the upcoming high-volume deployments from operators
Upcoming Sapphire Rapids can prove to be a breakthrough for Intel to establish its leadership as it claims to deliver up to two times capacity gains for vRAN and support advanced capabilities like high-cell density for 64T64R Massive MIMO

Accelerated Computing Systems and Graphics (AXG) revenue is at $219M

Intel marked its foray into Discrete Graphics with its Intel A series of mobile GPU which was launched in Spring this year. The Desktop GPU are expected to be launched in Market this summer. Company is expecting to do $1B+ business this year as it scales the range at Data Centre level with Ponte Vecchio.

Intel is entering highly competitive market where Nvidia reigns supreme. The company has launched only one Variant – Intel ARC for Mobile so far with 50+ design wins. The variant has performed well but it will take more time for Intel to get the mind share and the wallet share it is expecting! The other variants would be launching this summer and we sincerely hope that Intel promises on the momentum it has indicated for its AXG business.
The launch of Blockchain accelerator would help in capturing the peripheral accelerator business which is dominated by mostly DIYs or Nvidia
The resonance of synergies from having its own CPU+GPU+I/O and in-house foundry coupled with its proprietary SW technologies – Evo & XeSS would help Intel to produce inspiring performances from devices because of component efficiencies in the long run.

Mobileye logs record revenues at $394M

Mobileye grew 17% YoY to have its best quarter in earnings. The company has successfully demoed L4 robotaxi in Jerusalem and grew its number of testing sites to 10 cities across 3 continents with addition of Miami and Stuttgart. The commercial robotaxi services will commence at the end of 2022 in Munich and Tel Aviv.

The much-awaited IPO might debut later this year but Intel has so far kept to its delivery and promise schedule regarding Mobileye products
The revenue would probably see a considerable spike later this and early next year as the consumer and commercial L4 vehicles enter mass production

Intel Foundry Services (IFS) is on a promising start with $5B in deal value across nodes

The revenue of IFS was $283M. The team has 10 opportunities for its process and package offerings representing over $5B in deal value. The team has over 30 test chips for Intel 16 and is expecting Intel 3 and Intel 18a customer test chips to tape out later in 2022.

From foundry perspective the progress looks very optimistic considering on Intel 4, Meteor Lake has successfully booted and pre-production wafers have commenced on Intel 3.

The company also commented that it has enough substrate and Fab supply to meet customer’s demand.

The behemoth task of delivering 5 nodes in 4 years remains the crucial aspect to Intel for its every business. So far it looks like everything is going good for them but as the tape-outs occur for Intel 7 we would have better visibility on the yields.
Considering the past, we are cautiously optimistic on the outcome on the node delivery as the Wafer Equipment manufacturers have started flagging the delivery timelines.

ESG Commitment Updates: Intel announced initiatives to reduce its greenhouse gas emissions and develop more sustainable technology solutions by identifying greener chemicals, new abatement equipments, including using 100% renewable energy across their global operations by 2030 by investing $300M to achieve 4B KWh of energy savings and achieving net-zero greenhouse gas emissions in their global operations by 2040.

Outlook for Q2 2022

Company is expecting $18B for Q2 2022, a 3% decrease YoY as the inventory burns happen and the company readies itself for inventory reversals due to launch of Raptor Lake and Sapphire lake. But for Q2 the client computing will remain muted due to the macro factors heavily influencing consumer sentiments.

The Hybridisation of Hybrid Cloud

As the corporate world experiences an accelerated digital transformation owing to fundamental changes in workplace and consumer habits, most enterprises are adopting the cloud to pave the way for this change.

However, choosing to grow with the cloud comes with its own set of challenges that makes skeptics out of believers. Earlier, it was a binary choice between a public cloud and a private cloud (or expansion of the on-premises infrastructure). On the other hand, in a hybrid cloud, the benefits of public cloud, namely lower TCO (total cost of ownership), agility and higher speed, get married with the security, compliance and on-demand geographical data access provided by a private cloud.

The use cases for hybrid cloud go way beyond the obvious. Apart from the apparent adopters like telecom operators and the gaming industry due to the low latency it offers, we see financial institutions and media entertainment houses, which struggle with strict compliance and data residency rules, adopting hybrid cloud. This enables them to innovate at a higher pace while still complying with regional data laws.

