Adam Lashinsky is on assignment. Heather Clancy is a contributing editor at Fortune.
As tough as the industrywide transition to cloud computing has been for PC-era software companies, it has been even tougher for data center hardware suppliers. Just ask IBM, which has recorded revenue declines for its last 15 quarters. Or EMC, which is looking for salvation in Dell’s arms. But the darkest storm clouds are starting to lift, at least for hardware companies that have retooled their equipment for the cloud era. Sometime during the past 12 months, it appears many businesses swapped the question “Should I move my IT operations to the cloud?” for this one: “When is the best time for our cloud transition?”
Under the cloud computing model, applications and other IT resources are delivered via pools of servers, storage devices, and networking gear over which businesses may have very little management control. Slowly but surely, organizations of all sizes are opting to use these services for a larger portion of their IT operations.
That means, of course, that fewer companies are buying servers and other gear for their own data centers. Instead, more are opting to rent from the likes of Amazon Web Services, Microsoft, and Google (the “Big Three” of cloud computing). The latest evidence lies in purchasing patterns reported last week by market research firm IDC.
Last year spending on hardware meant for big clouds increased 22% to almost $29 billion. Indeed, almost one-third of the fourth-quarter equipment revenue attributable to tech giants Hewlett Packard Enterprise, Dell, Cisco, EMC, and IBM was generated by hardware intended for cloud installations. We can expect more of the same this year: IDC projects spending on cloud-related computing hardware will top $38 billion.
One of the biggest beneficiaries of this transition has been Cisco, which sells equipment converging features of servers and networking gear. Revenue for that portion of its product portfolio grew almost 36% during the fourth quarter to $802 million, reports IDC.
Of course, the hardware manufacturers are by no means out of the woods. Many of the biggest cloud service providers—including Facebook and Amazon Web Services—are opting to build their own gear. Now that momentum is building, it’s up to the likes of Hewlett Packard Enterprise, Dell/EMC, and Cisco to prove their value.
BITS AND BYTES
British tabloid confirms interest in buying Yahoo. You can add the U.K.’s Daily Mail to the list of suitors interested in purchasing some of the Internet company’s rich portfolio of digital media properties. Interested bidders have until April 18 to submit formal offers. (Wall Street Journal)
Tablet sales fall way short of expectations. Several years ago, research firm Gartner projected annual sales of tablet computers would top 300 million by 2015, but an alternate reality has emerged. Several factors are at play, including slow upgrade cycles, rapid innovation among smaller mobile devices, and keyboard nostalgia. (Re/code)
Feds accelerate push for self-driving car rules. The National Highway Traffic Safety Administration last week held a public hearing to collect input that will be used to shape recommendations for regulating autonomous vehicles. The agency hopes to draft its guidelines by July, which some industry groups think may be rushing things. (Fortune)
BlackBerry plans two more Android phones. The iconic smartphone company intends to release two midrange models during 2016, after sales of its high-end Priv product fell short of expectations, according to remarks from BlackBerry CEO John Chen. The company sold just 622,000 phones in its latest fiscal quarter—less than what Apple sells in a single day. (The National, Fortune)
The web’s biggest blogging platform gets more secure. WordPress, the content management system behind more than 1 million websites, now encrypts every website hosted on its platform for free. That means it’s less likely visitors will have their personal information compromised. (Fortune)
Why we should be less concerned about innovation—or at least, less obsessive about it. Lee Vinsel and Andrew Russell are professors studying technology at the Stevens Institute of Technology in Hoboken, N.J. But, perhaps surprisingly given their specialty, they say recent conversations about technology have placed too much emphasis on “innovation,” at the expense of something just as important—maintenance.
Starting with a conference last weekend and a lengthy essay at Aeon, they’re working to emphasize the work done, not by the Elon Musks and Bill Gateses of the world, but by the engineers, cleaners, and repairmen who keep things running.
Their thesis is underscored, in part, by America’s ongoing infrastructure crisis—exemplifed by a wave of train crashes, subway meltdowns, and poisoned water. Even fairly early stage companies need their internal “maintainers”—skilled, smart people who keep customers happy and systems running. If that work is devalued, innovative ideas can’t live up to their potential. (Fortune)
IN CASE YOU MISSED IT
Can Sprint find enough change between the seat cushions to survive?
by Aaron Pressman
Facebook opens the floodgates to “sponsored content” by Kia Kokalitcheva
Face it, you’re with the smartwatch you got last Christmas by Mike Feibus
Sony’s PlayStation VR headset is already pretty amazing
by Lisa Eadiccio/Time
BMW restarts car-sharing program in U.S. with new name and tech
by Kirsten Korosec
The case for why Disney should buy Netflix by Lucinda Shen
ONE MORE THING
Meet new robotic assistants from Hitachi and Alphabet. The Emeiw3 humanoid robot from Hitachi, due commercially in 2018, will “speak” four languages, including English and Chinese. It might be answering questions in public places, including airports or hospitals. Fewer details are available about a new bipedal robot designed by Schaft, a robotics company owned by Google’s parent company Alphabet. (Wall Street Journal, TechCrunch)
|This edition of Data Sheet was curated by Heather Clancy.|