Big Data markets: Big opportunities for small tech companies

[Guide] When analysts generally believe that the "big data" market will usher in a period of smooth development, small technology companies, including Mellanox and Fusion-io, may once again set off a new wave of growth in the big data market.

Big Data markets: Big opportunities for small tech companies

Tencent Science and Technology (Marjorie) Beijing time August 12 News, according to the latest issue of the U.S. financial Journal Barron magazine published a columnist for Turnans Rey (Tiernan Ray), said that analysts generally believe that "big data" market will usher in a period of smooth development, Small tech companies, including Mellanox and Fusion-io, may yet again start a new wave of growth in the big data markets. Nvidia is one of the most surprising large technology companies in the global PC industry in the context of "big data".

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As a technical columnist for Barron's, one of my responsibilities is to focus on the key words in the development of the technology industry. These keywords have become an important basis for US Wall Street to judge stock market movements, and have sometimes played a role in boosting investor interest in a particular stock even more than corporate revenues and net profits.

"Big Data" into the mainstream

Nowadays, the key word is not "big data". All aspects of the company's operations generate large amounts of data, which are stored in the database, and are very happy to better manage and analyze the data.

given the inflated market capitalisation of some companies in the stock market, the "Big Data" and the stock-market boom triggered by it may be going to be dormant for some time. These include listed companies such as software giant SAP and Oracle, TIBCO, Teradata and Informatica, a small enterprise dedicated to software development, Qlik Technologies software start-ups such as EMC, NETAPP, Hardware manufacturers such as CommVault, Fusion-io, Mellanox Technologies and Infoblox, and even private equity institutions such as Coraid, Nimble Storage, Memsql and DataStax.

The average price/earnings ratio of the listed companies I mentioned is 45 times-fold, reflecting that some of the better performing companies are earning a very high return on the current period of zero growth in the computing industry.

small enterprises to usher in great opportunities

For example, the share price of Mellanox, a well-known enterprise that provides high-performance computing, storage and cloud computing solutions for data centers, has quadrupled over the years. By the end of Friday, Mellanox's share price had been priced at $112.09 a share in conventional trading in the Nasdaq stock market. Mellanox is also one of the few technology companies that really shows a strong boost to revenue growth in the "big Data" boom. In the boom, Mellanox's revenue forecast for this year has risen nearly 70% per cent, with a P/E ratio (the share price and the forecast for each share of earnings this year) currently 30 times times higher.

If Mellanox's revenue could achieve similar growth again, that would be great; if not, it could mellanox stocks into a period of steady growth.

While the long-term development potential is not bullish, there has been a rapid growth in the performance of some technology companies during this period. For example, EMC, which has always been very good, has seen its revenue rise by 25% per cent during this year's "Big Data" boom, despite a slight drop in revenue forecasts. EMC also has another very good technology enterprise VMware.

the biggest increase in revenue from the new growth market is the small, young technology companies. These new growth markets do not seem to be enough to attract the interest of big tech companies.

Flash technology provider Fusion-io launched an IPO in June 2011 with a stock price of $22.50. In Friday, the company released Better-than-expected fourth-quarter earnings and optimistic forecasts for fiscal year 2013. Buoyed by the upbeat news, Fusion-io's share price rose nearly 28% per cent in the NYSE's regular trading as of Friday, closing at $26.86 a share. Fusion-io's share price has been at the bottom of the line for the current year, with a 11% per cent increase in the year's share price. Fusion-io's current P/E ratio is about 74 times times, which looks pretty good.

nvidia is amazing

Nvidia is one of the most surprising big technology companies in the global PC industry, in the context of "big data". For years, Nvidia has been working on the so-called graphics processor (GPU) used by desktops and notebooks.

Although Microsoft is expected to launch its new Windows operating system by October 26 this year, the global PC market has been slow to develop. Some analysts expect zero growth in the global PC market this year. In stark contrast, this year's smart phones and tablet computers in the two major markets still maintain a rapid development momentum, which smartphones in the year shipments are expected to surpass the PC.

At the same time, Nvidia is constantly improving itself. Nvidia's Tegra chip uses all of the technology the company developed during its sales of the desktop GPU, which has also been used in the development of smartphones and tablet chips.

in the traditional desktop GPU market competition, nvidia from rival AMD's hands to capture a lot of shares. For example, Apple's new notebook, launched in June this year, uses the chip products offered by NVIDIA.

By the end of Friday, Nvidia's shares had been priced at $14.62 a share in conventional trading in the Nasdaq stock market, but only 11 times times in the year, as well as a net cash amount of $5 per share of the company's balance sheet. The biggest problem for Nvidia is that its share price growth depends entirely on the sales of Tegra chips, but the sales momentum of the chip has been a cop-out.

in February this year, NVIDIA lowered its annual revenue forecast for 2012 to between $4.7 billion trillion and $5 billion trillion, while analysts are now offering a lower estimate of 4.34 billion dollars.

In Thursday, Nvidia's second-quarter revenue figures were unchanged from analysts ' forecasts. This seems to give the company the incentive to complete its initial full-year revenue target. Also, Nvidia expects the company's revenues to be significantly higher than expected in the quarter.

wins Google Microsoft favor

To some extent, this reflects the Tegra chip sales have achieved a decent performance. In the second quarter, revenue from Nvidia's consumer computing division grew 36% per cent year-on-year, while the Tegra chip business became one of the biggest contributors. Google's latest release of the Nexus 7 tablet uses a Tegra chip, a surface tablet that Microsoft is about to launch this fall. The more important reason Tegra wins Google and Microsoft's favor is that the chip does not support Apple's ipad.

's unique advantage in assessing the competitive advantage of other tablets in the marketplace is that Nvidia has a long experience in developing chips for PCs, and Nvidia knows more about market demand than other chip makers, The company knows how to develop chip products for devices that have complex functions such as traditional PCs.

It is for this reason that Nvidia used to easily beat other rivals, including Qualcomm (Qualcomm) and Broadcom, in the competition for low-end smartphones and tablet chip markets.

Qualcomm and Bo Tong main production of large quantities of smart phone accessories and consumer electronics products accessories, and two companies have more than the Nvidia financial strength. That means they can easily beat small rivals in terms of investment and sell more chips by reducing the price of their chips to meet the demand of the consumer market.

To win in the fierce market competition, Nvidia must expect tablets and smartphones to quickly become the main platform for consumer work, and for consumers, the functionality and complexity of these products must be at least as important as product prices.

at present, the development of Nvidia is very smooth. Google Nexus 7 is likely to emerge in the tablet market, not just another Apple ipad follower.

I think it is not yet certain whether tablets and smartphones will provide momentum for Nvidia for a long time. But at least for now Nvidia is in a much better competitive environment than it was a few months ago.

(Responsible editor: Lu Guang)