Thursday, April 25, 2019

AWS continues to grow at 41% clip, profitability increases

Amazon Web Services (AWS) generated revenue of $7.696 billion in Q1 2019, up 41% over the same period last year.  Operating income for the business was $2.223 billion, up 59% year over year.

On a trailing 12 months (TTM) basis, AWS represents about 11% of Amazon's net sales on a global basis,
https://ir.aboutamazon.com/static-files/ade0787c-6617-4f69-8147-5d00ff0eb0bb

Some additional AWS highlights for the quarter:

  • Amazon announced renewable energy projects in Ireland, Sweden, and the U.S. totaling over 670,000 megawatt hours of renewable energy annually, as part of its long-term commitment to achieve 100% renewable energy powering the AWS global infrastructure.
  • AWS announced several new customer commitments and major migrations during the quarter: Gogo and Lyft are going all-in on AWS; Second Spectrum and the L.A. Clippers named AWS their official cloud and machine learning provider; Standard Bank Group and Vertafore selected AWS as their preferred cloud provider; the Guinness Six Nations Championship named AWS as their official technology provider; Volkswagen is joining forces with AWS to transform automotive manufacturing, powering the Volkswagen Industrial Cloud, and integrating more than 30,000 facilities and 1,500 suppliers and partners in Volkswagen’s global supply chain over time; and Ford and Autonomic, creators of the Transportation Mobility Cloud (TMC), selected AWS to power TMC and become the standard connected car solution for Ford vehicles, giving automotive manufacturers and software developers the cloud infrastructure needed to build innovative connected vehicle services at scale.
  • AWS continued to expand its infrastructure to best serve customers, launching the AWS Asia Pacific (Hong Kong) Region, and announcing plans for the AWS Asia Pacific (Jakarta) Region. AWS now provides 64 Availability Zones across 21 infrastructure regions globally, with announced plans for another 12 Availability Zones and four regions in Bahrain, Indonesia, Italy, and South Africa.
  • AWS announced the general availability of Amazon S3 Glacier Deep Archive, a new storage class that provides secure, durable object storage for long-term retention of data that is rarely accessed, and priced at $0.00099 per GB-month (less than one-tenth of one cent, or $1 per TB-month).
  • AWS announced the general availability of Concurrency Scaling for Amazon Redshift, a new Amazon Redshift feature that automatically adds and removes capacity to handle unpredictable demand from thousands of concurrent users. With more than 200 new features and enhancements in the last two years, Amazon Redshift is delivering an average of 10x faster query times. Pfizer, McDonald’s, Hilton Hotels Worldwide, Yelp, Intuit, Redfin, FOX Corporation, NTT DOCOMO, Equinox Fitness, and Edmunds are among the more than 10,000 customers collectively processing more than two exabytes with Amazon Redshift every day.
  • AWS announced the general availability of Amazon EFS Infrequent Access (IA), a new storage class for Amazon EFS that is designed for files accessed less frequently, enabling customers to reduce storage costs by up to 85% compared to the Amazon EFS Standard storage class. With EFS IA, Amazon EFS customers simply enable Lifecycle Management, and any file not accessed after 30 days gets automatically moved to the EFS IA storage class.
  • AWS announced Open Distro for Elasticsearch, a 100% open source distribution of the Elasticsearch analytics engine that includes features like security, alerting, cluster diagnostics, and SQL support. With all of the features of Open Distro for Elasticsearch licensed under Apache 2.0, developers can use it without any commercial use restrictions, providing customers a fully-featured, completely open source distribution that makes it easy for everyone to use, collaborate, and contribute.
  • AWS announced the general availability of Amazon WorkLink, a fully-managed service that enables companies to provide their workforce with secure one-click access to internal websites and web applications from their mobile devices without connecting to VPNs or using custom browsers. Amazon WorkLink removes the need to build and maintain complicated infrastructure and software deployments to secure mobile access to internal content while also reducing the risk of information loss or theft because content is never stored or cached on devices.

Intel's data centric revenue dips 5%

Intel reported first quarter revenue of $16.1 billion, flat year-over-year (YoY), with GAAP earnings-per-share (EPS) of $0.87, a decline of 6 percent YoY.

Intel's data-centric revenue declined 5 percent while PC-centric revenue grew 4 percent. The company also trimmed its outlook for the rest of the year.

"Results for the first quarter were slightly higher than our January expectations. We shipped a strong mix of high-performance products and continued spending discipline while ramping 10nm and managing a challenging NAND pricing environment. Looking ahead, we're taking a more cautious view of the year, although we expect market conditions to improve in the second half," said Bob Swan, Intel CEO.

