In this episode of Infrastructure Matters, Steven Dickens and Camberley Bates discuss their experiences at various industry events, including Dell, IBM, Nutanix, and Lenovo earnings announcements. They highlight major announcements and key trends, particularly focusing on AI and multicloud. Dell emphasized their AI Factory and PowerStore updates, while IBM focused on hybrid cloud and AI developments through watsonx and AWS partnerships. Nutanix’s collaboration with Dell and Lenovo’s strong non-PC revenue growth were also discussed.
Key Points:
- Dell Event Highlights: Major focus on AI, with the introduction of the AI Factory and significant updates to PowerStore.
- IBM Think Conference: Emphasis on hybrid cloud and AI, featuring developments in watsonx and partnerships with AWS.
- Nutanix and Dell Partnership: Integration of PowerFlex with Nutanix’s AHV virtualization offering for scalable solutions.
- Lenovo Earnings Report: Strong growth in non-PC revenue and expansion in data center and AI solutions.
- Overall Industry Trends: Shift from AI proof-of-concepts to production deployments and infrastructure focus to support AI workloads and multicloud environments.
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Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this webcast. The author does not hold any equity positions with any company mentioned in this webcast.
Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.
Transcript:
Steven Dickens: Hello and welcome to episode 42 of Infrastructure Matters. It’s just me and… I say just me and Camberley today. It’s obviously the Camberley show that I get to co-host. Hey, Camberley. How are you?
Camberley Bates: I’m doing good. Actually, I’m doing pretty good. I got some sleep last night.
Steven Dickens: Oh, that’s good. That’s good. We like that. We like sleep. Yes, I feel your pain. So we’ve been on the road this week. I’m going to go to you first, Camberley. You’ve been out at Dell. Our team was scattered to the four winds this week. I think there was Twilio, there was Dell, there was IBM. I’m going to cover the IBM piece. There was earnings, the back end of earnings, and coverage as well. So we’ll get into that.
Camberley Bates: Nutanix.
Steven Dickens: And Nutanix. We had team out at Nutanix. I think Informatica was this week as well. I don’t know whether we had… We were joking about it this week that there’s just… This is the week. I think there was eight events running this week. So without further ado, let’s go to you and Dell. Lots going on.
Camberley Bates: So, Dell. Big show. It was all about multicloud, hybrid cloud. Just kidding.
Steven Dickens: So they didn’t talk about AI at all?
Camberley Bates: No. No, they just skipped right over it. Didn’t even talk about it. Whatever.
Steven Dickens: It was all server and storage speeds and feeds and no AI.
Camberley Bates: Well, the curious thing is they did kick off with talking about PowerStore, but everything was really about AI. PowerStore had a major release. That’s what, for those who don’t remember, this is their follow on to Unity and CLARiiON and all their famous stuff, the core, one of their major systems that they have. And then they released a QLC version. They released a lifetime trade up to the controller kind of capabilities. They did a big software release on it that boosted up in terms of performance. And that’s a freebie to everybody. So you download your software and off you go and you get a whole bunch more performance. So it was a really good announcement for that.
But the really big bulk of it, but congratulations to the PowerStore people for getting that one out, it’s great system, was all the AI, and this concept called the AI Factory. And I will have a little bit more detail. I know Bob Sutor is writing up on the AI Factory and what it is and et cetera. But I was pre-announced on this. We were pre-announced and pre-briefed on it before we go to the show. And I was kind of like, “Okay, thank you very much. It’s a nice marketecture. Thank you very much. Here we go. Yeah, you’re building boxes and you’re integrating systems.” But this is what the real important thought process was, and that is that we are going to be standing up a large environment that will eventually be a very large environment that will be driving and creating this data that is coming out of these analysis systems. And those systems are going to be, yes, they’re going to be some of the training piece of it, but the big bulk of the business is going to be long range, is going to be the inference engines. And that is where we’re going.
