IBM at Morgan Stanley Conference Notes

Deborah DiSanzo – General Manager of IBM, Watson Health

Need scale to collect data for AI

“artificial intelligence is not easy, so you need to have the scale in the resources to be able to do it. I think when I think about our advantages, I do think that we took the IBM crowd and we really did make it medical grade and we’ve spent a lot of time — it’s not just having the data because now everybody comes and says to me, so many million records, but it’s like what is the quality of those records; have you curated them? Have you cleaned them? They’re ready to put — are they ready to do something important. 10 years, 65 AI services specified for help. IBM knows the work that went into that, tremendous amount of work and then finally our collaborations have gotten so much more rich, though fundamentally if you do good work for your clients and partners then you get to do more good work. “

HP at Citi Conference Notes

Cathie Lesjak – CFO

Japanese competitors have benefited from weak yen but that is normalizing

“So, when it comes to Japanese competitors, one of the advantages that they have had and this isn’t an alternatives question, this is kind of the core business. The Japanese have had a fairly weak yen if you look at oh the last couple of years that has enabled them to be very price aggressive on a unit prices perspective. What we’re seeing is that that hasn’t stepped up significantly despite the fact that the yen has weakened a bit. And so it seems that it kind of normalizing.”

Buying market share can be bad economics

“As the CFO, I get quite nervous about having a goal of market share, because you could go out and buy a lot of bad units. And you could high-five on the market share. So, it’s important that it’s profitable and then it’s then consistent with our strategy.”

Price increases as commodity prices increase

“So, as we talked about earlier, using our balance sheet is one of the levers that we use. That is not related to price increases directly. The second lever that’s available to us to deal with commodity cost increases, is increasing prices. And we’ve done several price increases.”

Customers may expect price decreases now that the dollar has come down

“we keep talking about the fact that commodity costs are increasing, which they are and as well the fact that until recently the currency has been a bit of a challenge as well. So, when you sit and talk to the customer and you help them understand why you’re increasing prices, you have heightened their awareness as to what drives price increases. So, we expect that with the weakening dollar, we will have to drop prices much more rapidly than we had in the past. The customers are going to basically say, I stuck with you when you were raising prices, because I understood why you needed to do it. Now, there is an opportunity for you to lower prices, we expect to lower price. And so we do expect the prices will come down if the dollar stays kind of at the levels that we’re seeing or weakens further.”

Have the opportunity to disrupt manufacturing with 3D printing

“We have the opportunity to disrupt a $12 trillion manufacturing industry. We are playing today in plastics, 3D-printed plastics, which is the biggest market for 3D at this point in time. You are seeing huge companies, just look at this opportunity and realize that it’s going to make a difference to their manufacturing.”

Alphabet at Citi Conference Notes

Diane Greene – Senior Vice President-Google Inc.

Now “with every business becoming a data business”

“Cloud was originally a place for startups, a place for surplus capacity, sort of a cost savings thing. And now with every business becoming a data business, the Cloud, people are moving to the Cloud to be secure and they’re moving to the Cloud to gain competitive advantage.

Cloud was focused on startups and now its focused on enterprise

“Sure. I think when I came in we were mostly focused on startups. And obviously, the enterprise opportunities, at least, the slide deck, I mean the enterprise opportunities what we are going after. And we’ve made huge strides. So we had to really get all the table stakes functionality and things like identity and access controls and networking configurations and all the compliance and regulatory. So we got that done. That’s – it’s all there. Any enterprise customer can be fully deployed on us now. And then we have to build out the go-to-market, which – certainly it’s the direct sales force and an immense number of customer engineers, Google quality customer engineers, which our customers value. We set up professional services. We set up an office of the CTO, Customer Reliability Engineering advances, we set up a lot. And then it was partnering because we really – the most important thing is our ecosystem”

What is the Kubernetes?

“we want Kubernetes to run extremely well on-premise, to run extremely well in every Cloud. We are pretty certain that it’s going to run the best in our cloud.”

