WebProNews

Tag: SiliconANGLE

  • DigitalOcean’s Weak Guidance a Warning to the Cloud Industry

    DigitalOcean’s Weak Guidance a Warning to the Cloud Industry

    Despite beating analysts’ expectations in its most recent quarter, DigitalOcean’s weak guidance may be a warning sign for the industry.

    The cloud computing industry has largely avoided the worst of the current economic downturn as companies continue to race to migrate legacy systems to the cloud. In fact, the cloud market’s growth is accelerating, with end-user public spending poised to reach nearly $600 billion in 2023.

    According to SiliconAngle, DigitalOcean’s guidance for next quarter has disappointed analysts:

    The company offered a forecast of between $160 million and $162 million in fourth-quarter revenue, below Wall Street’s target of $164 million. It also said it’s looking at earnings of 18 to 19 cents per share, below the consensus of 26 cents.

    The guidance is bad news for the cloud industry and may be further indication the sector is not as well insulated from economic uncertainty as some would hope.

  • Broadcom’s VMware Deal Brings Hope, Angst, and Resignations

    Broadcom’s VMware Deal Brings Hope, Angst, and Resignations

    Broadcom’s plans to purchase VMware are causing a range of reactions among outside experts and insiders, with no one knowing what to expect.

    Broadcom announced in late May that it had reached a deal to acquire virtualization company VMware for $61 billion. The deal was announced just months after VMware was spun off from Dell, becoming an independent company once again. The deal is also very much in line with Broadcom’s pattern of using acquisitions to rapidly expand its business.

    With the third-largest tech deal in history moving forward, opinions are all over the map regarding what to expect from the deal, although most agree on one point: Broadcom will aggressively push VMware to boost its margins and profitability.

    According to SiliconAngle’s Dave Vellante, Broadcom’s growth far outpaces VMware’s, 20% per year versus 3%. Similarly, Broadcom’s operating margin is 61%, far above VMware’s 25%. Even Oracle, a consistently highly profitable, only comes in at 47%.

    Vellante says Broadcom has a very simple approach, requiring business unit leaders to agree to milestones, goals, and financial targets. As long as those are met, everything runs smoothly. If the goals aren’t met, the business leader is given four or five quarters to get on target; otherwise, the business is sold off or killed.

    Broadcom’s approach doesn’t sound all bad to some. In fact, VMware User Group executive director Brad Tompkins posted a blog entitled: “Why the Broadcom announcement is good for you.”

    “I don’t think this is the end of the world,” he said in an interview with SiliconANGLE. “I think everyone has kind of gotten over it and is ready for information about what it means to them.”

    Not everyone shares Tompkins’ optimism, however. According to Business Insider, there’s a mass exodus from VMware as employees are disillusioned with the possibility of the deal going through.

    “It’s like a sinking ship and we’re being asked to row until we go under,” one engineer said, estimating that half of his work acquaintances are looking for other jobs. “Do I hang out here and the boat’s probably going to sink? Or do I jump ship because other people are?”

    “People feel betrayed,” one VMware engineer tells Insider. “For my team of 10 I know four of us are actively interviewing.” Another one said that “the only thing keeping many people here is the specter of a recession.”

    One thing is certain: VMware’s future has a lot of question marks in it.

  • Facebook Libra Backers Back Out

    Facebook Libra Backers Back Out

    A week ago we covered a Wall Street Journal article highlighting potential trouble for Facebook’s Libra cryptocurrency, as multiple backers were reconsidering their commitment to the project.

    Fast-forward a week and things have only gone from bad to worse. As Bloomberg reports, PayPal was the first to announce they were leaving on October 6, with Visa, Mastercard, eBay, Stripe and Mercado Pago following suit. Each of these companies provided a brief statement, expressing their interest in monitoring Libra’s progress. Nonetheless, without these companies’ support, Libra is left without a single payment processor in the U.S.

    The high-profile exits follow increased pressure from U.S. senators, who cautioned Mastercard, Visa and Stripe about backing the currency. Since Facebook first announced the Libra project, governments around the world have been critical of the endeavor, expressing concern about how the cryptocurrency will impact financial markets. In the days leading up to the companies pulling their support, senators cautioned them about how Libra could impact their broader payment business as well.

    Critics are mixed about whether these high-profile defections spell doom for Libra or a new opportunity. Michael Pachter, an analyst for Wedbush Securities, told Bloomberg TV that he “didn’t think Facebook can do this by itself. Short of a big bank stepping in like JPMorgan, I don’t think this could ever happen.”

    As SiliconANGLE highlights, however, several other companies emphasized their support, “including Kiva, Mercy Corps, Andreessen Horowitz, Anchorage and Xapo. Arguably, the change sees Libra look more like a startup now with the lack of mainstream company support.”

    The news comes days before the Libra Association is scheduled to meet to sign a charter agreement. It’s probably a safe bet there will be far more to talk about in the wake of these defections.