launches services to deliver value beyond customer engagement

By Jillian Mirandi, Senior Analyst broadens its portfolio beyond customer engagement to drive business transformation

Leveraging its expanding ecosystem of partners, industry expertise and global presence, positions itself as the strategic advisor that will deliver tailored solutions to assist customers in business transformation. A record number of large third quarter deals, revenue growth of nearly 29% year-to-year and early traction of Analytics Cloud inside and outside’s install base show the company is communicating this message effectively and customers see the value of beyond CRM.

Messaging around Analytics Cloud (“analytics for the rest of us” — catering to the line-of-business user but not necessarily tied to applications) indicates’s long-term strategy to run customers’ entire businesses on the Salesforce platform. Co-opetive partnerships, such as that with Microsoft, and improved third-party integration enabled through the launch of Salesforce1 Lightning Connect allow to enable hybrid IT scenarios that help customers fully transform their businesses. Continue reading

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A resurgence in its core business fueled Cisco’s return to revenue growth in 3Q14

By Scott Dennehy, Engagement Manager and Senior Analyst

Cisco leveraged its dominant market share position and broad portfolio to capture spending driven by cloud, mobility and security

Recovery in its Switching business, improvement in NGN Routing and strong growth in Services and Security enabled Cisco to achieve overall revenue growth for the first time since 3Q13, with growth of 1.3% year-to-year. The company achieved growth despite sluggish demand from service providers and in emerging markets, with total product orders down 10% and 6% year-to-year, respectively, due to its extensive portfolio of products and services that enable Cisco to capitalize on customer spending driven by cloud, mobility and security. Continue reading

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Cisco Services generates another quarter of growth as the focus on cloud, analytics and security resonates with clients

By Elitsa Bakalova, Analyst

Cisco Services continued to be the revenue growth engine for Cisco Systems as the network continues to be of central importance to the technology transition

Cisco’s strategy to pool all of its network infrastructure offerings and present them to clients through the services umbrella is working. Cisco Services’ revenue increased for the 46th quarter in a row, up 4.5% on a year-to-year basis, to $2.8 billion in 3Q14, and now accounts for 30% of total Cisco revenues, the second largest revenue contributor to Cisco Systems. Deferred revenue for services also experienced year-to-year growth of 1.5% to $9 billion in 3Q14, suggesting services revenue will continue to expand. Services solutions grew to encompass consulting within the cloud, analytics and security arenas. New skills sets obtained through investments, an evolving leadership team and flexibility in the Cisco operating model are contributing to success, especially in the services and products areas. Product-related revenues expanded 0.4% year-to-year, providing total revenue of $12.3 billion for Cisco Systems, up 1.3% from the year-ago quarter in CY3Q14, Cisco’s fiscal 1Q15. TBR expects services to continue to contribute a major portion of growth to Cisco’s projected corporate revenue growth for 4Q14 in the range of 4% to 7%. Continue reading

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NetApp doubles down on cloud, analytics and convergence to reinvigorate its business

By Stephen Belanger, Analyst

NetApp repositioned its portfolio to take advantage of opportunity by emphasizing its cloud, analytics and converged capabilities

NetApp is strengthening its portfolio capabilities through product investments and partnerships to help customers navigate cloud and analytics technologies. In 3Q14, NetApp demonstrated its commitment to cloud and analytics with the release of Cloud ONTAP and its converged infrastructure partnership with Unisys. TBR believes NetApp’s 3Q14 earnings indicate initial success in these next-generation technologies, despite declines from legacy businesses such as OEM continuing to drag down corporate revenue. Continue reading

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Yahoo acquires BrightRoll for $640 million to bolster video and programmatic ad tech stack; leaves few independent vendors in video segment

by Seth Ulinski, Senior Analyst, Ad Tech

After making several acquisitions largely focused on mobile and app-based technologies in 2014, on Tuesday Yahoo made a significant move in the video advertising space, buying BrightRoll for $640 million. This move counters that of peer AOL, which purchased Adap.TV for just over $400 million in 3Q13. Meanwhile, Facebook purchased LiveRail for an estimated $400 million in 3Q14. Given that BrightRoll’s solutions and reach are comparable to those of Adap.TV and LiveRail, TBR believes Yahoo may have paid a premium compared to its peers. Continue reading

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Rackspace clarifies its strengths in the cloud market to sharpen focus on outcome buyers

By Jillian Mirandi, Senior Analyst, and Meaghan McGrath, Research Analyst

Rackspace refines messaging to clarify its differentiation around cloud managed services

Following a tight-lipped, four-month evaluation of strategic options that we believe included potential acquisition talks with CenturyLink or HP, among others, Rackspace announced in September that it will not pursue the merger and acquisition route. The company announced that reaccelerated revenue growth and the potential for a positive coming year were among the reasons for deciding to remain independent. During Rackspace’s 3Q14 earnings presentation, the company posted revenue growth of 18.3% year-to-year to nearly $460 million, the company’s largest revenue growth in six quarters, and the third sequential quarter of accelerating revenue growth after nine consecutive quarters of growth deceleration. TBR believes Rackspace will be able to maintain this reaccelerated revenue growth in 2015 with the company’s increased efforts to bring clarity around its offerings and position in the market.

Rackspace has taken a stance in many areas of its business over 3Q14, namely clarifying the company’s position in the market, price transparency and both differentiation from, and support of, competing vendors. The company has expanded its messaging beyond touting the Fanatical Support group, to point to specific changes the company is making to ensure clarity around pricing, expanding practice areas and offering and a clear differentiation between Rackspace’s managed cloud and other, unmanaged cloud providers. Executives on the earnings call noted that these clarified areas are “the plays that our sales team and our marketing teams are generating demand around. These are the places that our sales teams are focusing on, and when you get a focused effort with referenceable customers your sales teams feel powerful.” TBR sees Rackspace targeting customers with this pointed clarification and sales and marketing approach, and the ultimate driver behind adoption of Rackspace’s managed offerings. Continue reading

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A rare hiccup in smartphone revenue growth will not hinder Lenovo’s goals to dominate computing device markets and disrupt the data center landscape

By Jack Narcotta, Analyst 

A sound strategy for emerging markets and its ability to adapt to a changing IT market sustained Lenovo’s revenue and profit growth

Lenovo’s growing scale in the IT marketplace, bolstered by the completions of its acquisitions of Motorola Mobility from Google and IBM’s System x server business, speak to the degree to which Lenovo is pursuing its goals aggressively to become the leading PC and mobile device vendor and upset the established order in data center markets. Even without the additions of its two new business units, Lenovo’s revenue grew 7% year-to-year to $10.5 billion in calendar 3Q14, the third time in the last four calendar quarters that Lenovo’s revenue exceeded $10 billion. Continue reading

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