Wednesday, July 22, 2015

Technicolor to Acquire Cisco's CPE Business for EUR 550 Million

Technicolor has agreed to acquire Cisco's customer premises equipment (CPE) business for approximately €413 million ($450 million) in cash and approximately €137 million ($150 million) in newly issued Technicolor shares,

The companies also agreed to enter into a strategic partnership that will allow both companies to develop and deliver next generation video and broadband technologies, with cooperation on Internet of Things (IoT) solutions and services. Technicolor and Cisco also have signed a long-term patent cross-licensing agreement that covers specific intellectual property and patents from both companies.

Technicolor said the acquisition will make it one of the global leaders in CPE , increasing its industrial and technological scale in all major geographies:

  • c.15% market share worldwide;
  • c.60 million devices shipped each year and a global presence with an installed base of c. 290 million set-top-boxes and c.185 million gateways in over 100 countries;
  • c.€3 billion n of pro-forma revenues in 2014, doubling Technicolor’s revenues in the Connected Home segment;
  • Synergies generation in excess of €100 million per annum on a run-rate basis, in particular in the field of supply chain and SG&A;
  • Strengthened innovation capabilities with over €250 million of combined annual spending in Research and Innovation.

In addition, Mr. Hilton Romanski, Senior Vice President and Chief Strategy Officer of Cisco, will join Technicolor’s Board of Directors.

“The strategic relevance of video to every consumer, business, city and country around the world is only growing, and the market is moving rapidly," said John Chambers, Chairman and CEO of Cisco. “This is the right time and we have the right company in Technicolor to drive the future of the CPE business to deliver what our customers and partners need, today and into the future. At Cisco, we are prioritizing our investments to deliver on our strategy of video in the cloud, and will partner with Technicolor to position the CPE business and employees for future success.”

Open Container Initiative Gains Early Traction

The Open Container Initiative (previously known as the Open Container Project) published its draft charter for comment and announced that 11 new companies are joining this industry-wide initiative to develop common standards for software containers. The OCI, which was announced just last month at DockerCon and is being hosted at The Linux Foundation as a Collaborative Project.

Companies signaling their formal commitment to this effort include AT&T, ClusterHQ, Datera, Kismatic, Kyup, Midokura, Nutanix, Oracle, Polyverse,, Sysdig, SUSE, Twitter and Verizon. Amazon Web Services, Apcera, Cisco, CoreOS, Docker, EMC, Fujitsu Limited, Goldman Sachs, Google, HP, Huawei, IBM, Intel, Joyent, Mesosphere, Microsoft, Pivotal, Rancher Labs, Red Hat and VMware are also committed to the Open Container Initiative.

As part of the formation, Docker Inc. donated its base container format at runtime to serve as cornerstone technologies under the governance of the OCI, while leadership from Application Container spec (“appc”) is also represented.

The OCI said work is underway on the draft specification, which is expected to be available for community comment within the month.

“The overwhelming interest in the Open Container Initiative is representative of both the opportunity containers offer for application development and the challenges we face with fragmentation,” said Jim Zemlin, executive director at The Linux Foundation. “With such strong community support and collaboration, we’re confident this effort will rise to the opportunity.”

VMware Now Has Over 700 NSX Paying Customers

VMware reported second quarter revenue of $1.52 billion, an increase of 4% from the second quarter of 2014, or up 8% year-over-year in constant currency. GAAP revenues were reduced by the amount of a settlement with the Department of Justiceand the General Service Administration ("GSA") for $75.5 million. GAAP net income for the second quarter was $172 million or $0.40 per diluted share, up 5% per diluted share compared to $167 million, or $0.38 per diluted share, for the second quarter of 2014.

Some highlights:
  • Geographically, sales in Asia Pacific performed best, followed by the Americas & EMEA
  • Cloud management penetration nearly 16% of installed base
  • VMware now has over 700 NSX paying customers, versus over 150 one year ago
  • VMware now has over 2,000 VSAN customers, versus over 1,000 two quarters ago 
  • AirWatch license bookings up over 60% YoY in constant currency
  • As of Q2 2015, VMware had 18,691 employees, up from 17,100 a year earlier.
"Our second quarter results are solid, building on our solid start to the year in Q1," said Pat Gelsinger, chief executive officer, VMware. "We experienced strong industry validation from industry analysts, partners and customers throughout the quarter and also unveiled our Business Mobility strategy and key announcements enabling organizations to transform their business processes."

Qualcomm Posts Tough Quarter, Announces Restructuring

Qualcomm reported revenue of $5.8B for its third fiscal quarter of 2015, down 14% from $6.8B for the same period a year ago. Net income (GAAP) was $1.2B, down 47% from $2.2B for the same period a year ago. Revenues, MSM chip shipments and EPS were within prior expectations.