Some examples of how companies are implementing machine learning

“we are working with basically every customer on machine learning. And we can even bring them into our advance system labs and work with them. The public customers I can talk about are like Airbus that did use the vision to build a model to take the clouds out of their images. Something they’ve never been able to do in 20 years or Ocado one of the biggest online retailer in the UK, they’re based in the UK. And they were able to use our machine learning to detect customer sentiments and know how to handle calls in their call center or FamilyMart over in Japan used – it’s a huge chain of neighborhood grocers where they stock at three times a day and they can – they are using our analytics and machine learning to figure out how to stock things to predict what to do.”

We are investing heavily in cloud but we’re partnering with companies like SAP and Salesforce

“we are hiring incredibly aggressively. Alphabet is investing in Cloud. So it’s we are not sort of saying, oh, we’re done with our sales force and they are very Googley. We are building out a serious enterprise sales force. But I would argue that Cloud demands are different approach. It’s a very – if you think about what’s going on when a company moves to the Cloud, this is something they had in-house where they run it all and now they’re just building these assembling almost these applications and putting them in containers and we’re kind of doing everything else. That’s where it’s going. And so we need to partner with them.”

Built our own “TPU” for use in the cloud

” we have a lot of GPUs in Google Cloud, and we work very well with NVIDIA. And the TPU, so Google does an immense amount of machine learning internally as well as externally. And so for the big data machine learning, training and using the models, we saw an opportunity to build a custom chip that would give an order of magnitude performance advantage, which actually saves us a lot of money and also lets us do a better job on the machine learning because you could turn things around so quickly. And then it’s natural to put it in our cloud for our users. So the really exciting thing about Google Cloud is we now have a vehicle to take Google’s really ongoing technical innovations and share them with the world with every company and every geography of every size. That’s pretty exciting. And so it’s a natural thing to share the TPUs and we’ll also take advantage of all the innovations coming out of NVIDIA as well.”

HP Enterprise 3Q17 Earnings Call Notes

Meg Whitman

Industrial internet of things

“In the internet of things and in particularly the industrial internet of things, we see a tremendous opportunity as customers are looking to transform everything from retail environments to manufacturing floors.”

Uber is an interesting company

“listen, I thought, I was called in very late in the Uber search and I thought it was a very interesting business model to me. It’s actually quite similar to Ebay in many ways. It’s very disruptive, that relies on a community of drivers just like Ebay relies on a community of sellers and the growth prospects reminded me of Ebay in its early days and as you know, I am also an investor in Uber and – but, in the end that wasn’t the right thing.”

UK is challenged

“Yes, so, listen, I think when Brexit was first announced, we did see a pause in the demand in the UK market. No question about it because customers were trying to decide do they want to build their next datacenter in the UK or should they be building that datacenter someplace else in Europe. I think we are still feeling some after-effects from Brexit, because it’s not clear exactly how this is all going to work. So I would say, the UK market is a bit challenged for us. It’s not only Brexit, it’s also the public sector that is cutting back spending quite dramatically. So the UK is not one of our stronger markets. It’s a very important market for us. But I wouldn’t say it is doing as well as the rest of Western Europe and frankly the United States, Canada, Latin America and Asia are all outperforming the UK right now.”

Government shutdown is not our friend

“So, the federal business is an important part of our business in the United States. I think it’s roughly 10% to 15% of our revenue in the United States and we have an excellent position there. We’ve got longstanding relationships with almost every agency and every part of the federal government. So, a government shutdown would probably a blip honestly for us. There would be a speed bump there. What I will say is a lot of these purchases are long head, they buy and then the delivery is over a long period of time. So probably that would not – if there was a government shutdown in October, that probably wouldn’t affect us until a little bit later in 2018. But listen, the government shutdown I don’t think is our friend or anyone else who sells to the government. That’s not our friend and we certainly hope that will not happen.”

Tim Stonesifer

Competitive pricing in a challenging commodities environment

“From a macro perspective, we are seeing some overall improvement in the market, but continue to see competitive pricing in a challenging commodities environment. Currency remained unfavorable, but to a lesser extent than prior quarters with a 70 basis point year-over-year headwind to revenue in Q3. HPE’s performance in the U.S. excluding Tier-1 improved as core servers returned to growth and networking performance accelerated but storage remain challenged. Revenue in Europe has also returned to growth with strong results in Germany and broad stabilization across Western Europe. Asia Pacific similarly improved with double-digit growth in Japan, China and India.”

