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Processors, Cloud Storage, and Apple Results

Intel Corp. unveiled its latest processors based on the 22-nanometer Ivy Bridge design. Elsewhere, Google Inc. and Microsoft Corp. released and improved their cloud storage offerings while calling into questions concerns over intellectual property and privacy. Lastly, Apple Inc.’s quarterly results demonstrate that customer appetites for iOS-based devices continue as evolutionary products arrive.

Focal Points:

  • Intel released 13 new Ivy Bridge processors this week, the first of its third-generation of Core processors. The first batch of processors is targeted at high-end desktops, notebooks, and all-in-one applications, and incorporates a 20 percent improvement in processing performance and up to twice the graphics speed. Much of the speed improvement comes as a result of Intel's new 22-nanometer manufacturing process which incorporates so-called 3D transistor technology that ascends from the surface of the chip. The company says that the new process improves processor performance by 37 percent and reduces battery consumption by more than 50 percent. Processors for mainstream notebooks, desktops, and Ultrabooks will arrive in a few months. Support for the new high-speed Thunderbolt peripheral interconnect will be included in many Ivy Bridge motherboards.
  • Google announced a cloud-based storage service this week, Google Drive, inviting a host of concerns about the company's privacy policies and users' intellectual property. The company is offering 5 gigabytes (GBs) of storage for free and the ability to purchase up to 100 GB of space for $5 per month. However, the company's policies for data storage are conflicting and raise red flags as to the confidentiality and sensitivity of files stored on Drive. When asked, Google stated that user files remain their intellectual property and in their control; however, additional language continues that "Google (and those we work with) has a worldwide license to use, host, store, reproduce, modify, create derivative works." The language continues that the license applies "even if you stop using our Services."  Google Drive is available now for Apple Mac, Windows, and Android platforms. A version for Apple iOS will be available soon. Microsoft updated its SkyDrive cloud storage offering this week, dropping the amount of available free space from 25 GB to 7 GB. SkyDrive can now be accessed as an integrated drive on both Windows and Mac platforms, and new the iPad now joins iPhone and Windows Phone in supporting the service. Pricing for 100 GB per year of SkyDrive storage costs $50 per year.
  • Apple announced another banner quarter this week as revenue rose nearly 60 percent to $39.2 billion as profits skyrocketed 94 percent to $11.6 billion. The company sold 35.1 million iPhones and 11.8 million iPads, up 88 percent and 151 percent respectively. Estimates had called for approximately 30 million iPhones and 12 to 13 million iPads. Mac sales were up seven percent to 4 million, shy of the 4.1 to 4.4 million expected. Gross margins climbed to 47.4 percent up from 41.4 percent the prior year. Sales of iPod music players continued the decline started in 2008, selling 7.7 million units at a 15 percent decline from the prior year.

Experton Group believes the introduction of Intel’s new processors heralds significant advancements in graphics and processing performance, power consumption, and value. While numerous vendors have begun to roll out systems based on the Ivy Bridge platform, IT executives should expect the vast majority of enterprise-targeted solutions to appear in the late-second and third quarters. As Intel is not sunsetting Sandy Bridge processors any time soon, pricing should come at a premium of up to $150; however, Ivy Bridge will become the mainstream for pricing (matching current levels) by or before the end of the year.

IT executives should adopt Ivy Bridge-based offerings into their high-end PC purchasing before the third quarter is out and into their mainstream PC mix before the year's end. Google's somewhat ambiguous and contradictory privacy terms are cause for concern for corporations considering using the platform; however, they are not necessarily exclusive to the search giant. IT executives should recognize that users are leveraging cloud-based storage services whether such services are corporate sanctioned or not and thus should establish guidelines, best practices, and recommendations for which services should be used for particular data types. Better still, enterprises would be best served in establishing an enterprise agreement with a cloud storage provider that ensures proper service levels and intellectual property protection, or otherwise building their own cloud-based storage capabilities. Cloud storage's portability is highly attractive, can increases productivity, and is cost-effective, but privacy and security concerns must be fully vetted and incorporated into enterprise security policies. Apple's continued success is fueled by the trend for elegantly simple mobile devices. The company's marketing efforts are a primary contributor to the escalating consumerization of IT as employees demand iPhone and iPad connectivity to enterprise resources. IT executives must employ mobile device management (MDM) and mobile application management (MAM) technologies to ensure the safety and security of information shared with these devices as proliferation rates will continue climb significantly over the next few years.