Intel Corporation (INTC) designs and manufactures some of the world's best microprocessors. The company is one of the biggest suppliers of the high-performance server-processors that are required for big-data analytics.
So far, the company has a limited presence in the big-data analytics (software) market. Recently, the company announced a new range of the big-data analytics products to further augment and enhance its existing offerings for the big-data analytics market.
Offerings/products:
All the new products announced belong to the big-data market. The products are meant to further improve the performance and security of big-data.
The products include:
"Intel® Graph Builder for Apache Hadoop* software v2.0, Intel® Distribution for Apache Hadoop software 3.0, Intel® Analytics Toolkit for Apache Hadoop software and the Intel® Expressway Tokenization Broker."
- Analytics products:
Intel Graph Builder: (new)
Intel Graph Builder helps to organize, analyze and compare the big-data by presenting it in a user-friendly format.
Intel Analytics Toolkit: (new)
Intel Analytics Toolkit provides basic algorithms that can be used as the foundation codes, which can be further developed to perform domain-specific analysis. The toolkit is particularly useful for the industries like financial services, healthcare and retail.
- Data protection:
Intel Distribution: (upgraded)
Intel Distribution is an open source software platform for big-data analytics. Intel Distribution has a number of security and manageability features that allow faster encryption as well as decryption of data.
Intel Expressway Tokenization Broker: (new)
Intel Expressway Tokenization Broker helps to analyze the data that holds sensitive information and have compliance requirements such as retail for PCI-DSS, healthcare for HIPAA, financial for Sarbanes-Oxley and EU data privacy regulations.
"The new Intel® Expressway Tokenization Broker High Capacity Edition offers enterprises a simple drop-in gateway appliance that can support 1 billion tokens with high performance and cross-data center resiliency. The appliance reduces compliance risk by anonymizing and encrypting regulated data in-flight."
In simple words, the product converts sensitive information such as personal identification information into anonymous and encrypted data. The product is helpful for industries that want to run analytics on sensitive information and have compliance requirements.
The products will further add to the existing portfolio of the company's big-data management/analytics/security software products.
Target customers:
With these products, the company is targeting enterprises that perform big-data analytics, particularly in the industries like financial services, healthcare and retail.
As mentioned by the company:
"Some of the leading data-driven companies have invested heavily to create and implement their own big data analytics solutions," said Boyd Davis, vice president and general manager of Intel's Datacenter Software Division. "Intel is bringing this capability to market by providing software that is more secure and easier to use so that companies of all sizes can more easily uncover actionable insight in their data."
Conclusion:
Intel is seemingly focusing more and more on the big-data analytics market. The company is focusing on both sides of the business, hardware as well as software.
- Big Data market:
According to IBM: "Every two days, as much data is now generated as in all of human history up to 2003". "Each day we create 2.5 quintillion bytes of data generated by a variety of sources -- from climate information, to posts on social media sites, and from purchase transaction records to healthcare medical images." (Source: IBM annual report)
This data holds a lot of unique knowledge that can help industries to improve efficiency, productivity, safety, environment protection, R&D, etc. Due to this unique knowledge that can be derived from this data more and more companies are looking to collect and analyze the data. This rising trend among the companies is the prime reason behind the proliferation of big-data analytics industry.
Market size and growth:
Research firm IDC predicted that the big-data market will grow at a compounded annual growth rate ("CAGR") of 27% to hit the $32.4 billion mark in 2017. The said estimates include the software, hardware, and services components of the market.
Hadoop market size and growth:
According to another report by IDC, the worldwide Hadoop-MapReduce ecosystem software market will grow at a CAGR of 60.2% from $77 million in 2011 to touch $812.8 million mark in 2016.
- Integrated approach:
The company's strategy for the software products is to offer products that perform well with its hardware products. Its software products are "built from the silicon up for better performance", which normally means that the products have been created by taking a particular hardware technology as a base, and these products normally perform much better with the base technology as compared to other technologies. This helps the company in the cross-selling of its products across the entire big-data market ecosystem.
This type of approach for a product development can't be considered as a good approach in normal circumstances, but considering the fact that the company is a leading data-center and high-performance hardware product manufacturer this approach allows it to serve the industry with a compete architecture that delivers much better performance than a standalone product. Moreover, the market size of Hadoop software products is much smaller than the overall market size. So, selling a complete big-data architecture with bundled proprietary software is a better approach.
- Focus on Apache Hadoop:
Apache Hadoop is an open-source programming framework, which is based on Java. It is designed to support the processing of large data sets in a distributed and complex computing environment. In simple words, Hadoop allows the processing and analysis large amounts of structured and unstructured data from a single server or thousands of machines. Hadoop is used by some of the biggest names in the industry such as Facebook (FB), Google (GOOG), Yahoo (YHOO), etc. for their data processing needs for applications such as searching, advertising, storing of log files, etc. It is also very popular among the developers.
From the first launch during the beginning of 2013 to the recent upgrade and expansion of Hadoop portfolio, the company is making sure that it remains a preferred choice for the leading companies for their big-data requirements by offering the software products that are based on the knowledge, which the company is gathering since 2009 (see the chart below).
(click to enlarge) (Source: The company's document)
- Proactive player in the existing segments:
Over the last few years, the company has been in the news due to its late entry in the mobile segment. The recent development shows that the company may be a slow mover in the new segments, but it's a very active adopter of the new technologies in its existing segments and related businesses. This is one of the prime reasons that why over the years, the company has been a leading player in PC client and Data-center markets.
- Consolidating its position:
The company's recent moves such as acquisition of wireless assets of Mindspeed Technologies (MSPD), and the introduction of industry specific big-data analytics products shows that the company is consolidating its position, by enhancing its product offerings, in the businesses where the margins are high, and the company is one of the most dominant players. This also shows that the company is increasingly looking for the growth in the businesses from where the growth is more likely to come in a quick time such as Data-center related businesses.
It seems that the company without making much hype is moving ahead in the multibillion dollar big-data analytics market with the introduction of the new and niche products that are focused on the specific industries like financial, health, retail, etc.
All in all, the company is moving ahead with a strategy that will not only consolidate its position in the existing segments but will also allow it to enter new businesses that hold enormous possibilities. With this strategy, the company is also (to some extent) making it sure that in the future it can deliver growth even without significant contributions from the tablet and smartphone markets. So, it's a good development for the company and investors. For competitors, the company is becoming a more and more tough competitor due to its increasingly integrated and differentiated offerings.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. (More...)
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