Harvey has had a substantial impact on our Houston operations

“Also, as Meg mentioned, Hurricane Harvey has had a substantial impact to our Houston operations. Our top priority has been ensuring the well-being of our employees during this challenging time. From a business perspective, we are continuing to assess the impact. Fortunately, we have a limited amount of production in Houston which we’ve been able mostly shift to other locations. So we don’t expect the disruption to our customer deliveries.”

Currency should become a tailwind in 2018

“The other thing that we should see some headwinds, although I am a little bit hesitant is foreign exchange. I mean, if rates stay where they are today and hold, then that would certainly provide some tailwinds for us. Now we’ll have to see what happens at the beginning of the year, but as I said, if they hold where they are today, that should provide some uplift.”

Full year impact of DRAM next year and a difficult pricing environment

“As far as some of the pressure points that we’ll continue to see, although DRAM may soften a little bit, just keep in mind, we are going to have a full year impact of that versus what we had this year. So we do expect that to be a significant pressure point going into 2018, when you compare year-over-year, I mean, DRAM cost will be roughly double. We are expecting and we will see what happens but we continue to expect to see a very difficult pricing environment. We are not anticipating that easing up in the near term. So that would provide some pressure and then we are obviously going to continue to invest in the business.”

Commodity cost pressure but will shift from high cost to low cost countries

“So, again, we are going to continue to see commodity cost pressure, one of the things you’ll see that we did very effectively with ES is we are going to hire people as we shift rules from high cost countries to low cost countries, we are going to be out hiring people and then we are going to continue to invest in the business. But net-net, it should drive some significant savings for the business going forward.”

Intel 2Q17 Earnings Call Notes

Brian M. Krzanich – Intel Corp.

Bought Mobileye

“We expect to close the acquisition of Mobileye in the third quarter, several months earlier than expected. Autonomous driving is a massive compute workload that will disrupt industries and save lives and we are investing to win in this important segment”

PC TAM down 15% vs four years ago

“We’re executing well to our strategy to transform from a PC-centric company to a data-centric company that powers the cloud and billions of smart and connected devices. The PC TAM is down more than 15% versus four years ago. Despite that headwind, our revenue is up more than 15% and our operating profit has grown more than 30%. More than 40% of our revenue now comes from our data-centric businesses outside the PC sector”

Look, enterprise is going to continue to decline

“look, enterprise is going to continue to decline. We estimate, and again, this is just based on what we get from our customers, talking to the industry. It’s going be in the high single-digit decline. I think you’ll see quarters like Q2 that was 11%. You’ll see quarters like Q1 that were 3% or 4%. We’ve seen quarters higher than the 11% over the last couple years. So it’s going be lumpy as we see this shift, but the overall macro shift of enterprise to cloud or traditional on-prem systems to cloud is going to continue.”

Move to 3D X-Point

” And our real goal is then to move more and more of the business towards the 3D XPoint as we move into next year because that really differentiates us again as we really change the hierarchy between memory and storage as the data center DIMM memory systems come out.”

Microsoft FY 4Q17 Earnings Call Notes

Satya Nadella

The core currency of any business is converting data into AI

“The core currency of any business going forward will be the ability to convert their data into AI that drives competitive advantage. It all starts with having support for the comprehensive data estate spanning Azure Database, Cosmos DB, Data Warehouse, Data Lake, combined with SQL Server. Azure Cosmos DB is the industry’s first globally distributed database service. It enables customers to securely and reliably power data-intensive applications at unprecedented scale and performance, from IoT to AI to mobile and much more.”

Examples of AI

“Retailer Jet.com is using Azure Cosmos DB to process trillions of transactions every day. Customers are infusing AI into their products & services using Azure AI infrastructure and services such as Bot Framework and Cognitive Services. Sabre, a leading technology provider to the global travel industry, is piloting AI-powered solutions for travel agencies to better serve customers. And Dixons Carphone is using Azure and our Cognitive Services to boost customer engagement and provide a more consistent, seamless experience across online and in their stores.”