The hybrid cloud ecosystem is undergoing critical changes, with major public cloud providers offering customized solutions for those opting for hybrid cloud deployments. The emergence of Hybrid Cloud as a Service in the past two years has morphed into a more sophisticated bundle of offerings to accommodate varied workloads while driving cloud adoption. We expect a majority of enterprises to move to this medium in a multi-cloud environment in the next three years.

Cloud providers are increasingly focusing on multiple vendor partnerships to offer full-stack solutions that boost interoperability. This need for a symbiotic relationship is driven by the fact that the security and privacy of data is the most important resource while evaluating IT infrastructure. Therefore, the gaps in the public cloud are seemingly filled with hybrid cloud solutions.

Some recent industry examples include IBM’s acquisition of RedHat, HPE’s partnership with Nutanix, VMWare Cloud on AWS, Netapp with Equinix, and Istio–Google partnership with Cisco. These partnerships are driven by the confluence of the following trends prevailing in the industry:

Accelerated rate of 5G adoption: According to Counterpoint estimates, in Q1 2021, every one out of three smartphones sold was 5G enabled. In evolved markets like the US, Europe, China, Japan and South Korea, the sales were past the 50% mark and adoption levels nearing 80%.
As the emerging economies embrace 5G, the onslaught of data generated will push telcos to turn to hybrid cloud infrastructure to quickly meet the rising demand and region-specific data compliance agreements.
Rise of AI and ML workloads: AI-specific workloads have increased considerably in the past two years. AI/ML workloads require modern IT infrastructure to glean insights from them. It is evidenced by the rise of AI/ML as-a-Service segment in major cloud providers’ portfolios. As the enterprises focus on application development to support product releases enabled by AI insights, the focus shifts from IT infra handling to DevOps Productivity. The hybrid cloud enables the enterprises to focus on the application while taking away the pain of being a Data Center Manager!
Edge compute: The unprecedented volumes of data generated at the edge are accelerated by 5G and are outpacing the traditional compute infrastructure. Real-time data analysis has transitioned from ‘should have’ to ‘must have’ for the enterprises. Counterpoint estimates that IoT shipments have increased ~25% in the last two years. We see cloud providers increasingly offering specialized Edge services – AWS IoT Greengrass, Azure IoT, IBM Edge Computing, HPE IoT and many more. In fact, nowadays almost every player has a service catering to Edge compute.

Companies are increasingly adopting this ‘best of both worlds’ solution called the hybrid cloud, which drives their IT and business priorities. We believe that this trend will accelerate even further as 5G penetrates globally and enterprises reach turnaround points in their digital transformation journey.

The interesting thing to look forward to as 2021 rolls into its latter half will be the introduction of Specific Workloads aaS (as a service) at Edge and the offerings of hybrid cloud supporting multi-cloud environment.

Podcast: IoT Platform Competition Intensifies with Cloud-To-Edge Approach

As more and more devices are being connected to the cloud via internet, IoT is becoming more pervasive. These devices help in real-time monitoring, data collection, analyzing and then taking the required action. At Counterpoint Research, we recently completed the latest in-depth analysis using proprietary CORE (COmpetitive Rankings & Evaluation) framework to evaluate the leading 20 IoT platform players. They were evaluated based on over 35 capabilities and parameters highlighting completeness, comprehensiveness, and competitiveness.

In most scenarios, sending data to cloud, waiting to process and then taking the required action is not feasible. Due to this edge computing is becoming important. This is also a reason why cloud-first leaders such as Amazon AWS, Microsoft Azure, IBM Watson, Cloudera and others are extending their IoT platform capabilities from cloud to edge.

Exhibit 2: Counterpoint CORE – Leading IoT Platform by Completeness i.e. End-to-End Capabilities

But as the IoT ecosystem continues to expand, and move from cloud to edge, security cannot be neglected. This is especially true for devices that gather and store your personal data. In the previous episode of “The Counterpoint Podcast”, we discussed the Future of IoT Security. In the latest episode, host Peter Richardson and consultant Falguni Shah discuss the IoT platform landscape and how the space is shaping up. Topics covered in the discussion include the leading IoT platform companies, level of automation they offer, competitiveness and more.

Detailed report with CORE Evaluation and Analysis of the world’s Leading 20 IoT platforms research can be found here. You can also read our report on overall IoT platform landscape and leading edge-focused IoT platforms here.

