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Qualcomm Q1 strong as on-device generative AI ramps

Editor in Chief of Constellation Insights
Constellation Research

Larry Dignan is Editor in Chief of Constellation Insights at Constellation Research, where he leads editorial coverage focused on enterprise technology, digital transformation, and emerging trends shaping the future of business. He oversees research-driven news, analysis, interviews, and event coverage designed to help technology buyers and vendors navigate complex markets with clarity and context. ...

Qualcomm reported strong first quarter results as its Snapdragon platform saw traction across smartphones, automotive, PCs and Internet of things devices.

The company reported first quarter net income of $2.77 billion, or $2.46 a share, on revenue of $9.93 billion, up 5% from a year ago. Wall Street was expecting Qualcomm to report first quarter earnings of $2.37 a share on revenue of $9.52 billion.

As for the outlook, Qualcomm projected second-quarter revenue of $8.9 billion to $97 billion with earnings of $1.73 a share to $1.93 a share. Non-GAAP earnings will be $2.20 a share to $2.40 a share.

For the second quarter, analysts were expecting Qualcomm to report earnings of $2.25 a share on revenue of $9.28 billion.

Qualcomm is betting that on-device generative AI processing and features will drive demand. Qualcomm is embedded in AI-heavy smartphones from Samsung and others and is looking toward more generative AI workloads moving to edge devices.

Samsung's Galaxy S24 launch becomes showcase for Google Cloud AI

By device, Qualcomm said handset revenue in the first quarter was $6.69 billion, up 16% from a year ago. Automotive revenue was $598 million, up 31%. IoT sales were $1.14 billion, down 32% from a year ago.

Cristiano Amon, CEO of Qualcomm, said on the earnings conference call that generative AI processing on the edge will move well beyond smartphones into enterprise use cases. Amon said:

"We continue to believe that industrial edge devices with connectivity, high-performance computing and on device AI will become one of our largest addressable opportunities fueled by the secular trends of digital transformation. As such, we're accelerating our investments in solutions, ecosystem and broad channel enablement to position ourselves for growth while we navigate the industry-wide inventory draw down."

Tech Optimization Chief Information Officer

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The Decentralized Office: Unleashing the Hybrid Work Revolution with 5G

Dion Hinchcliffe

Vice President and Principal Analyst
Constellation Research

Title: About Dion Hinchcliffe Dion Hinchcliffe is an internationally recognized business strategist, bestselling author, enterprise architect, industry analyst, and noted keynote speaker. He is widely regarded as one of the most influential figures in digital strategy, the future of work, and enterprise IT. He works with the leadership teams of large enterprises as well as software vendors to raise the bar for the art-of-the-possible in their digital capabilities. He is currently Vice President and Principal Analyst at Constellation Research. Dion is also currently an executive fellow at the Tuck School of Business Center for Digital Strategies. He is a globally recognized industry expert on the topics of digital transformation, digital workplace, enterprise collaboration, API…...

The rise of hybrid work has thrown open a pandora's box of possibilities, but also unleashed a tangle of challenges for IT departments struggling to keep remote, in-office, and flexible employees seamlessly connected. In the scenario unfolding today, next-generation 5G wireless Internet access has emerged as a genuine enabler, promising to redefine hybrid work flexibility, efficiency, and security.

The traditional office network, tethered to physical desks and legacy wireless connections, now feels archaic in the face of today's dynamic workforce. Imagine attending a crucial client meeting from a comfortable local co-working space, collaborating on real-time documents from home, or seamlessly transitioning between remote office and central office without missing a beat. 5G's fast bandwidth, ultra-low latency, and vast capacity make such scenarios not just feasible, but highly performant and smooth.

But the benefits of 5G go beyond mere connectivity. In my latest research report on delivering on hybrid work, I explore how next-gen 5G internet gateways -- an example being the widely-used Verizon 5G Business Internet Gateway -- can equip IT departments to tackle the unique challenges of hybrid work.