AI at the edge

“If you look at some of the most exciting things that are happening in the cloud, is cloud applications that actively require an edge Azure IOT, or Azure Stack are becoming the runtimes of the edge where you do need not only the ability to do compute and storage, but to run the AI inference and the edge. So to me that’s what we’re building to. It’s actually a big architectural shift from thinking purely as a migration to some public cloud to really thinking of this as a real future distributed computing infrastructure and applications, but I quite frankly feel very, very good about leading and so in that context our server license revenue will fluctuate based on what the macro is and these transitions and mix shifts, but from a forward-looking perspective, I want us to be very, very clear that we anticipate the edge to be actually one of the more exciting parts of what’s happening with our infrastructure.”

IBM 2Q17 Earnings Call Notes

Martin Schroeter

The cognitive opportunity is a global one

“The cognitive opportunity is a global one, it’s not centered in New York or Boston or Silicon Valley; but you can’t just look and listen in those places. In healthcare alone, you’d miss that this quarter the first healthcare provider in Latin America is deploying Watson for oncology, and Baheal Pharmaceutical Group is bringing Watson for genomics to clinicians across China. In fact, 80% of the hospitals who’ve adopted Watson for oncology are outside of the U.S., and that’s just healthcare, we have Watson deployed with other leaders like Berdasco [ph], Honda and Vodafone as well. So across industries and around the world our clients realize that data, in fact their own data is the route of competitive advantage for all companies.”

80% of the world’s data is not searchable on the worldwide web

“80% of the worlds data is owned by enterprises, it’s not searchable on the worldwide web, it’s customer data, and patient data, clinical data, supply chain data, transaction data and companies want to unlock and exploit that data; and so that’s why enterprises will move to cognitive on the cloud with someone they trust who has leading tools and industry expertise and a data model and business model consistent with their goals, that is the IBM cloud plus Watson.”

IBM cloud built for enterprise

“Clients are moving to the IBM cloud because it’s built for the enterprise and can optimize workloads across hybrid environments. The underline architecture protects our clients data and insights and is optimized for cognitive workloads to help our clients create new business models. The American Airlines example I referenced earlier is a great example where we’re building on the partnership we signed last year. American Airlines announced this quarter they will move to the IBM cloud and use it as the foundation for their digital transformation. They will migrate critical applications including AA.com, their customer facing mobility app and their global network of kiosks.”

Cisco at Bank of America Conference Notes

David Ulevitch – SVP and GM, Security Business

Security is a top priority

” would start out with the market, which is that security remains our customers’ number one priority. So, it’s not the kind of topic that shows up in the board room once a year for an update, it’s on the permanent agenda of every major company around the world and I think that customers are looking for to figure out, who can help them really actually make sense of the IT landscape that they are now operating in.”

The IT landscape has changed dramatically over the last 25 years

“That IT landscape is dramatically different than the one we’ve had over the last 25 years, right. So people work outside the office. They’re using all kinds of devices, often times their own devices. They are using cloud services. They are adopting public pods. So, the IT surface is dramatically different and they need help securing that ”

2020 is not that far off

“I used to say by 2020. But then I go — I realized people don’t know when 2020 is, they think that’s like way off from the future. So now you say again three years ”

Customers are demanding consolidation of endpoint agents

“So, today the endpoint market is super interesting because it’s a barbell distribution. You have Symantec, McAfee and Trend Micro, they own more than half the market in the endpoint, after that, it’s a total cats and dogs, nobody has more than any — like a couple — maybe a couple low-single digits in market share and there’s nobody that has a meaningful position there, and yet we see the amount of spend happening in the endpoint increasing. We have customers that are demanding consolidation of endpoint agents.”