I’m going to give you some stats here that they cited and that’s coming from their research. I sat down and talked to Mindy Cancila who was talking about how they’ve been developing this research. But they see that 83% of the data is on premises. And I think it said 53 is coming from the edge. What that means is that if you’re going to develop an AI system, you’re going to move the compute to where the data is. And the data today is still on premise, or most of it. And that’s what they found. That’s what they know they have to do. They’ve been implementing some generative AI systems. Some of it, for instance, customer service or a website chatbot kind of thing where I’m in… You have to move that processor to where the data is in there and they’ve got to be close together because you cannot stand the latency that’s going to go over big line on that.
So with that, the other thing that they did, and this is the future between 2027 and 2030, they expect the compute to exceed 27 with 30 zeros following it, if you can imagine how big that is, of that flops. And this is going to be for the AI piece of it. And to look at the amount that it’s going to be is that this is going to be 75% of the data center requirements is going to be for AI, and they expect that 90% of that is going to be inferencing. 10% will be training, but this is, we’re going to train and then you got to get to the execution of it. So they’re looking at where is this going and what do you have to do in order to set up this AI Factory, if you will. And when they think about factory, they’re thinking about, “I’m inserting data and I’m outputting the inference engine information.”
And that’s why they’re calling this an AI factory. And the fact that it’s so much technology that has to go in there in order to drive that and the entire company is behind this and walk step. I mean, it was very clear you didn’t have this group over here doing this, this group over here doing this. You’ve got their entire-
Steven Dickens: It was – they were kind of all on the same page.
Camberley Bates: Right. And they’re all on the same page from a product management, starting at product… Actually, starting with their own systems internally, working through product management, requirements, R&D work, et cetera. It’s coming from the top, but with major leadership from Jeff Boudreau, who runs the entire AI solutions piece, general manager. So really, really significant effort on their part. I’m going to give a shout-out to one of my co-analysts out there, a gentleman by the name of William Fellis, who works for FiftyOne nowadays. And we were in the meeting with Jeff Boudreau. And at first I kind of giggled at it, and then I said, “God, he is right.” And he’s right about not just about Dell but about the entire tech industry is he said, and I may not quote exactly, he says, “It’s like AI has rescued Dell from multicloud.” And I said, “Oh, the entire tech industry has been…”
Because last year we were kind of talking to AI. The year before, it was all multicloud. We were still talking multicloud. But this wave that’s going on right now and over many, many years, if you buy off that this is going to play out, yes, it’s a huge massive investment that all the industries are going to be making. Yes, there’s going to be bumps in the road. Yes, there’s going to be problems. But how do you stand up not only the systems such as Dell is going to deliver, but also the capabilities that IBM is going to be delivering, which is really the software layers and all those pieces because there’s some big sticky wickets in terms of the data pipeline problems that have to be addressed, in terms of the training and the modeling and everything else. So with that, I’m going to mention one other item and then I’ll pass it over to you because I know I’ve been talking straight for 10 minutes almost, it feels like.
Steven Dickens: I’m hanging on every word, so I’m sure the listeners are too.
Camberley Bates: Oh, good. Let’s go. So one of the items that they announced was with Hugging Face. And This gets into the modeling piece of it. With Hugging Face, there is now a… There’s Hugging Face Dell Enterprise Hub there. What they’ve done is they’re putting up models up there that you can go download, go download. There’s specific some of the vertical or use case models, you can download it. I mean, it’s super easy. Or at least when they demoed it, it was super easy. You download that, you can select the processor you want to drop this thing on, and off you go.
I mean, this is the innovative kind of things that they’re looking at doing to say, “What can we do to streamline this?” Even though primarily the company is a infrastructure matters company. They’re an infrastructure company. But they’re looking at all the different things that they can do because they have felt the pain of trying, and successfully and some bumps in the road, successfully setting up some major use cases that they know are having huge impact into the company. Things like developer velocity, which is the coding kind of capability, content, everything, content. Cutting down and getting accuracy up to 90% of their content is a whole lot better, and also with the people that are dealing with the content. Customer service, website, assistance, et cetera.