Hit the play button to listen to the podcast

Also available for listening/download on:

Microsoft with Azure Sphere Looks to Set Gold Standard in End-to-End IoT Security

Traditionally, security circled around securing network and software applications. However, as more devices get connected to the internet, and threats rise, there is an unprecedented need to secure hardware alongside the data flow from edge devices to the cloud. Hence, integrating security across all four layers (hardware, software, network, and cloud) becomes vital for a secure IoT deployment. We are already seeing this being adopted across data-centric devices such as smartphones.

What are the options to enable hardware security?

The key is to secure the hardware at the chipset (MCU/SoC) level to first secure the data flowing through the internal bus. This can be done by embedding Secure Elements (SE) such as Physical Unclonable Function PUFs, Trusted Platform Module (TPMs), or Hardware Security Module (HSM) to the system within the devices. Further, key injection in the secure enclave/PUF along with cryptographic key management to ensure the secure identity of the devices and to create secure tunneling of data flowing within the device and then from the device to the cloud.

How will secure hardware help Microsoft?

Microsoft is the leading end-to-end IoT platform provider globally connecting millions of edge IoT devices across tens of thousands of enterprises to its Azure cloud via its Azure IoT platform. Microsoft also has been offering Azure Edge IoT software to enable computing and intelligent decision making at the edge. As a result, Microsoft must ensure the millions of devices running its Azure instances are not compromised and securely connected to its cloud.

In light of this, Microsoft has been looking to build secure chips with silicon partners to create a “hardware-based root of trust”. This will help solve cloning and counterfeit issues and will also establish secure authentication with its IoT hub platform via a unique trusted identity.

To achieve this goal, back in 2018, Microsoft announced Azure Sphere to build multi-layered end-to-end security. Since then Microsoft Azure Sphere has evolved and constitutes three key elements:

Source: Microsoft

Hardware: Azure Sphere embeds secure keys (public) within a secure MCU/MPU powered by its Pluton security subsystem.
- Pluton includes a security processor unit with a random number generator (RNG)
- Tamper and side-channel attack resistant
- Other cryptography and encryption tools
- Secure booting for remote attestation and certificate-based security

As an example, the MediaTek MT3620 contains an isolated security subsystem with its own Arm Cortex-M4F core that handles secure boot and secure system operation. This M4F security processor features a 128kB secured TCM and a 64kB secured mask ROM bootloader.

Source: Microsoft

Software: Azure Sphere OS:
- Azure Sphere OS is made up of a custom Linux kernel, which runs on 2.4MB code storage, which is carefully tuned for the flash and RAM footprint of the Azure Sphere MCU to reduce its attack surface.
- The OS communicates with the Azure Sphere Security service in the cloud for secure device authentication, network management, application management for all outbound traffic.
- It undertakes secure monitoring to protect memory, flash and other MCU resources limiting exposure.
- The OS includes Microsoft-provided application runtime to restrict access to file I/O or shell access.
- It also includes a high-level application platform which is signed by Microsoft Certificate Authority (CA) through a trusted pipeline to maintain all software other than the device-specific applications.
Cloud: Azure Sphere Security Service
- Azure Sphere Security Service brokers trust for device-to-cloud communication, detects threats, and renews device security via CA based-authentication, failure reporting and automatic updates for OS.
- Azure Sphere in the cloud thus embeds with a private key that enables asymmetric encryption and authenticates devices with paired public keys at the time of the manufacturing process.
- Further, Azure Sentinel provides cloud security through Artificial Intelligence.

The integration of all three elements enables the hardware root of trust with asymmetric encryption. Further, it creates a secure tunnel for the secure flow of data from chip to cloud ensuring both the data security at rest and in transit.

Following chart depicts Azure Sphere running on a Guardian IoT module for a brownfield IoT deployment

Source: Microsoft

Growing Partner Ecosystem:

Chipsets:
- In 2018, ST Micro’s STM32, a secure MCU embed with a secure element and integrated with Azure IoT C SDK, which enables direct and secure connectivity to the Azure IoT Hub, as well as full support for Azure device management.
- In mid-2019, NXP’sMX 8 series, integrates Microsoft’s Azure Sphere security architecture and Pluton Security Subsystem.
- MediaTek MT3620 is Azure Sphere ready
- At the end of 2019, Qualcomm’s 9205 LTE multimode modem supporting both LTE-M / NB-IoT was integrated with Microsoft’s Azure Sphere.
Modules
- Avnet and qiio offer Avnet Guardian 100 and qiio q200 Guardian (add-on) modules for retrofitting on exiting brownfield devices which lack connectivity and security but need to be connected to the Internet.
- Other modules include Avnet AES-MS-MT3620, AI-Link WF-M620-RSC1 and USI Wi-Fi module with Bluetooth option.