AWS is incredible

“So I think that Amazon, first of all AWS is incredible, we use AWS at Cisco, we use a bunch of the other cloud offerings as well. And what you’ll find is they built an incredible sort of APIs, for customers to take advantage of, but that also creates to our complexity and in fact that’s not necessarily their core competence. So they’re still looking. That’s what I talked about with the firewall, even though the Amazon provide APIs to drive essentially security policies, the glue is in the tools to enable us at a very complicated and they’re just primitives and they’re world class primitives, but they’re just the primitives.”

Microsoft at JP Morgan Conference Notes

Chris Capossela

We are not focused on trying to be the cool kid

“I would say that for us, the most important thing is to really get people to understand that Microsoft is not really focused on trying to be a cool kid. We are not focused on some of the things that I think our tech competitors focus on. We are really about empowerment. ”

We market what we have instead of any visionary future

“we try to market what we have as opposed to any visionary future. I am never a huge fan of marketing stuff that people can’t that can go use. And so it’s one thing to do a sexy demo or give a speech that you have some far-off vision that people get excited about. But I don’t think you market those things. I think those are used at important moments in time. The marketing has to be about telling how companies can do better than they are doing today using your stuff. So we really try to focus on what’s possible today.”

We know how to deal with enterprise

“I certainly think that the track record that we have in the enterprise plays well to Microsoft’s strength. The account teams that we have calling on large enterprises. The fact that most are running their email through our cloud and email, believe it or not, has become just this incredibly important line of business system and we have many, many CEOs telling me, hey, I can deal with an SAP outage, I can’t deal with an email outage for a second. So you have to have, 99.999%, five nines isn’t enough for your email system. I think having that track record and that relationship where customers trust us, they know there are going to be mistakes made, but they trust us to respond to those mistakes really well”

Customers want balance between MSFT and AWS

“I also speak to lots of companies that are on AWS and they tell me the today 90% of my spend in the cloud is AWS and only 10% of it is on Azure and I already have a goal to make that 50-50. And that has actually nothing to do with, they believe in us more, they literally just want balance of trade. They literally just want the ability to sort of say, hey, it’s going to be better for my company if I use multiple vendors here and obviously a given that Amazon is in the top spot and we are in the same spot, we have a lot of headroom from simply playing balance of trade across the cloud.”

Cisco Systems’ (CSCO) Q3 201

Charles Robbins – CEO and Director

Cyber crime can have devastating effects

“Last week’s WannaCry ransomware attack was another example of the devastating impact cybercrime can inflict on individuals, companies and countries around the world. Since Friday’s attack, our Talos cyber threat intelligence team has been working around-the-clock to dissect the WannaCry ransomware, understand its attack patterns and keep our customers protected. It’s important that the tech industry and customers work together to defend against these attacks from cyber criminals.”

What´s driving areas of weakness

“I’m just going to tell you what drove the weakness in these areas so you can assume the other pieces of the business were pretty much as expected. In the Americas, it was primarily the U.S. federal — I mean, there’s so much uncertainty around budgets. The U.S. federal business was a significant driver. Mexico, there has been a lot of uncertainty in Mexico and that was actually down 49% for us year-over-year. So it was — there’s a great deal of uncertainty around the investment landscape there. And then the third element would have been the Service Provider business in the Americas. So those were the things that really drove the orders in the U.S. In Europe, the U.K., the currency issue in the U.K. is real and was very impactful in that business. And then we continue to see pressure in the Middle East relative to oil prices.”

Subcriptions and software business is growing

“We set out 18 months ago to transition the business to one of more software and subscription. At the time, 8 quarters ago, it was $2 billion on our balance sheet. Today, we’ve more than doubled that, up 57% this quarter to $4.4 billion and accelerating.”

Kelly Kramer – CFO and EVP

Price is within range

“when we look at the drivers of our growth margin, price in Q3 actually has been in the same range that it was pretty much last year as well as last quarter in terms of the price index that we’re seeing. So that’s in the same range. Again, it’s high, but it’s in the range. It’s not increasing. I would say in terms of the guidance for Q4, we’re assuming that. We’re also making sure the teams are being very aggressive where they need to be aggressive in areas and then against competitors where we need to be. But overall, the pricing hasn’t changed dramatically besides the normal erosion that we see in churned business lines.”