So all of those things that they’re looking at and they’re having to go through this process of saying, “Do we have repeatable, stable, systematic, simplistic processes that we can actually train something on, and then do we have the data to do that?”
Steven Dickens: We’re in the deployment phase of AI. We’re past the hype. We’re in the deployment phase.
Camberley Bates: Yes. And the pain is going to be in not only just… The pain is going to be in setting those environments up, which they’re heavily addressing how to set up all the networking, the servers, create some flexibility within there. And then they’re also moving up a bit of the ladder to say, “Can we help folks on those other pieces which have to do with what’s going to happen with the data management piece of it, what’s going to happen with the model recommendations?” So really great show. I usually can come out poking at a few things and that kind of stuff, but this time around I was this time around coming out of this particular show, whatever, yes, it was extremely… You can see the energy in the company and the enthusiasm in the company.
Steven Dickens: Well, I mean, I think there’s a whole bunch of research notes from what I see in our channels that are going to be coming out, so I’m going to be looking for those. It’s kind of a shame that Dell and IBM ran their shows at the same time because I think you would’ve had as much of a good time at IBM as you obviously did at Dell and vice versa. But pivoting to IBM. IBM had Think this week. Smaller show than some of these big uber sort of 40,000 people shows. Intentional by IBM I think. They’re on I think two or three versions of this format of Think. There’s not the big sort of multi vendor expo. It’s all IBM. It’s all consistent. It’s all very well themed. And I think that’s enabled them to tell a really good story and a really consistent story.
IBM is now laser focused on two things, hybrid cloud, AI. And we’re starting to see that come through in all of their discussions. And there was a really good presentation by Rob Thomas that talked about what they’re doing in the hybrid cloud space. Arvind took more of the AI piece. Very good sessions, AMA sessions with Arvind and Dario Gill who leads research, and Rob and a whole bunch of the team. But it’s really clear that IBM’s getting very, very focused now. And when starting to see real depth come behind watsonx.
And that’s consistently coming through the organization. I spent time with Ross Mauri this week, who runs the mainframe part of the business. And you can tell there’s a connection point between what he’s doing with research and Dario’s team around a watsonx assistant for the mainframe. And he’s on message, he’s consistent, and he’s connected to the broader message that Rob and Dario are running for assistance, for instance, across the whole business.
So going back to what you were saying, this is where good leadership is. This is where this holistic sort of company view of, “We’re all on the same page.” Just to give an example of what this assistant is for the mainframe. There’s obviously a huge skills gap. There’s challenges there. What they’ve done is ingested all the red books. Ingested the support database. So a huge corpus of data of all the support calls that have been logged. Being able to pull that together, put it behind a large language model, and then be able to present that as an assistant. I conservatively think it takes you five years to grow assistant program for the mainframe. And I think what they’ve doing is probably taken two or three years off the back end of that.
So the ability to kick off tasks, be able to reorder tables, be able to actually not just query a knowledge base, but then actually do things and kick things off in context of the assistant. They launch one for BI. There’s a whole bunch of these assistants that are now coming from IBM, all business focused, all sort of technology focused. So there’s a real consistency there. The other key takeaway from me from Think this week, as I say, Rob Thomas did a really good job. I’m starting to see a pattern emerging around what they’re doing in the automation space. I think IBM had some assets there. I think obviously with the Ansible assets from Red Hat, what’s going to be coming with HashiCorp. But then bring that through to what they’ve got from a FinOps portfolio with Instana Turbonomic easy for me to say, and the Cloudability stuff from Apptio.
Starting to see sort of those five assets come together in a really consistent automation type portfolio. That’s going to be, I think… Saw that vision for the first time from IBM this week. So that’s going to be really interesting of how that pans out. Obviously couldn’t say too much about Hashi, but you’re starting to see the layer cake and that we’re going to see AI and automation in that software portfolio. I think another, I mean, kind of throwaway comment, but really helped me with the QRadar divestiture. One of the analysts, I’ll give another shout out, Allie Mellen from Forrester, asked the question to Rob Thomas, how should we think about the IBM security portfolio post-Qradar, obviously moving to Palo Alto? And Rob gave me a really good answer of, “We’re going to get out of some of that threat detection kind of,” I don’t track this base, “but sort of XDR seam type space, and we’re going to focus more in on data security. So he talked about Guardium and that sort of data flow. Obviously foundational from an AI perspective.