With this approach, Microsoft is building a highly scalable and secure approach to onboard, manage and connect IoT devices and ensure the data is securely transmitted from device to cloud. This eliminates the need for most IoT customers to hire expensive security professionals.

Case Study: Starbucks

Starbucks has deployed Azure Sphere across its stores in North America. Each Starbucks store has around ten to twelve pieces of equipment that are operational for more than fifteen hours a day and are needed to be connected to the cloud for beverage related data (10 to 12 data points worth 5MB generated per beverage), asset monitoring and any predictive maintenance to avoid disruptions. This is important as any equipment breakdown is directly proportional to the store’s performance, its business and customer dissatisfaction. Starbucks has therefore been using the guardian modules deployed by Azure Sphere with the help of Microsoft across all its brownfield equipment to securely connect and aggregate the data to the cloud.

Source: Microsoft

Chip-to-Cloud Security is the Gold Standard

Security and privacy are global concerns around IoT, irrespective of country. Security is one of the major roadblocks for IoT. However, in the past two years, we have seen the adoption of chip-to-cloud security due to an increase in awareness of the threats and its scalable solution. The end-to-end security will be critical to the success of any future IoT deployments to protect the asset as well as the data which, in most cases, is even more valuable.

COVID-19 Will Further Cement the Road to a More Digital World

COVID-19 has been spreading like wildfire across most of the world. The virus is crippling economies and bringing industries like aviation, tourism, retail, and manufacturing to a more or less complete halt. Services are restricted to essentials and many people are on the verge of or already have lost their job. Consumers in most of the world are in lockdown, some for several weeks or even months. They are forced to be dependent on the digital space around them more than ever. This will trigger some habitual changes, the traces of which can have profound impacts on several industries in the longer run.

Work from home has now become a norm and CEOs and CTOs around the world will have to embrace more digitalization and implement robust remote working capabilities across their organizations to sustain through uncertain situations like these. COVID-19 will accelerate the digitalization of services across the Globe and adoption of products which will help stakeholders access those services seamlessly. Some of the products/industries which could gain more traction after the COVID-19 dust settles will include:

Smartphones and associated ecosystem:

As users are staying at home, the use of smartphones and their application ecosystem will see a sharp increase and potentially, some new users as well. With the closure of offline retail, smartphones are now crucial to access essential services like delivery of groceries, food, news, hyper-local retail, and mobile payments. Users of these services are likely to be more habituated to their use even after the lockdown ends. This will also make some feature phone users realize the important role a smartphone now plays and could drive them to make the switch. The global smartphone market already showed resilience in February, declining only 14% YoY, somewhat less than expected.

Mobile gaming and OTT platforms:

With entertainment options outside the home now closed, mobile gaming could also see accelerating popularity. Users are likely to download newer games or increase usage of existing games and could hook up to some of them for longer. Online game streaming services like Hatch will have a more viable business case now.
People are also heavily using OTT services like Netflix, Amazon Prime, YouTube, and Hotstar. The usage has been so high that some of these platforms have had to limit the viewing quality. These platforms have the opportunity to retain these users for the long term.
The increase in usage of these applications also means large amounts of data generated, which can be analyzed to recommend more curated games and streaming content to customers and increase their stickiness. With such high traffic, this is also a testing time for these platforms. Product managers can use this “usage peak” time to take consumer feedback, analyze data, reduce downtime and improve these platforms to enhance the overall user experience.

Digital transformation of Enterprise: Cloud Computing, Collaborative tools, Remote working capabilities

Digital transformation is almost inevitable for enterprises that want to be resilient to uncertain situations like COVID 19. This is also crucial for public services, health care systems and even education. Governments around the globe will have to embrace digitalization for seamless access to these services with faster responses and more efficient resource management, especially in times of emergency. As companies will prepare for times like these, it will require more applications to be hosted online, which will drive additional business for cloud service providers. The reliability and scalability which cloud offers can help organizations deal with uncertainties like unplanned demand. Cloud will also be a viable option for small and medium enterprises as it is more cost-effective.
Remote working will also lead to an increase in usage of collaboration tools like Teams, Zoom, Skype and Asana. Since work from home is often the only way for office and clerical functions to work, companies will have to think about replacing their desktops with laptops to be prepared for such situations in the future. This will increase the demand for laptops. Small enterprises can also buy refurbished laptops to save costs. It will also underscore that some businesses can manage with less office space while supporting home and flexible working.