Highlights:

  • In the Data Center Group (DCG), the cloud segment grew 5 percent while the communications service provider segment declined 4 percent and enterprise and government revenue declined 21 percent. 
  • First-quarter Internet of Things Group (IOTG) revenue grew 8 percent YoY (19 percent excluding Wind River1), and Mobileye achieved record first-quarter revenue of $209 million, up 38 percent YoY as customer momentum continued. 
  • Intel's memory business (NSG) was down 12 percent YoY in a challenging pricing environment. 
  • Intel's Programmable Solutions Group (PSG) revenue was down 2 percent YoY in the first quarter.

Comcast posts strong Q1 for its communications business

Comcast reported a strong quarter for its cable communications business with revenue increasing 4.2% to $14.3 billion in the first quarter of 2019, driven primarily by increases in high-speed internet and business services revenue. High-speed internet revenue increased 10.1%, driven by an increase in the number of residential high-speed internet customers and rate adjustments. Business services revenue increased 9.5%, due to an increase in the number of customers and rate adjustments.

Cable Communications’ capital expenditures decreased 19.4% to $1.4 billion in the first quarter of 2019, reflecting a lower level of spending on customer premise equipment and scalable infrastructure. Cable capital expenditures represented 9.5% of Cable revenue in the first quarter of 2019 compared to 12.3% in last year’s first quarter. 

Other highlights:
  • Total high-speed internet customer net additions were 375,000, total video customer net losses were 121,000, total voice customer net losses were 53,000 and total security and automation customer net additions were 17,000. 
  • The company added 170,000 wireless lines in the quarter.
  • Wireless revenue increased 21.4%, reflecting an increase in the number of customer lines, partially offset by lower device sales as more customers bring their own device. 
  • Other revenue increased 7.0%, primarily driven by increases in revenue from X1 licensing agreements and our security and automation services. 
  • Video revenue decreased 0.5%, due to a decline in the number of residential customers, partially offset by rate adjustments. 
  • Advertising revenue decreased 4.5%, primarily due to a decline in political advertising revenue. Voice revenue decreased 1.6%, reflecting a decrease in the number of residential voice customers.
  • Total Customer Relationships increased by 300,000 to 30.7 million in the first quarter of 2019. 
  • Residential customer relationships increased by 276,000 and business customer relationships increased by 25,000. 
  • At the end of the first quarter, 67.3% of residential customers received at least two Xfinity products. 
  • Adjusted EBITDA for Comcast's Cable Communications increased 9.8% to $5.7 billion in the f
  • First quarter of 2019, reflecting higher revenue, partially offset by a 0.8% increase in operating expenses. 
  • Video programming costs increased 2.8%, primarily reflecting higher sports programming costs and retransmission consent fees. 
  • Non-programming expenses decreased 0.5%, reflecting decreases in other operating costs, customer service expenses, franchise and regulatory fees and advertising, marketing and promotion costs, partially offset by an increase in technical and product support expenses. 


Juniper posts 7% decline in Q1 sales

Juniper Networks reported first quarter 2019 net revenues of $1,001.7 million, a decrease of 7% year-over-year, and 15% sequentially. GAAP operating margin was 4.3%, a decrease from 5.1% in the first quarter of 2018, and a decrease from 16.7% in the fourth quarter of 2018. GAAP net income was $31.1 million, a decrease of 10% year-over-year, and a decrease of 84% sequentially, resulting in diluted earnings per share of $0.09. Non-GAAP net income was $92.7 million, a decrease of 7% year-over-year and a decrease of 55% sequentially, resulting in non-GAAP diluted earnings per share of $0.26.

“The first quarter played out largely as we expected, with slightly better than forecasted sales across each of our core verticals,” said Rami Rahim, chief executive officer, Juniper Networks. “While we are pleased with the progress we experienced versus our guidance, we are not satisfied with these results and remain focused on delivering a return to growth later this year. We believe the investments we are making in our go-to-market organization, new products we are bringing to market and the acquisition of Mist Systems should position us to achieve this objective.”

Highlights:
Product

  • Routing product revenue: $375 million, down 8% year-over-year and down 16% sequentially. The year-over-year decrease was primarily due to Service Provider, and to a lesser extent Cloud, partially offset by strength in Enterprise. The sequential decline was due to Service Provider and to a lesser extent, Enterprise. The MX and PTX product families declined both year-over-year and sequentially.
  • Switching product revenue: $176 million, down 23% year-over-year and sequentially. The year-over-year decrease was primarily due to Cloud, and to a lesser extent, Service Provider. The sequential decrease was primarily due to Enterprise. The QFX and EX product families declined both year-over-year and sequentially.
  • Security product revenue: $68 million, down 7% year-over-year and down 35% sequentially. The year-over-year decrease was primarily due to Cloud, partially offset by growth in Enterprise. The sequential decrease was primarily due to Enterprise.
  • Service revenue: $383 million, up 3% year-over-year and down 5% sequentially. The year-over-year increase was due to strong renewal and attach rates of support contracts. Sequentially, the decrease was primarily due to timing of professional services projects.

