August 5, 2022
Photo: David Paul Morris/Bloomberg via Getty Images
Hello, and welcome to Protocol Enterprise! Today: what a revenue milestone for Databricks says about the future of enterprise data, Alibaba reports slow but recovering growth in its cloud division, and chip sales data points toward a quiet second half of the year for consumer electronics companies.
At a time of global instability and economic concerns, here’s one thing you can take to the bank: We’re going to generate more data next year than we did this year.
That means it’s a good time to be in the data-management business, as Ali Ghodsi knows. The CEO of Databricks announced Friday that his company has surpassed $1 billion in annualized revenue, more than double the $350 million in annualized revenue it reported just two years ago.
But Databricks is not alone in this market.
Databricks spent much of 2021 fielding questions about an IPO, which have understandably faded this year given the correction in enterprise tech stocks over the first half of the year.
As companies wade further into data-intensive practices like machine learning and observability, they’ll generate more data than they know what to do with.
Chip shortage could undermine national security: The global shortage of semiconductors has impeded the production of everything from pickup trucks to PlayStations. But there are graver implications than a scarcity of consumer goods. If the U.S. does not ensure continued domestic access to leading-edge semiconductor manufacturing, experts say our national security could suffer.
China’s Alibaba Group yesterday reported its cloud revenue climbed 10% year-over-year to the U.S. equivalent of about $2.64 billion for the quarter that ended June 30. That includes revenue from Alibaba Cloud, the world’s fourth-largest cloud provider with a 5% share of the infrastructure services market, and DingTalk, Alibaba’s digital collaboration workplace and application development platform. The cloud division’s net loss from operations narrowed to $193 million, from about $243 million in the prior-year period.
The cloud division’s revenue reflected recovering growth from customers in non-internet-related industries, primarily financial services, the public sector and telecommunications, according to a regulatory filing. Cloud growth was offset by a decline in revenue from Alibaba’s top internet-related customer, an unnamed company that’s gradually stopped using its overseas cloud services for its international business due to “non-product-related requirements,” a drop in business from online education customers and softening demand from other customers in China’s internet industry, the company said. Non-internet-related industries accounted for 53% of Alibaba’s cloud revenue, an increase of five-plus percentage points compared to the same period last year.
Alibaba Cloud in June introduced a new cloud infrastructure system to power its data centers. The Cloud Infrastructure Processing Unit is expected to lead to performance improvements in networking, storage, security and computing power by offloading virtualization functions from servers to dedicated hardware, the company said.— Donna Goodison (email | twitter)
It’s not just Intel: Chip sales are slowing around the world, according to Bloomberg.Small local retailer Amazon announced plans to acquire iRobot, a notable power user of AWS’s serverless technology.
Chip shortage could undermine national security: To ensure American security, prosperity and technological leadership, industry leaders say the U.S. must encourage domestic manufacturing of chips in order to reduce our reliance on East Asia producers for crucial electronics components.
Thanks for reading — see you Monday!