Robotics and Autonomy:

One of the worst-hit sectors during COVID 19 is manufacturing. The unavailability of the workforce has led to a complete shut down of the manufacturing facilities of some of the most advanced ODMs/OEMs of the world. Robotics, machine to machine communications, IoT and complete autonomy of assembly lines can help deal with a crisis like this more efficiently by reducing the human intervention to a minimum. COVID 19 can accelerate the path to Industry 4.0.

Telecom Operators:

All these services mentioned above require the base of good internet infrastructure in the background. The increased usage of mobile internet and broadband can help drive ARPU for telecom operators which are significant especially in fast-developing countries like India, where operators are facing high debts and competition. Bundling of some of these services can also help operators increase revenue.

COVID-19 came as a sudden disruption to organizations across the globe. While a shock to the system, this type of disruption will inevitably bring about changes; one of them will be an acceleration toward a more digital world.

Azure Arc: A Paradigm Shift in Hybrid Cloud Management

Microsoft announced Azure Arc on 4^th November 2019 at the Ignite 2019 conference. Azure Arc enables enterprises to deploy Azure cloud services, on any type of on-premises infrastructure as well as in a multi-cloud environment. As hybrid cloud strategies for enterprises gain more popularity, app and cloud management will be a more sought-out service that public Infrastructure as a Service (IaaS) can provide. In this regard, Microsoft’s biggest competitors, AWS and Google Cloud have also recently launched their hybrid cloud management services, AWS Outposts, and Google Anthos, respectively.

A hybrid cloud strategy is an enterprise cloud strategy that involves managing and operating workloads across different infrastructure environments, namely, on-premises, private cloud or public IaaS cloud. Enterprises often need to keep confidential data on-premises or in a private cloud. However, other less sensitive data and applications can be maintained in public cloud environments because it can be more cost-effective and offer additional features. Azure Arc has added a further dimension to this hybrid strategy with managing resources across multiple public cloud platforms.

According to Microsoft, Azure services can be enabled on any computing platform, including Windows and Linux servers, located on-premises, in the cloud or at the edge. Any Windows or Linux server, even those running behind a firewall and proxy, can be registered with Azure Resource Manager. VMs running on top of VMware vSphere, Amazon EC2, and Google Compute Engine can also be registered with the Azure Resource Manager.

In addition to this, Microsoft said that Azure Arc can also register Kubernetes clusters. Once registered, any Kubernetes cluster can be managed like Azure’s Kubernetes Service (AKS). Customers have the flexibility to deploy Azure SQL Database and Azure Database for PostgreSQL Hyperscale, where they need it, on any Kubernetes cluster.

From the Azure portal, customers get a unified and consistent view of all their Azure data services running across on-premises and clouds and can apply consistent policies for security and governance across the different environments. Microsoft has a good hold in the enterprise cloud market; however, it has limited visibility among start-ups due to better offerings from AWS and Google Cloud in terms of pricing and services.

AWS’ hybrid cloud solution, Outposts, combines pre-configured hardware and software to the customers’ on-premise data center or co-location space to run applications in a cloud-native manner, without having to operate from AWS data centers. Currently, users can utilize EC2 instances and EBS volumes for storage. At a later stage, Outposts will locally support Amazon ECS and Amazon EKS clusters for container-based applications, Amazon EMR clusters for data analytics, and Amazon RDS instances for relational database services. However, until now, there has not been a multi-cloud solution being provided by AWS.

Google hybrid cloud solution, Anthos, is a combination of Google’s Kubernetes Engine (GKE), GKE on-premises and the Anthos Config Management console for unified administration and security policies across hybrid Kubernetes deployments. It can be run on customers’ existing servers. Anthos will also let users manage workloads running on third-party clouds like AWS and Azure, giving freedom to deploy, run and manage applications on any cloud. However, Google is yet to bring managed database services such as Cloud SQL and Bigtable to Anthos.