Segment

  • Cloud: $223 million, down 18% year-over-year and down 6% sequentially. The year-over-year decrease was primarily due to Switching and Routing, partially offset by growth in Service. The sequential decrease was primarily due to Security and Routing.
  • Service Provider: $436 million, down 9% year-over-year and down 16% sequentially. The year-over-year and sequential decreases were primarily due to Routing.
  • Enterprise: $343 million, up 3% year-over-year and down 20% sequentially. The year-over-year increase was primarily driven by strength in Routing and to a lesser extent, Service and Security, partially offset by Switching. The sequential decrease was primarily due to Switching.


https://investor.juniper.net/investor-relations/press-releases/press-release-details/2019/Juniper-Networks-Reports-Preliminary-First-Quarter-2019-Financial-Results/default.aspx

ECI enhances its Apollo optical transport with 8x24CDCF ROADM

ECI has enhanced its Apollo optical transport portfolio with the addition of a high performance, contentionless 8x24CDCF ROADM based on wavelength switching technologies. 

ECI said its programmable wavelength switching far surpasses the capabilities of contentionless ROADMs available today, which are based on multicast switches (MCS). The 8x24CDCF ROADM enables add/drop port scaling to support capacity growth while eliminating the need for additional amplification to overcome optical losses in multicast switches. As a result, the 8x24CDCF ROADM offers more density, reliability and power efficiency at a lower cost.

Key features of the 8x24CDCF ROADM include:

  • Reduced cost: Next generation CDC ROADM networks see cost savings due to improved scalability of add/drop ports and removal of superfluous EDFA arrays.
  • Improved performance: Delivers scalability and reliable performance regardless of port count and lessens strict filtering requirements on transmitters and receivers. It also eliminates the performance degradation from out-of-band noise accumulation.
  • Increased Flexibility: Works in conjunction with ECI’s Apollo product line, including the recently debuted TM1200 programmable 1.2T dual channel blade, providing customers with a wide set of ‘mix-n-match’ modules from which they can choose to design the optical network of their choice.

“As mobile network operators (MNOs) prepare their networks for 5G, the demand they face is twofold: they must respond to the ever-increasing consumer demand for bandwidth, while also meeting the demand to remain profitable,” said Jimmy Mizrahi, head of global portfolio at ECI. “Thus, network operators are seeking technologies which allow them to cost-effectively, dynamically deliver and maximize network bandwidth in real time. The 8x24CDCF ROADM with its enhanced scalability, high-caliber performance, next-generation power efficiency and cost-savings is a unique addition to our family of ROADMs within the Apollo optical networking system, in line with our ‘as you like it approach’.”

The 8x24CDCF ROADM is compatible with all Apollo 9600 transport systems.

https://www.ecitele.com/productcat/apollo

Nokia reports a weak Q1 as it waits for 5G spending to accelerate

Nokia reported a weak Q1 but said it remains confident that spending by mobile operator will accelerate in the second half of the year.

Overall, Nokia's reported net sales grew approximately 2% to EUR 5.032 billion. A decline in Nokia gross profit was primarily attributable to Networks, which was negatively affected by broad-based gross margin erosion in Mobile Access.


Rajeev Suri, Nokia's CEO, states: "As the year progresses, we expect meaningful topline and margin improvements. 5G revenues are expected to grow sharply, particularly in the second half of the year, driven by our 36 commercial wins to date. Global services profitability should improve as we recover in a handful of large rollout projects, IP routing is now firmly back to growth given our product leadership, and optical networks continues its long run of growth. We are also seeing good underlying momentum in our strategic focus areas of software and enterprise, and we are moving steadily forward on our path to build a strong licensing business that is sustainable for the long-term.

"In terms of risks, one factor is our slow start to the year. In addition, competitive intensity has slightly increased in certain accounts as some competitors seek to be more commercially aggressive in the early stages of 5G and as some customers reassess their vendors in light of security concerns, creating near-term pressure but longer-term opportunity. We will continue to take a balanced view, and are prepared to invest prudently in cases where there is the right longer-term profitability profile. We are also progressing well with our previously announced EUR 700 million cost savings program."