The crux is success in such hybrid work scenarios is making sure the worker has the capabilities and that it's well supported by the IT department. In my research, supporting the IT department in delivering a high quality hybrid work experience with 5G is a critical succes factor. Imagine a portal that provides real-time visibility into network performance across all hybrid work locations. No more scrambling to diagnose connectivity issues across a scattered patchwork of Wi-Fi hotspots and poorly provisioned regional offices. The such a support portal simplifies network management, security operations, and governance, allowing IT to proactively identify and resolve problems before they disrupt a remote employee's workflow.

But it doesn't stop there. Security concerns abound in the hybrid landscape, with company data potentially accessible from countless public networks. In my exploration of using 5G to unleash hybrid work, I found that solutions like Verizon's VBI Portal can empoower IT to enforce granular security policies across all devices and locations, ensuring every connection adheres to the highest standards, regardless of where the employee is working.

The Data Says: It's a Hybrid Work Future

Industry data speaks volumes. A recent study by Upwork revealed that 64 million Americans performed freelance work in the past year, an all-time high, highlighting the growing number of independent professionals who contribute to hybrid teams. Add to that the vast majority of workers, namely 79% of employees who report they crave more flexible work arrangements in a large Cisco survey. It's clear that hybrid work is not just a trend, it's the future. A new Gallup study found that the top five benefits of hybrid work to both employers and workers is productivity:

And 5G, fully unleashed with enabling management support tools for the IT dpeartment, such as Verizon's VBI Portal, holds the key to unlocking its full potential. Imagine a world where employees can sustainablly work seamlessly from anywhere, unburdened by connectivity troubles, secure in the knowledge that their data is fully protected. It's a world where productivity soars, collaboration transcends boundaries, and workers can focus innovation, which is specifically unleashed by the agility and flexibility of 5G networks.

Robust 5G Infrastructure A Vital Enabler of Hybrid Work

Yes, infrastructure challenges remain. But with continued investments in 5G networks and IT-friendly management tools, hybrid work scenarios once deemed futuristic are now within reach. End-user computing teams and digital employee experience leads are now in a position to embrace the flexibility and efficiency that 5G enables, and empower IT departments with the tools they need to support it all. My finding: The future of work is wireless everywhere, and it's more readily achievable than ever before with today's enabling capabilities.

Benefits of 5G management capabilities for IT departments, like the VBI Portal:

Real-time network visibility and performance insights across all hybrid work locations.
Centralized management and troubleshooting of devices and connections.
Granular security policy enforcement to protect company data.
Simplified deployment and support of hybrid work technologies.

As I conclude in the report, "5G unlocks a future where collaboration and productivity defy physical boundaries." And it's not just about speed – the report sheds light on another vital revelation: 5G gateways can unleash virtual networking and resource sharing in real-time, effectively merging disparate physical spaces into a single, dynamic work environment, but only if the right infrastructure is provided.

This research, soon to be publicly available, is a clarion call for IT departments to step up and become champions of hybrid work. By embracing 5G and its empowering tools, they can shed the shackles of traditional network management and orchestrate a symphony of productivity across continents. It's time to rewrite the rules of work, ditch the limitations of the physical office, and unleash the boundless potential of a truly connected, global workforce. The future is wireless, and the future is here today. I urge IT departments to be at the forefront, guiding the way to this high-potential future of work.

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Future of Work Tech Optimization Next-Generation Customer Experience Data to Decisions Innovation & Product-led Growth New C-Suite Marketing Transformation Digital Safety, Privacy & Cybersecurity AI Analytics Automation CX EX Employee Experience HCM Machine Learning ML SaaS PaaS Cloud Digital Transformation Enterprise Software Enterprise IT Leadership HR Chief Information Officer Chief Information Security Officer Chief Technology Officer Chief People Officer Chief Human Resources Officer

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Workday's Eschenbach becomes sole CEO, Bhusri executive chair

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Workday said Carl Eschenbach will become CEO of the company Feb. 1. Eschenbach had been co-CEO with Aneel Bhusri since 2022.

Bhusri will become executive chair of Workday's Board of Directors and be a strategic advisor with a focus on innovation and Workday's technology platform.

In a statement, Eschenbach said "working alongside Aneel for the last year has been a highlight of my career, and has solidified my belief in the opportunities ahead for Workday."