Azure Arc has shifted the paradigm of hybrid cloud management, by providing resource management on different types of servers as well as different cloud platforms. This feature will help its customers undertake cloud migration. This will also increase the cloud adoption for enterprises that are yet to migrate. Until now, Google Anthos is the closest competitor to Azure Arc, for example in the way it provides Kubernetes clusters across multiple cloud platforms. However, the absence of managed databases in Anthos gives Azure Arc an edge. AWS must boost its hybrid cloud management services to compete with Microsoft and Google. However, Microsoft will need to capitalize on this opportunity by targeting small and medium businesses as well as start-ups, as its competitors are chasing hard with their own multi-cloud management solutions.

Dell, HPE, Lenovo Lead as Cloud Server Market Surges to a US$86 Billion in 2018

Chinese OEMs and Taiwanese ODMs are beginning to gain market share and are challenging their US counterparts soon.

New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires – May 05, 2019

Ever since the rise of Big Data, there has been a lot of debate about the optimum way to store and process data. Today, both enterprises and individuals want to put their data on the cloud. Given this trend, Counterpoint Research expects the cloud services market to grow at a double-digit rate over the next five years. We estimate that in 2018, the cloud server market grew at 28% to US$86 billion.

The growth momentum in the cloud services space will also benefit cloud server manufacturers. So where is the demand coming from?

Prachir Singh, Senior Analyst at Counterpoint Research said, “Our analysis suggests that several factors are responsible for the rising demand for cloud servers. One of the main consumers for cloud servers are big data center companies and cloud service providers. Examples of big data center companies include the likes of Equinix and Digital Realty Trust, both of whom are real estate investment trusts or REITs. Among cloud service providers, the likes of Microsoft, Amazon Web Services (AWS), Google and other such companies are the major users of cloud servers. These companies also provide Infrastructure-as-a-Service (IaaS) whereby they offer instant computing infrastructure which is managed over the internet.”

Brady Wang, Associate Director at Counterpoint Research added, “According to our research, Google, Amazon, and Microsoft are spending heavily to increase their share in cloud services as well as the data center business. New players are also emerging in this sector. In the US, Facebook, Apple, and Intel are some of the big names making a mark in the data center segment. In China, Alibaba, Tencent, Baidu, and China Telecom are spending heavily to boost their data center businesses.”

Data centers and cloud services is already a multi-billion dollar industry. Today, both big and small enterprises depend on data centers and cloud services providers for their operations, For example, Instagram takes services from Facebook data centers while Netflix is a big consumer for AWS. Recently, Google announced its new cloud gaming service, Stadia, which opens up a new market for these cloud services providers. Content remains the king from video to gaming to music to smartphone apps to user-generated content all need an increasing amount of cloud storage. Further, the growing adoption of Artificial Intelligence across different applications is in parallel driving need for greater server processing power and thus semiconductor capabilities within the servers.

Such developments are helping leading server manufacturers like Dell EMC and HP Enterprise grow fast. Globally, in 2018, the top five companies held about 49% of the market share by revenue in cloud server manufacturing. Dell EMC and HP Enterprise are the biggest players, both holding 16% market share in 2018 in terms of revenue. Their offerings range from industry-grade racks to blade and tower servers. IBM is also a major player with its IBM Z mainframe servers. Other big players include Cisco, Oracle, and Lenovo.

But even as western companies have so far dominated the cloud server manufacturing business, in recent years Chinese OEMs are gaining market share. The likes of Inspur Power Systems and Huawei are the biggest contributors from China. In 2018, Inspur Power Systems’ revenue grew 72% YoY while Huawei’s server business grew 33% YoY. In the cloud server manufacturing segment, Taiwanese ODMs are faring much better. Players like Foxconn, Wistron, Inventec and other such ODMs have a 39% market share by revenue in the cloud server manufacturing space.

Exhibit 1: Cloud Server Market by Revenue Share % (US$) (2018)

Counterpoint Research – Cloud Server Market OEMs Revenue Share % (US$) (2018)

Source: Counterpoint Research Cloud Computing Tracker

Commenting on the growth being witnessed by Chinese and Taiwanese cloud server manufacturers, Wang said, “Chinese and Taiwanese companies are gaining ground in terms of shipments due to the lower prices that they offer. The larger data center companies are now buying cloud servers directly from these ODMs to cut costs. This has made the Chinese companies’ share increase drastically in recent years. For example, Inspur Power Systems increased its shipments share to more than 7% in 2018 from 3% in 2016. ODMs too increased their share in shipments to 25% in 2018 from 19% in 2016. We expect this share to increase in the coming years as more and more Chinese companies get into the data center business.”