Some highlights:

  • Networks net sales grew 4%. On a constant currency basis, Networks net sales were flat.
  • A slight growth in Networks net sales was due to IP Routing, Mobile Access and Optical Networks, partially offset by a decrease in Fixed Access.
  • A decrease in Networks gross profit was primarily due to Mobile Access and Fixed Access, partially offset by IP Routing and Optical Networks. 
  • A decrease in Mobile Access and Fixed Access gross profit was primarily due to lower gross margin. The increase in IP Routing and Optical Networks gross profit was primarily due to higher net sales.
  • In Q1 2019, Nokia was unable to recognize approximately EUR 200 million of net sales related to 5G deliveries mainly in North America, which the company expects to recognize in full before the end of 2019.


Orange and Vodafone extend network sharing in Spain for 5G

Vodafone and Orange agreed to extend their current active mobile network sharing arrangement in Spain to include 5G. The original network sharing agreement signed in 2006 covered passive infrastructure nationwide and active infrastructure in smaller towns. The agreement was subsequently renewed in 2012 and in 2016.

Under the new agreement, Vodafone will be able to offer its customers broadband access and other fixed services on Orange’s fibre-to-the-home (FTTH) network. Both companies have also agreed to explore potential co-investment opportunities to expand their fibre footprint in the future. The partnership is also expanded to include 5G. The terms of the new agreement allow active network sharing (including both the radio access network and high-speed backhaul) in cities with populations of up to 175,000 people, whereas the previous arrangement only enabled sharing in towns of between 1,000 and 25,000 people. Two thirds of the Spanish population will now be covered by Vodafone and Orange’s shared network agreement, with 14,800 sites expected to be shared vs. 5,600 shared today. The new agreement is expected to deliver cumulative opex and capex savings to Vodafone of at least €600 million over the next ten years.

Vodafone and Orange will continue to operate independent infrastructure in the biggest cities.

Nick Read, Chief Executive of Vodafone, said, “Vodafone is committed to deliver the best gigabit networks. As we approach a 5G world, we have a window of opportunity to design networks with other operators who share our passion for quality and coverage. These network sharing agreements mean we can provide a better service to customers, help us to address coverage requirements faster and more efficiently and also reduce the industry’s environmental impact.”

NTT increases investment in data centers

NTT has increased its capital in NTT Global Data Centers Corporation (NTT GDC), a subsidiary company handling centralized global construction, management and equipment wholesales for NTT group data centers.

NTT GDC is capitalized at 1.25 billion JPY, of which 60% will be had share by NTT Com. And three other NTT Group companies newly acquired shares in NTT GDC, namely, NTT Urban Development Corporation (20%), NTT Corporation (10%) and NTT Finance Corporation (10%), all as of today.

NTT GDC oversees investment and asset-ownership functions for data center construction. Established last year, the company has increased the NTT group’s capacity to respond to rising demand for data centers and to further strengthen NTT Group’s data center businesses.

Tokyo-based NTT GDC is led by CEO Ryuichi Matsuo, concurrently the head of Data Center Services for NTT Com.

A10 Networks posts Q1 revenue of $50.3 million

A10 Networks reported Q1 2019 revenue of $50.3 million, compared with $49.2 million in first quarter 2018. GAAP gross margin was 75.6 percent and GAAP operating margin was (21.8) percent. There was a GAAP net loss of $12.3 million, or $0.16 per basic and diluted share. Non-GAAP net loss amounted to $7.2 million, or $0.09 per diluted share.

“During the quarter, we continued to make progress on our priorities for 2019, which include driving growth and innovation in security, 5G and multi-cloud. Security product revenue grew 22 percent year-over-year to 34 percent of product revenue and we secured another 5G design win with a top mobile provider in Korea and forged ahead in our efforts to drive further product innovation that supports the commercial roll-out of 5G networks,” said Lee Chen, president and chief executive officer of A10 Networks. “We have a strong product portfolio, our win rate remains high and our team is energized by our opportunities in the market.”

T-Mobile US adds 1.7 million customers in Q1

T-Mobile US reported accelerated customer growth, all-time record-low postpaid phone churn of 0.88%, and record first quarter financials.

Q1 marked the 24th quarter in a row where T-Mobile delivered greater than 1 million total customer net additions.