Eschenbach is taking over Workday as sole CEO in a strong spot. The company has been integrating AI and generative AI into its platform without going the add-on charge route. Workday has more than 65 million users under contract and more than 10,000 global customers.

Workday layers generative AI features throughout HCM, Adaptive Planning

Future of Work workday Chief People Officer Chief Information Officer

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Data leaders bullish on generative AI, but multiple challenges remain, says Informatica

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Enterprises are racing to incorporate generative AI into business processes and 45% of chief digital officers say they already have, according to an Informatica survey. However, quality of data was the biggest obstacle for 42% of respondents.

The Informatica survey, based on 600 data leaders from companies with more than $500 million in revenue, revealed that 78% of data leaders expect their enterprises to increase budgets for data management. Informatica noted that 33% of respondents expect significant investments in data management.

These finding align with Constellation Research's take that enterprises will have to invest in data management, architecture and quality to drive generative AI return on investment. There's also the reality that companies may not have enough data to make generative AI work. What remains to be seen is what data drives the most returns with generative AI.

Indeed, Informatica's survey said 41% of respondents already struggle with more than 1,000 sources of data.

From the report:

"As a result, AI, its challenges and data quality are all rising on data leaders' list of priorities for the year ahead.

Top data strategy priorities for 2024 include delivering reliable and consistent data fit for generative AI (39%), improving data-driven culture and data literacy (39%), and improving governance over data and data processes (38%). These priorities all highlight the need to push beyond implementing and toward maximizing AI’s efficacy and making the most of their investments—a point made even more clear by the 43% using AI readiness as a top metric for measuring their data strategy effectiveness."

Constellation ShortList™ Artificial Intelligence and Machine Learning Cloud Platforms | Get ready for a parade of domain specific LLMs | Trust In The Age of AI | How much generative AI model choice is too much?

The report had a series of notable findings. Here's a look:

51% are evaluating or planning to evaluate open-source LLMs and 48% are planning to implement retrieval-augmented generation (RAG) with LLMs.
44% of data leaders are considering fine-tuning public LLMs and 43% are planning on customizing them.
99% of respondents adopting or planning to adopt generative AI have encountered challenges.
73% of those implementing or planning to implement generative AI plan to use the technology to deliver faster insights to data.
66% are looking to generative AI to drive productivity with automation and augmentation.
48% of data leaders said AI and machine learning were key areas for reskilling and upskilling. 44% said data analytics and visualization was an opportunity for reskilling.

Data to Decisions Innovation & Product-led Growth Future of Work Tech Optimization Next-Generation Customer Experience Digital Safety, Privacy & Cybersecurity informatica Big Data AI GenerativeAI ML Machine Learning LLMs Agentic AI Analytics Automation Disruptive Technology Chief Information Officer Chief Data Officer Chief Technology Officer Chief Information Security Officer Chief Executive Officer Chief AI Officer Chief Analytics Officer Chief Product Officer

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Dell Technologies to exit commercial agreement with VMware

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Dell Technologies is exiting its commercial agreement with VMware now that it has been acquired by Broadcom.

The company said in a regulatory filing that it will terminate its commercial agreement with VMware due to a change in control. With the move Dell Technologies won't be a distributor of VMware products--unless there's a new agreement.

In the filing, Dell said the terminated agreement "provides a framework for various commercial activities between the two parties, including how the Company will act as a distributor of VMware products and services as well as how the parties collaborate on certain solutions and go-to-market activities."

Dell Technologies via its EMC acquisition became a key distributor of VMware via converged infrastructure including VxRail, VMware Cloud Foundation on VxRail and vSAN Ready Nodes. In a filed commercial agreement dated Nov. 1, 2021, Dell and VMware said the commercial relationship was designed to "maintain the mutual strategic advantage" between the companies. The news comes at a tricky time for VMware, which is changing its pricing since being acquired by Broadcom.

In a recent CXO meeting of BT150 members, VMware was a hot topic. Here are some of the takeaways from that meeting.

