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Xyratex Ltd. (XRTX) Message Board

  • cben15606 cben15606 Apr 19, 2013 9:19 AM Flag

    IBM's "bad" results and Lustre

    IBM reported a weak quarter reported by some as being due to weak hardware sales. IBM is now XRTX' largest customer so on the surface it would be reasonable to infer this as not good for XRTX. It was however actually a very good quarter for the IBM/XRTX partnership; IBM's Tivoli and PureSystems product lines saw strong growth and both use Storwize/V7000 which is made by XRTX.

    Recall also that HP last month stated they were "sold-out" on their 3Par(XRTX)product lines which is also seeing very strong growth and which was just recently launched. Hence, it appears that XRTX is managing their costs and supply chain very well. As Bob Crandall used to say: " Nobody ever went out of business with too little capacity!". So despite the "bad news", XRTX continues to distinguish themselves by successfully ramping existing product lines while adding big new ones in a weak economy.

    Separately, here is a great quote from LUG-2013 that wrapped up yest:

    "Code contributions(Lustre) have grown from 35k lines of code (LOC) in Lustre 2.1, to 50k in Lustre 2.2, to 85k in Lustre 2.3 and we expect over 200k LOC changes in Lustre 2.4. This is not inefficient, this is not bloat. In fact, it includes both additions and subtractions. What this shows is the growth of a maturing technology, with a wider and wider feature set with uses in more and more markets.

    For example, Hierarchical Storage Management (HSM), a data storage technique that facilitates the movement of data between high-cost and low-cost storage media, is coming out soon. A major, long-awaited feature for enterprise customers, HSM will help accelerate Lustre use in the commercial high performance I/O space."

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    • I wish we could debate those things again Ben, but at this point it really doesn't matter about cloud data. There are no shares for investor's to buy, the company is on the chopping block, etc. and those who control the majority interest(float) know st results are not part of the bigger picture.

      Lustre was/is the honey pot, a company like EMC or IBM will take Lustre and make it the OS and file management and like Oracle or Microsoft they will require customer's to pay a license and upgrade fee to manage data in the cloud. Probably at 86% margins.

      To me it was the best kept secret, only problem was we didn't have an extra 54M to risk/force the issue. Not to mention, we take pride in working with management and the rewards were 3X more down the road with much less of a tax issue.

      If Baker street had a workable web site maybe we could of made them even more famous with more money, he could of started CNBC deux, you turn it on and you get the old 60's snow with poltergeist ghost communicating from the cloud(:-)

    • Considering that XRTX was a spin off by IBM in a MBO, it did not do much to help the company advance faster by providing it with bigger orders, they were busy getting supplies from everybody in the industry.

      Now, that most have reduced their dependence on XRTX and busy pulling themselves out of quicksand, IBM looks like the hero of the day by having the largest volumes with XRTX, which could be really not much but from the lack of others, they are the largest by default.

      At the end of the day, XRTX will probably have its small niche among titans and will be as always dependent on the crumbs they throw at it from time to time.

      $800 Million per year is not chicken feed, as long as it is maintained and the company would not hemorrhage any more. and as I mentioned a couple of days ago, it has to go to cloud services itself, or it will be left behind.

      If it can generate $200 million to $300 Million a year only from Cloud, then the normal evolution from the antiquities they were selling to the new stuff that takes time to be proven will be great even at 20% a year.

      Reading some people on this board, one would believe that XRTX is the only company that manufacture the stuff, but to each one sold by XRTX there are dozens sold by competitors and there is no preset niche that XRTX hold for granted.

      XRTX has to be patient as it is re-inventing itself and this takes time, either it ruin its name by rushing to sell based on old patents and new unproven ones by rushing systems with problems simply to boost the numbers, or it has to be patient and execute fully in the next cycle when it should be ready as a player.

      Sometimes wishful thinking is not enough.

    • All good news

      Sentiment: Strong Buy

    • Lenovo says in potential M&A talks; report of IBM server deal

      • 2 Replies to richardred1
      • According to article in insideHPC, this deal would probably make Lenovo the #1 HPC vendor.

        "How IBM’s Potential Sale of its x86 Business Could Impact the HPC Market"

      • I saw that. There are a lot of dots and ifs between Lenovo and XRTX but Lenovo has done something no other PC maker has done the last few years-a stellar job. Besides being an aggressive acquiror, Lenovo has also been expanding their storage and cloud portfolios. If they do take IBM's server biz, which is really credible given their growth and history with IBM, then XRTX' server rich products becomes a more compelling fit.

 
XRTX
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