So IBM’s going to retain its focus there. So that was the first time I’d kind of heard the, “Guardium’s still important to us,” data and securing that data layer was foundational. So that’s fascinating for me. I mean, I think another key thing that came out of it, and I met with AWS at the event, a really strong focus on getting IBM software onto the hyperscale providers. If you wind back five or six years, IBM was trying to be a hyperscaler and compete on IaaS. Complete shift. IBM’s now partnering with those, what they see as IaaS providers, and saying, “Running watsonx on AWS.” So-
Camberley Bates: Is that mostly for development though? I mean, is it mostly that they’re considering that… Are they looking, say… Because I know there’s a bunch of mainframe initiatives that are going on in that place, but that seemed to be mostly a developer kind of space to play, less of a running your entire operational kind of environment on the cloud.
Steven Dickens: Yeah. So I mean, from a watsonx point of view, I think we’ve got really good models with Granite. We’ve really got that. And 17 models with some really interesting performance data. I know from previous history, trying to get performance claims out of IBM and through legal is hard. So I kind of do believe the claim. Some really interesting Granite performance claims.
But to go back to your point, I think from that watsonx layer, IBM’s not really caring where you run it. So if you’ve got an AWS relationship for infrastructure with EC2 and you want to run it there, they don’t mind, whereas they would’ve minded before. So I think interesting kind of pragmatism on the public cloud and some of those hyperscalers. So fascinating week. Chance to connect with a whole bunch of IBMers from my past. But really, really fascinating to see how laser focused Arvind’s got them on hybrid cloud and AI. So back to you for Nutanix. I know Paul was out at Nutanix.
Camberley Bates: Actually, no, he wasn’t. He was at something else. Guy Courier was at Nutanix.
Steven Dickens: Our team was everywhere this week. So I’ve not dug into the Nutanix stuff. How did that go?
Camberley Bates: Well, I haven’t dug into Nutanix at all, except Guy was slacking me about something about Nutanix and Dell’s PowerFlex. And we went, “Huh?” And so I said, “Well, let me see if I can find out more.” So he’s over in Barcelona, I’m in Vegas. I was at the partner event. They had a great partner, they’ve got some great partners there, but they had a partner event. And Denise Millard, they had a separate session after there was Q&A with the press. It was press and analysts or just analysts, I can’t remember. Anyway. So I raised my hand and I asked the question about PowerFlex and Nutanix and how they were going to position this with their other products. And she had this look on her face at me, which was…
Steven Dickens: I’m really glad you asked that question.
Camberley Bates: Either that, well, complete surprise. So evidently Nutanix had pushed out the press release or announced it at their conference, but I don’t think totally Dell knew. Because then late that night or somewhere around nine o’clock, I get the press release from Nutanix, actually from Dell that Nutanix put out to take a look at what was going on. It was like, oops. This happens. We’ve seen it happen before. But anyway, so it’s a really interesting announcement. So here’s what’s going on.
And sufficed also I want to say that at Dell, they really didn’t talk about virtualization at all, except for on this. When I got into this, and this is when we started talking to the virtualization strategy. Start first by Dell saying they’re working on quite a bit of different areas, but what they’re trying to do is make sure customers have… There’s an ecosystem that they have that customers have choice. And they understand. They’ve clearly understand some of the agony that’s going on with the vSphere pricing or the VCF pricing, etc. So they’re working through there to say, “Okay, so what do the customers want to do? You want to stay on VxRail because it’s a well-loved HCI? You want to do ABC? You want to do something else? We’ll help you wherever you want to go.”