Another industry benefitting from the rise in data centers and cloud service providers is the server microprocessor market. The big players in this segment are Intel and AMD. Intel is by far the biggest contributor, grabbing more than 97% market share by revenue in 2018. AMD, which held less than 1% share two years ago, has now captured 2% market share due to their new offering EPYC.

Counterpoint Research believes that the future is very bright for cloud server manufacturers. This is mainly due to the meteoric rise of a data-driven ecosystem. Cloud services will now use advanced technologies such as AI (Artificial Intelligence), Machine Learning, and Deep Learning alongside low-latency connectivity technologies such as 5G, which will help business and enterprises increase efficiency and power newer applications.

However, the biggest challenge for cloud server manufacturers as well as cloud service providers will be security. HP Enterprise has a platform, HPE Oneview, to efficiently manage and secure the data servers. We expect to see more of such bundled solutions in the future. We expect that the battle to be the lead cloud services provider will intensify in the coming years.

Background:

Counterpoint Technology Market Research is a global research firm specializing in Technology products in the TMT industry. It services major technology firms and financial firms with a mix of monthly reports, customized projects and detailed analysis of the mobile and technology markets. Its key analysts are experts in the industry with an average tenure of 14 years in the high-tech industry.

For press comments and enquiries please reach out to press(at)counterpointresearch.com

Analyst Contacts:

Neil Shah

Brady Wang

Prachir Singh

Follow Counterpoint Research
press(at)counterpointresearch.com

Top 10 IoT Trends and Predictions for 2019

IoT is in a continuous state of evolution and its definition is also shifting. In 2019, IoT is defined as: Connecting smart devices to the internet/cloud for transmission of data either from sensors or to actuators which can be monetized directly or indirectly within a secure zone, leading to an innovative solution most often with the help of post analysis transmitted data. The solution needs to either save human time or create ease of life. Furthermore, both AI and edge computing are rapidly intersecting with IoT and by the end of 2019, both will be an integral part of the definition of IoT.

The following are the top 10 trends and prediction expected in 2019:

Cloud to Edge: Edge Computing and AI will complement each other to dominate in IoT. Local data processing or Edge computing will start to become a necessity in most of the mission-critical applications. Hence, we will witness a transition from smart devices to Intelligent devices. Furthermore, quick autonomous informed action will drive edge intelligence and smooth the transition from cloud computing to edge computing.
Security Measures: 2018 was the year of realisation for all the players in the IoT ecosystem including consumers, that security cannot be neglected especially for the devices which gathers and stores your personal life data. Both data security and data Privacy will take centre stage in 2019. After GDPR, we expect US will also come up with a unified regulation for citizen data protection along with India’s IDPR. In 2019, we will witness a significant increase in investment and capital expenses on securing IoT product, platform, cloud and services.
Smart City Applications: For most cities, a true smart city is a bit far-fetched and it will not be that easy to achieve in a year. Smart cities are not just an IoT solution, they are more of an overarching solution that bundles various elements such as an ecosystem to manage traffic flows that combines, air quality monitoring, traffic management, smart parking, public mass transit, smart healthcare, smart surveillance and more. Hence, with one step at a time, these individual sub-applications that contribute to smart city applications can be achieved and are a more realistically achievable goal than combining many disparate elements often managed by different administrative agencies.
NB-IoT and LTE-M Base Applications: The cellular LPWA will be in hyper-growth mode especially for NB-IoT. Smart Meters will transition from non-cellular-based meters to standalone cellular LPWA meters. Smart Parking will get more room to grow especially after the full-scale deployment of both NB-IoT and LTE-M.
Consumer IoT: Consumer IoT is still largely an untapped opportunity for cellular operators and probably the toughest one. This is partly due to device and connectivity costs and, to some degree, due to data privacy & security concerns. The continuous growth in security and data privacy policies, such as GDPR, will help and grow consumer confidence. Most operators have a more robust package of services for the business sector, but this has not, yet, translated into the consumer sector. In 2019 we expect more bundles of offering of various consumer product and services from operators, especially for smart home products.