Qualcomm also announced a strategic realignment plan designed "to improve execution, enhance financial performance and drive profitable growth."

The company outlined the following core elements of the new plan:

  • Aggressively right-sizing the cost structure by eliminating approximately $1.4 billion in spending, including an approximately $300 million reduction in annual share-based compensation grants; the company expects to achieve this run-rate by the end of fiscal year 2016
  • Reviewing alternatives to the company's corporate and financial structure
  • Reaffirming the company's plan to return significant capital to stockholders
  • Adding new Directors with complementary skills while reducing the average tenure of the Board of Directors
  • Further aligning executive compensation with performance, including returns on investment
  • Disciplined investment in areas that further Qualcomm's leadership positions, build upon the company's core technologies and capabilities and offer attractive growth opportunities and returns.

"We are making fundamental changes to position Qualcomm for improved execution, financial and operating performance," said Steve Mollenkopf, CEO of Qualcomm Incorporated. "We are right-sizing our cost structure and focusing our investments around the highest return opportunities while reaffirming our intent to return significant capital to stockholders and refreshing our Board of Directors. Importantly, our Strategic Realignment Plan is designed to drive meaningful change in the near term – without jeopardizing our ability to retain and build upon our technology leadership position and create long-term value for our stockholders."

Mellanox Hits Record Revenue of $163 Million

Mellanox Technologies reported revenue of $163.1 million for the second quarter of 015, up 11.2 percent compared to $146.7 million in the first quarter of 2015. GAAP net income was $19.2 million, compared to $10.5 million in the first quarter of 2015.

“We are excited to achieve record quarterly revenues and anticipate continued revenue growth and record annual revenues for the full fiscal year 2015. Our InfiniBand solutions continue to take market share on the TOP500 list, and we now connect 51.4 percent of the systems,” said Eyal Waldman, president and CEO of Mellanox Technologies. “We expect 25 Gigabit Ethernet to be the new 10, 50 to be the new 40, and 100 Gigabit Ethernet to do the heavy-lifting for data intensive markets.”

F5 Posts Revenue of $472.1 million, up 10% YoY

F5 Networks announced revenue of $483.6 million, up 2 percent from $472.1 million in the prior quarter and 10 percent from $440.3 million in the third quarter of fiscal 2014. GAAP net income was $93.2 million ($1.29 per diluted share), compared to $85.7 million ($1.18 per diluted share) in the prior quarter and $79.5 million ($1.05 per diluted share) in the third quarter a year ago.

“Solid sequential and year-over-year revenue growth during the quarter was driven primarily by continuing growth in software sales,” said Manny Rivelo, F5 President and Chief Executive Officer. “Within the past three years, quarterly revenue from the sale of software modules and virtual editions has more than doubled, accounting for more than a third of product revenue in Q3. As more of our customers deploy hybrid solutions and adoption of our software modules increases, we believe this trend will continue, augmented by a steady ramp in sales of our cloud-based Silverline subscription offerings. From a vertical market perspective, Enterprise and US Federal were significant contributors to the quarter’s revenue gains. Within our geographical regions, the US, the UK and northern Europe all delivered solid year-over-year growth."

FCC Eyes Residential Fiber Build-out as Condition for AT&T/DirecTV Deal

FCC Chairman Tom Wheeler has circulated a draft recommendation to his fellow FCC commissioners recommending that the AT&T/DirecTV transaction be approved with conditions concerning future fiber rollouts by AT&T. Namely, Wheeler would like 12.5 million customer locations to have access to a competitive high-speed fiber connection -- an additional build-out that is about 10 times the size of AT&T’s current fiber-to-the-premise deployment.

In a press statement, Wheeler also wrote that "the conditions will build on the Open Internet Order already in effect, addressing two merger-specific issues. First, in order to prevent discrimination against online video competition, AT&T will not be permitted to exclude affiliated video services and content from data caps on its fixed broadband connections. Second, in order to bring greater transparency to interconnection practices, the company will be required to submit all completed interconnection agreements to the Commission, along with regular reports on network performance. Importantly, we will require an independent officer to help ensure compliance with these and other proposed conditions. These strong measures will protect consumers, expand high-speed broadband availability, and increase competition.”