So the Nutanix one here is they have a product called AHV, which is their virtualization offering. And it’s highly integrated. When you grow it, you really grow compute and storage. And this actually started a conversation a year ago, so this is before all this stuff. This is not something that happened since January and the numbers rolled out, where there were customers, and Dell had customers that had Nutanix, that had smaller pods, if you will, or clusters, they couldn’t scale, couldn’t bring them out, so they started having conversation about using PowerFlex, which is a distributed storage product, also known originally as ScaleIO. But anyway, so how do you do this with PowerFlex providing a block capability with Nutanix? So this is what they announced is the ability to take out the storage that Nutanix has, put in PowerFlex, be able to scale this thing to a much larger environment.
And to give you an idea about PowerFlex, it’s a block device. It’s big. I mean, the average systems are in the petabyte sizes with 10 nodes going on. It’s not small. It’s usually a big environment that’s going and being deployed. So this is going and targeting to their larger customers, the Global 2000 area that have got those environments and they want to bring those offerings to market. So nicely done.
Steven Dickens: Interesting. I need to dig into that one. Maybe I need to spend some time with Guy and understand the implications of that. As I say, we can’t be everywhere all at once. We can’t be at IBM, Nutanix, and Dell all at the same time. So the final one on the docket here, and I’m just catching up today, got a research note kind of half written collaborating with Olivier Blanchard on it, around Lenovo earnings. So they announced Q4 and full year results, I think yesterday. Some highlights. Up 10% year-on-year, which is impressive I think for those guys, double digits.
Camberley Bates: Mostly from AI stuff, or is that-
Steven Dickens: Yeah, yeah. So I think, and this stat stood out for me, non-PC revenue mix. We get briefed on this. So obviously Lenovo’s got a huge PC business. A historic high of 45%. So the non-PC revenue closing in on being half of their business now. I think that’s interesting for me because that says the revenue’s coming from the data center and their services play. All of the business units showed growth. So they split their business into the infrastructure business, all their data center, the devices side, and then they’ve got a services play. So those are the kind of three big chunks of Lenovo. All of those demonstrated growth. Obviously AI’s starting to come through.
Camberley Bates: Did they mention any of the… I’ll take a look at the transcript, but did they mention anything on the storage? Because they’ve done really super well on the entry level, and they’re trying to push up into the mid-range and gain market position there with their offerings that they have. Most of their offerings are… They OEM them. But they’re still growing that data center stuff.
Steven Dickens: From a data center point of view, up 15% in Q4. I mean, as you say, the storage piece, they’re coming up those pricing tiers. What are they, number three now overall in revenue in storage? The continuing conversation we keep having with them is how are they going to get to maybe some of the traditional power store types plays you were seeing from an EMC perspective evolved. How do they get into that type of tier 0, tier 1 type storage space? I think they’re doing a fantastic job of executing in those lower price bands and the server connects type stuff.
I mean, TruScale’s starting to come through. Services up across the board. So double-digit again on services. TruScale’s a key part of that. A lot of the stuff they’re doing around some of the AI sort of packaging pieces, like you were talking about with Dell’s AI Factory, that fits into the services solutions and services group. So solid numbers across the board. I’ve got my post-earnings quarterly briefing today, so I’ll get more detail on what’s driving that. But I think what came out of my comments from you from Dell and what I’m going to see here from just my first blush reading of Lenovo is we’re now into the deployment phase of AI. It’s not some crazy POC where it’s kind of like, “Let’s throw some stuff up on the cloud and really sort of get trials and POCs stood up in lab environments.” I think we’re now past that. We’re at the point where we’re starting to see production deployment. That’s starting to show through into some of the quarterly results in the strategy from what you saw from Dell. So I think we’re probably now at the point where AI starting to manifest itself in some of the quarterly earnings. Be interesting to see whether that growth continues quarter on quarter.