CIOs were actively looking at alternatives with many looking to move off VMware. Nutanix appears to be the biggest beneficiary.
CIOs weren't surprised by Broadcom's move and one exec noted that peers are seeing price hikes of 100%. Broadcom made similar moves when it acquired CA and Symantec, CXOs said.
Without a major change in strategy, it's hard to rip and replace VMware, but many companies are looking at jumping. One catch is that VMware still owns a lot of EMC's old big data portfolio and it's difficult to migrate.
Enterprises took the time to plan a move off VMWare while the Broadcom purchase was delayed by regulatory issues. It will take a few years to move off VMware completely.
Nutanix was gaining share and some CXOs were looking at open-source options for their Linux stacks.
CXOs are expecting VMware's innovation, support and service to all decline--especially for enterprises that fall out of the top 100 or 200 clients.

Tech Optimization dell vmware Chief Information Officer

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AMD Q4 solid, outlook for Q1 disappoints

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

AMD's fourth quarter results were solid, but the outlook for the first quarter missed expectations.

The chipmaker projected first quarter revenue of about $5.4 billion, give or take $300 million. Wall Street was expecting $5.7 billion. AMD's guidance comes a week after Intel's disappointing outlook. AMD also said that its first quarter data center revenue will be flat with the fourth quarter due to a seasonal decline in server sales offset by ramping GPU sales.

For the fourth quarter, AMD reported net income of $667 million, or 41 cents a share. Non-GAAP earnings were 77 cents a share. Revenue for the fourth quarter was $6.2 billion.

Wall Street was expecting AMD to report earnings of 77 cents a share on revenue of $6.14 billion.

For 2023, AMD reported net income of $854 million, or 53 cents a share, on revenue of $22.7 billion. AMD is ramping up its AI-optimized processes as it chases Nvidia.

AMD CEO Lisa Su said, "demand for our high-performance data center product portfolio continues to accelerate, positioning us well to deliver strong annual growth."

Data center revenue in the fourth quarter was $2.3 billion, up 38% from a year ago. Sales were driven by EPYC CPUs and AMD Instinct GPUs.

AMD's PC group delivered revenue of $1.5 billion, up 62% from a year ago. Those gains weren't enough to reverse a rough 2023 as annual revenue fell 25%. Gaming revenue was $1.4 billion, down 17% from a year ago. Embedded revenue in the fourth quarter was down 24% from a year ago.

Speaking on a conference call, Su said:

"Based on a strong customer pool and expanded engagements, we now expect datacenter GPU revenue to grow sequentially in the first quarter and exceed $3.5 billion in 2024."

Other comments of note:

AMD sees AI PCs driving an upgrade cycle. "Looking at 2024 we are planning for the PC total addressable market to grow modestly year on year weighted towards the second half as AI PCs ramp," said Su.
"We believe AI is a once in a generation transition that will reshape virtually every portion of the computing market starting in the data center and then expanding into PCs and across multiple embedded markets," she said.

One point worth noting is what Su said about AI workloads beyond the hyperscalers. When asked about the MI300 demand, she said:

"On the MI300 trajectory. I think you would expect that revenue should increase every quarter from now through sort of the end of the year, but it will be a bit more second half weighted and part of that is just customers as they're finishing up their qualifications as our supply chain is ramping. We are engaged with all of sort of the large customers. These are all folks that know us really well, given our deep relationships in EPYC. I think people just have different adoption cycles as they consider what they're trying to do in their roadmap. This is very, very early innings for us in this space. This is not just about MI300 conversation, but our long-term multi-generational roadmap. There's a lot of demand coming from folks that are more AI centric and not necessarily typical cloud customers, but more enterprise or let's call it AI-specific companies that we're also very well engaged with."

Tech Optimization Data to Decisions AMD Big Data Chief Information Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer

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Microsoft Azure revenue growth accelerates in Q2

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Microsoft said Azure delivered revenue growth of 30% in its fiscal second quarter and CEO Satya Nadella noted that moved from "talking about AI to applying AI at scale."

The company reported second-quarter net income of $21.9 billion, or $2.93 a share, on revenue of $62 billion, up 18% from a year ago. Wall Street was looking for fiscal second quarter revenue of $61.12 billion with non-GAAP earnings of $2.78 a share.