Infinera Posts Q2 Revenue of $207 Million, up 25% YoY

Infinera reported Q2 revenue of $207.3 million compared to $186.9 million in the first quarter of 2015 and $165.4 million in the second quarter of 2014. GAAP net income for the quarter was $17.9 million, or $0.13 per diluted share, compared to $12.4 million, or $0.09 per diluted share, in the first quarter of 2015, and $4.8 million, or $0.04 per diluted share, in the second quarter of 2014.
“Our outstanding second quarter results were driven by robust demand across multiple verticals, as customers continued to build next generation networks with Infinera. Differentiated products, exceptional customer experience and a vertical business model enable us to continue to grow our top line rapidly and our bottom line even faster,” said Tom Fallon, Infinera's Chief Executive Officer. “With the emergence of new cloud architectures, the strategic importance of optical transport has never been higher. Our technology leadership and superior service experience, puts Infinera in a particularly favorable position to benefit from this ongoing evolution in optical networking.”

CyrusOne Expands Mega Data Center in Carrollton, Texas

CyrusOne completed a new hall that adds nearly 60,000 square feet of colocation space and 4.5 megawatts of electrical capacity to its mega data center in Carrollton, Texas.

The Carrollton data center is the largest such facility in Texas at 670,000 square feet. The Carrollton data center , which is also one of the most energy-efficient, multi-tenant data centers in the United States, houses the infrastructure and 911-dispatch center for Carrollton, Coppell, Farmers Branch, and Addison, Texas. The communities have consolidated 911-dispatch services to form the North Texas Emergency Communications Center.

“Our customer base in this key market continues to grow rapidly,” said John Hatem, senior vice president, design and construction, CyrusOne. “Adding more space and power capabilities to our Carrollton facility ensures that we can continue to scale effectively and provide mission-critical infrastructure capabilities to meet our growing customer demand.”

HP to Power its Texas Data Centers with Wind Energy

HP has signed a 12-year power purchase agreement (PPA) for 112 megawatts (MW) of wind power with SunEdison.  The locally generated wind electricity is sufficient to power 100 percent of HP’s Texas-based data center operations, which span approximately 1.5 million square feet and support HP’s entire internal global information technology (IT) requirements as well as some customer accounts. HP currently operates five data centers in Texas, located in Houston, Hockley, Plano, and two in Austin.

HP said the deal enables it to reach its 2020 operational greenhouse gas (GHG) emissions reduction goal by the end of FY15, five years ahead of schedule. That goal originally aimed to reduce total GHG emissions from its operations (Scope 1 and Scope 2) by 20 percent of 2010 levels by 2020. The deal has also enabled SunEdison to begin construction on the South Plains II wind farm in Texas, which when completed will generate 300 MW of power.

“This agreement represents the latest step we are taking on HP’s journey to reduce our carbon footprint across our entire value chain, while creating a stronger, more resilient company and a sustainable world,” said Gabi Zedlmayer, vice president and chief progress officer, Corporate Affairs, HP. “It’s an important milestone in driving HP Living Progress as we work to create a better future for everyone through our actions and innovations.”

CenturyLink Completes Data Center Expansions in 6 Cities

During the first half of 2015, CenturyLink completed data center expansion projects in six markets: Boston, London, Minneapolis-St. Paul, Phoenix, Seattle and Washington, D.C. The company also grew its market presence into Australia and central Washington.

The expansions add approximately 10.8 megawatts of critical capacity, bringing CenturyLink's global data center capacity to more than 185 megawatts. The expanded facilities are built to support up to an additional 35 megawatts to meet future market demand.

"As enterprises increasingly consolidate their on-premise and sprawling data center infrastructures, and move workloads to the cloud, they want outsourcing options that are flexible, reliable and in specific geographic regions," said Drew Leonard, vice president of colocation product management at CenturyLink.

WireX Raises $9.3 Million for Cyber Forensics

WireX, a start-up based in Israel, raised $9.3 million for its network forensics solution.

The WireX Network Forensics platform continuously analyses all parts of the enterprise network and creates a comprehensive source of intelligence for security operations. WireX core technology, the Layer 8 Contextual Analysis automatically reveals the entire set of actions performed within each application and its associated contents. When a malicious activity is detected in the network, the big data platform correlates the analyzed data into a complete “network story” required to handle the incident, thus minimizing exposure time to threats.

The funding round was led by Vertex Venture Capital, with participation from existing investor Magma Venture Capital, Entrée Capital and the entrepreneurs and private investors Mickey Boodaei, co-founder of Imperva and Trusteer, Rakesh Loonkar, co-founder of Trusteer, and Idan Plotnik, founder of Aorato (acquired by Microsoft). Funding will be used to expand the Israeli-based R&D center and establish headquarters in the US.

"Organizations today are under constant pressure to identify successful attacks and respond quickly to minimize damage”, says WireX CEO, Tomer Saban. “While the ability to detect a suspicious network activity exists, the major challenge is to understand what the alert stands for and how to best respond. The reality is that existing forensics tools are too complicated to operate and require extensive know-how in both networking and security. The WireX platform solves this by automating analysis efforts to enable even entry level teams to resolve security incidents just like top level analysts.