Camberley Bates: Yeah. So one of the things I didn’t mention was Dell’s AI PC. And in addition to all the other big numbers that I threw out there in terms of growth or where this market is going, they’re expecting all PCs to be revved, which makes sense, between now and 2030, which is about 28 billion, you said? How many was it? 2 billion PCs, the entire PC inventory, which would make sense. But many of those are going to be, or maybe all of them will have some level, they already have some level of GPU in there because of the pixels and everything else, but we’re looking at more powerful GPUs or MPUs in there to roll out. And in fact, we’re seeing that huge impact on those systems as they’re coming out in the market. So very-
Steven Dickens: I mean, I don’t cover the intelligent devices group stuff for Lenovo. That’s where I’m collaborating with Olivier. I think Lenovo’s seeing that same trend in its devices business. And obviously they’ve got a, what they call pocket to cloud portfolio. So we’re seeing that also from their Motorola business. So all the stuff that the Qualcomms and those guys and the Broadcoms and those guys are looking at the absolute far edge, i.e. your phone.
You’ve got to remember, whilst in the US it’s a sort of fifty-fifty split between iPhone and Samsung, maybe more even iPhone in the US, other parts of the world Motorola is a massive player. So I think they’re number three behind iPhones and Samsung. So they’re a massive player in this market. So that kind of pocket to cloud play for Lenovo. So interesting. I’m going to be looking… I’ve literally got my Google Doc open and Olivier’s going to do his bit on intelligent devices. So we’ll see how that pans out. But fantastic week as always. How we managed to get through that in 29 minutes is kind of beyond me.
Camberley Bates: I don’t know. I have pages and pages and pages of notes and trying to get it down to… I touched on page one. I talked to page one and that’s it. So you guys, there was so much more that’s going to be rolling out here.
Steven Dickens: You did a good job on the summary of Dell. I’m interested to chat to you about what’s going on there. But we always try and keep this to half an hour every week. So at that point, I’ll wrap us up. You’ve been watching another episode of Infrastructure Matters. Please click and subscribe and do all those things and share it with your friends, and we’ll see you next week. Thank you very much for watching.
Camberley Bates: Bye.
Author Information
Camberley brings over 25 years of executive experience leading sales and marketing teams at Fortune 500 firms. Before joining The Futurum Group, she led the Evaluator Group, an information technology analyst firm as Managing Director.
Her career has spanned all elements of sales and marketing including a 360-degree view of addressing challenges and delivering solutions was achieved from crossing the boundary of sales and channel engagement with large enterprise vendors and her own 100-person IT services firm.
Camberley has provided Global 250 startups with go-to-market strategies, creating a new market category “MAID” as Vice President of Marketing at COPAN and led a worldwide marketing team including channels as a VP at VERITAS. At GE Access, a $2B distribution company, she served as VP of a new division and succeeded in growing the company from $14 to $500 million and built a successful 100-person IT services firm. Camberley began her career at IBM in sales and management.
She holds a Bachelor of Science in International Business from California State University – Long Beach and executive certificates from Wellesley and Wharton School of Business.
Regarded as a luminary at the intersection of technology and business transformation, Steven Dickens is the Vice President and Practice Leader for Hybrid Cloud, Infrastructure, and Operations at The Futurum Group. With a distinguished track record as a Forbes contributor and a ranking among the Top 10 Analysts by ARInsights, Steven's unique vantage point enables him to chart the nexus between emergent technologies and disruptive innovation, offering unparalleled insights for global enterprises.
Steven's expertise spans a broad spectrum of technologies that drive modern enterprises. Notable among these are open source, hybrid cloud, mission-critical infrastructure, cryptocurrencies, blockchain, and FinTech innovation. His work is foundational in aligning the strategic imperatives of C-suite executives with the practical needs of end users and technology practitioners, serving as a catalyst for optimizing the return on technology investments.
Over the years, Steven has been an integral part of industry behemoths including Broadcom, Hewlett Packard Enterprise (HPE), and IBM. His exceptional ability to pioneer multi-hundred-million-dollar products and to lead global sales teams with revenues in the same echelon has consistently demonstrated his capability for high-impact leadership.
Steven serves as a thought leader in various technology consortiums. He was a founding board member and former Chairperson of the Open Mainframe Project, under the aegis of the Linux Foundation. His role as a Board Advisor continues to shape the advocacy for open source implementations of mainframe technologies.