CFO Amy Hood noted that Microsoft Cloud revenue was $33.7 billion, up 24% from a year ago due to "strong execution by our sales teams and partners."

Microsoft said revenue in its productivity and business processes unit was $19.2 billion, up 13% from a year ago, with Office commercial and cloud services revenue gaining 15%. Dynamics had revenue growth of 21%.

For the Intelligent Cloud unit, powered by Azure, second quarter revenue was up 20% from a year ago. The personal computing division saw Windows revenue gain 9% from a year ago.

Azure revenue in the second quarter accelerated sequentially.

Speaking on Microsoft's earnings conference call, Nadella said:

"We now have 53,000 Azure AI customers over a third are new to Azure over the past 12 months."
"We are seeing larger and more strategic Azure deals with an increase in the number of billion dollar plus Azure commitment."
"We now have over 1.3 million paid GitHub Copilot subscribers, up 30% quarter over quarter, and more than 50,000 organizations."

As for the outlook, Hood said Azure fiscal third quarter revenue growth will be stable to stronger than the second quarter.

Also see: How Generative AI Has Supercharged the Future of Work | Generative AI articles | Why you need a Chief AI Officer | Software development becomes generative AI's flagship use case | Enterprises seeing savings, productivity gains from generative AI | Work in a generative AI world will need critical, creative thinking

Data to Decisions Innovation & Product-led Growth Future of Work Tech Optimization Next-Generation Customer Experience Digital Safety, Privacy & Cybersecurity Microsoft AI GenerativeAI ML Machine Learning LLMs Agentic AI Analytics Automation Disruptive Technology Chief Information Officer Chief Executive Officer Chief Technology Officer Chief AI Officer Chief Data Officer Chief Analytics Officer Chief Information Security Officer Chief Product Officer

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Google Cloud stronger than expected in Q4, $36 billion annual revenue run rate

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

Google Cloud delivered fourth quarter operating income of $864 million on revenue of $9.2 billion, up from $7.3 billion a year ago. Wall Street was expecting Google Cloud revenue of $8.94 billion.

Alphabet, the parent company of Google, reported fourth quarter net income of $20.69 billion, or $1.64 a share, on revenue of $86.3 billion, up 13% from a year ago. Wall Street was looking for fourth quarter earnings of $1.59 a share on revenue of $85.33 billion.

Google ended the quarter with more than 182,000 employees, down from 190,000 a year ago. The company saw fourth quarter growth across search, YouTube ads, subscriptions and devices and Google Cloud.

For 2023, Google reported net income of $73.79 billion, or $5.80 a share, on revenue of $307.4 billion.

CEO Sundar Pichai said the company was pleased with strength in search, YouTube and Google Cloud. CFO Ruth Porat noted that Alphabet is on an efficiency mission to "durably re-engineer our cost base as we invest to support our growth opportunities."

Alphabet said it spent $45.43 billion on research and development in 2023.

On a conference call with analysts, Pichai said Google Cloud is seeing strong usage of Vertex AI. "Vertex AI has seen strong adoption with the API requests increasing nearly 6x from the first half to second half last year," said Pichai. Pichai also said Duet AI was boosting productivity.

Porat said Google Cloud is seeing strong demand for its industry focused AI offerings.

Google Cloud is also building out its indirect channel. "We have nearly tripled the number of co-sell deals from 2022 to 2023. In our ecosystem, there are nearly 90,000, Google Cloud and AI enabled consultants and Accenture has teamed up with Google Cloud to create a joint generative AI Center of Excellence," said Pichai.

A few takeaways from the conference call:

Pichai said teams across Google are working on the next version of its Gemini model for use across the company. "By applying generative AI to search we are able to serve a wide range of information needs and answer new types of questions, including those that benefit from multiple perspectives. People are finding it particularly useful for more complex questions, like comparisons or longer queries. It's also helpful in areas where people are looking for deeper understanding, such as education or even gift ideas," said Pichai.
Subscription revenue for Google reached $15 billion, primarily due to YouTube Premium and Music. Google One is also boosting subscription revenue.
Advertisers are using and testing generative AI across the platform.
Google saw strong sales in retail in the fourth quarter.
Porat said Google will continue to become more efficient. "We will continue to invest in top technical and engineering talent," she said. "We also continue to execute to slow expense growth, improve efficiency in our technical infrastructure, streamline operations through the use of AI, increase efficiency of our spend with suppliers and vendors through our central procurement organization and optimize our real estate portfolio."