NB-IoT SoC: IoT System-on-chip (SoC)/System-in-package (SiP), where the MCU is integrated with modem/baseband will be the next wave of IoT evolution and it will change the dynamics of the IoT module market. This is mainly driven by semiconductor players like Huawei, GCT, Qualcomm, MediaTek, Sequans, Nordic, Altair, etc. Players like Huawei are looking to drive NB-IoT SoCs to sub-dollar price points for example with its Boudica series.
IoT Cellular Module: The industry is moving towards intelligent /smart modules always securely connected to the cloud, leveraging cloud computing. However, we will also see the increasing adoption of intelligence at the edge which is at the module level, leveraging AI-driven edge computing capabilities. This edge computing is driven by top cloud computing players such as Google, Microsoft, Amazon, FogHorn, and others closely working with a number of semiconductor and module vendors such as ST-Micro, NXP, Qualcomm, silicon-labs, USI, etc.
IoT Cellular Connectivity: According to Counterpoint’s IoT (Internet of Things) service, Global IoT Cellular Connections will reach 1.6 Billion by the end of 2019. In 2018, we saw some of the cellular LPWA application deployments adopting either LTE-M or NB-IoT depending on geography and respective operators’ LPWA network strategy. This will accelerate as some of the western operators which deployed LTE-M initially are now adding NB-IoT to their IoT network strategy roadmap. China will continue to lead global IoT cellular connections. Vodafone will be the largest operator outside China and AT&T will continue to lead the US in IoT cellular connections. However, connectivity represents only 12% of IoT value chain revenue and ARPU on the legacy and LPWA technologies are declining.
IoT Bundling of Product and Services: Every major player in the IoT ecosystem is aiming to be an end-to-end product and services provider, as revenue generation from the IoT ecosystem is fragmented across the value chain. Hence, IoT players are looking to capture maximum value by bundling IoT devices, secure connectivity, platform, and data management to capitalize on the overall opportunity. This is appealing to IoT users – enterprise or consumer – that may not have the expertise to stitch the disparate elements together and are willing to pay for an integrated solution. Telecom operators such as Vodafone, AT&T, and China Mobile are adopting this strategy as are various system integrators.
Emerging Country Adopting Cellular LPWA IoT: Emerging markets like India, Brazil and in Africa can offer tremendous scale but will likely be late followers compared to China in the path to connected everything. However, the massive growth opportunity remains in terms of cellular-IoT connections in emerging markets which will be possibly catalysed by operators such as Jio in India but more specifically from multi-market players such as Telefonica, MTN or Vodafone with plans to deploy LPWAN networks such as NB-IoT leveraging scale across their coverage markets. 2019, may not be the year of full-scale nationwide deployment but it will be the stepping stone for these countries.

Top

WATCH: Qualcomm Aware Platform Explained

Power of connectivity and location

WATCH: Qualcomm Aware Platform Use Cases Demo

Qualcomm Aware SaaS platform – API-driven chip to cloud connectivity

Initial capabilities: Location data, connectivity management, security and more

The Qualcomm Aware solution can be tailored to specific verticals, applications or use cases. It comprises of following capabilities:

Initially targeted use cases: Asset tracking

Success will be in partnerships and moving to self-serve model

Key takeaways: Chip-to-cloud partner-driven IoT and location platform approach

Counterpoint will be attending the Cloud Native Telco’s Forum 2022 on 24th August.

Segment Reports:

Client Computing: Consumer and Apple headwinds chip away $1.4B from the Client Group

Datacenter and AI (DCAI) proves to be The Revenue Guard for year 2022

Network and Edge (NEX) segment rolls due to the ’Edge’ Expansion

Accelerated Computing Systems and Graphics (AXG) revenue is at $219M

Mobileye logs record revenues at $394M

Intel Foundry Services (IFS) is on a promising start with $5B in deal value across nodes

Outlook for Q2 2022

Related Posts

Related Posts

Exhibit 2: Counterpoint CORE – Leading IoT Platform by Completeness i.e. End-to-End Capabilities

Hit the play button to listen to the podcast

Also available for listening/download on:

Related Posts

Source: Microsoft

<img decoding="async" class="aligncenter wp-image-29291 " src="https://www.counterpointresearch.com/wp-content/uploads/2020/05/Picture4.jpg" alt="Counterpoint Research Microsoft Azure " width="488" height="386" data-eio="l" /> Source: Microsoft

Source: Microsoft

Source: Microsoft

Smartphones and associated ecosystem:

Mobile gaming and OTT platforms:

Digital transformation of Enterprise: Cloud Computing, Collaborative tools, Remote working capabilities

Robotics and Autonomy:

Telecom Operators:

Coverage

Insights

Social media

Contact us

Term of Use and Privacy Policy

Source: Microsoft