Some highlights:

  • Total net customer additions were 1.7 million in Q1 2019, bringing our total customer count to 81.3 million, and marking the 24th straight quarter in which T-Mobile generated more than 1 million total net customer additions.
  • Branded postpaid net customer additions were 1.0 million in Q1 2019.
  • Branded postpaid phone net customer additions were 656,000 in Q1 2019, up 39,000 from Q1 2018, and Q1 2019 is expected to be the 21st consecutive quarter in which T-Mobile leads the industry in this category. Branded postpaid phone net customer additions increased year-over-year primarily due to record-low churn.
  • Branded postpaid other net customer additions were 363,000 in Q1 2019 primarily due to continued strength in gross customer additions driven by wearables.
  • Branded prepaid net customer additions were 69,000 in Q1 2019, down year-over-year primarily due to continued promotional activities in the marketplace, partially offset by lower churn.
  • Branded prepaid churn was 3.85% in Q1 2019, down 9 basis points year-over-year.
  • Total service revenues increased 6% to a record-high of $8.3 billion in Q1 2019. These results represent our best quarterly performance ever and we expect to lead the industry for the 20th consecutive quarter in year-over-year service revenue percentage growth. Branded postpaid revenues increased 8% year-over-year.
  • Total revenues increased 6% to $11.1 billion in Q1 2019 driven by growth in both Service revenues and Equipment revenues.
  • Branded postpaid phone Average Revenue per User (ARPU) decreased to $46.07 in Q1 2019, down 1.3%. The decrease was primarily due to a reduction in regulatory program revenues from the continued adoption of tax inclusive plans, a reduction in certain non-recurring charges, the growing success of new customer segments and rate plans, including T-Mobile for Business, and the impact of the ongoing growth in our Netflix offering, partially offset by higher premium services revenue and a net reduction in promotional activities. For 2019 as a whole, we still expect ARPU to be generally stable within a range from plus 1% to minus 1%.
  • Branded prepaid ARPU decreased to $37.65 in Q1 2019, down 3.2%, primarily due to dilution from promotional rate plans and growth in our Amazon Prime offering, partially offset by certain non-recurring charges.
  • Net income increased 35% to $908 million and EPS increased 36% to $1.06 in Q1 2019 primarily due to higher Operating income and lower Interest expense. The negative impact from merger-related costs on Net income and EPS was $93 million and $0.11, respectively.

“Our results speak for themselves and our business continues to fire on all cylinders! Record Service revenues, record Q1 Net income and record Adjusted EBITDA - all while we continue to share the story and lay out the facts that our game changing merger with Sprint will be a win for consumers,” said John Legere, CEO of T-Mobile. “We’re off to a fast start in 2019 with customer growth that accelerated year-over-year, record low churn and we expect to lead the industry in postpaid phone growth. We’re executing on our business plan and our guidance shows that we expect our momentum to continue.”

Cyxtera deploys Infinera Groove for DCI

Cyxtera Technologies, which operates over 50 data centers in major cities around the world, has deployed the Infinera Groove Network Disaggregation Platform to support delivery of secure and reliable high-speed data center interconnect services.

Cyxtera said Infinera's Groove solution enables it to cost-efficiently scale optical interconnect capacity between its data center facilities within major markets.

“We continue to invest in best-in-class technology that supports the performance and security requirements of enterprise-grade connectivity,” said Damion Lackamp, Senior Director, Interconnection Products at Cyxtera Technologies. “As we expand our data center facilities, the Infinera Groove solution provides the capacity, efficiency and security to boost the performance of our network infrastructure in a highly compact form factor.”

Verizon names 20 more U.S. cities for 5G in 2019

Verizon, which officially activated its 5G mobile network in parts of Minneapolis and Chicago earlier this month, names 20 additional cities where it will launch 5G this year:  Atlanta, Boston, Charlotte, Cincinnati, Cleveland, Columbus, Dallas, Des Moines, Denver, Detroit, Houston, Indianapolis, Kansas City, Little Rock, Memphis, Phoenix, Providence, San Diego, Salt Lake City and Washington DC.

Early customers in Chicago and Minneapolis should expect typical download speeds of 450 Mbps, with peak speeds of nearly 1 Gbps, and latency less than 30 milliseconds.

Verizon also began accepting preorders for the Samsung Galaxy S10 5G — Samsung’s first 5G smartphone in the U.S.

Rackspace appoints Kevin Jones as CEO

Rackspace announced the appointment of Kevin M. Jones as Chief Executive Officer, replacing Joe Eazor.

Jones most recently served as Chief Executive Officer of MV Transportation, the largest privately owned transportation contracting firm in the United States, employing more than 20,000 transit professionals in 153 locations across North America. Before joining MV, Kevin held global leadership roles at DXC Technology, Hewlett Packard Enterprise (HPE), Dell, Hewlett Packard (HP) and Electronic Data Systems (EDS).

See also