Data to Decisions Tech Optimization Digital Safety, Privacy & Cybersecurity Innovation & Product-led Growth Future of Work Google Google Cloud SaaS PaaS IaaS Cloud Digital Transformation Disruptive Technology Enterprise IT Enterprise Acceleration Enterprise Software Next Gen Apps IoT Blockchain CRM ERP CCaaS UCaaS Collaboration Enterprise Service Chief Information Officer Chief Technology Officer Chief Information Security Officer Chief Data Officer

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See Ya, Cookies! Perspective on Google's Long Farewell

Liz Miller

Vice President & Principal Analyst
Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...

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Apple Vision Pro could rev hybrid work, video collaboration

Larry Dignan

Editor in Chief of Constellation Insights
Constellation Research

With the Apple Vision Pro officially available Feb. 2 much of the focus is on that apps (Netflix, YouTube, Spotify) that won't be on the $3,499 spatial computing device, but for hybrid work three key collaboration applications are worth watching.

Zoom, Microsoft Teams and Cisco Webex are likely to highlight collaboration experiments in spatial computing and potentially lay the groundwork for the future of hybrid work. Box also has created an app for Apple Vision Pro.

Given the price of Apple Vision Pro it's likely to have more appeal in the enterprise in labs for new consumer experiences as well as collaboration use cases.

In a blog post, Zoom outlined its Apple Vision Pro app, which aims to give customers an immersive environment that'll blend virtual and physical space. The app will feature personas, a spatial Zoom experience that will aim for users to feel like they are in the same room as coworkers and upcoming features such as 3D object sharing, Team Chat and the ability to pin up to five Zoom Meeting participants.

Cisco Webex is likely to showcase its Apple Vision Pro app any day now and Microsoft Teams is going to do the same.

For an idea of where Teams may be headed it's worth checking out Constellation Research analyst Dion Hinchcliffe's take on Microsoft Mesh, an experiment in 3D immersive worlds. The experiment is worth watching and Mesh may just indicate what Teams on Apple Vision Pro becomes.

Hinchcliffe wrote:

"Mesh helps workers tap into the power of the unspoken by listening using the spatial dynamics of the physical world. By incorporating spatial audio, Team can now mimic the way sound travels in the real world. This subtle feature could enhance the feeling of being "in the room" with colleagues, allowing you to naturally turn your attention to who's speaking based on the sound's direction. Imagine the natural flow of a conversation where you instinctively turn your avatar towards the colleague raising a question, or the quiet murmur of agreement that ripples through the virtual room as your boss delivers a key point."

In a recent report on trends on visual collaboration, Hinchcliffe noted:

"The convergence of AR, VR, and the metaverse with visual collaboration platforms heralds a new era of digital interaction, blurring the lines between the physical and virtual realms. AR, with its ability to overlay digital information onto the real world, can transform visual collaboration by enabling users to interact with real-world objects and digital data simultaneously."

Are we there yet? Not even close.

There are a bevy of caveats with the Mesh experiment as well as the collaboration apps on Apple Vision Pro. One thing is clear: Enterprise vendors are pondering the next iteration of hybrid work and collaboration. We're not there yet, but the experiments blending physical and virtual environments are worth monitoring.

Future of Work Innovation & Product-led Growth Next-Generation Customer Experience Marketing Transformation Data to Decisions New C-Suite Digital Safety, Privacy & Cybersecurity Tech Optimization apple Metaverse Chief Information Officer Chief Experience Officer

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Qualcomm Q1 strong as on-device generative AI ramps

Qualcomm Q1 strong as on-device generative AI ramps

The Decentralized Office: Unleashing the Hybrid Work Revolution with 5G