In late March, 2014, NVIDIA and VMware announced the addition of NVIDIA GRID™ as an available application via VMware DaaS. On April 7, 2014, NVIDIA announced a win with Adobe’s Creative Cloud™ SaaS offer. NVIDIA GPUs now power the GPU-accelerated video features of this service from Adobe. But is there an important revenue opportunity looming from these wins?
Adobe’s Q1 2014 earnings report included mention of 22% growth in the number of paid subscribers to its Creative Cloud service for the quarter. A quick check of plans indicated a healthy $49.00 per month, per user, charge for the complete Creative Suite, including Premier. The NVIDIA GPUs are powering part of the premier component of the suite. So this win looks promising for NVIDIA.
The VMware DaaS offer is distributed through a channel strategy. The channel partners appear to be largely assembled from managed services providers and ISPs. So it’s difficult to estimate the revenue potential of the VMware win. But VMware is only one of three Virtualization options for NVIDIA’s Graphics-Accelerated Virtual Desktops and Applications offer. Other options include Citrix and Microsoft. Therefore, NVIDIA has the distribution capability, in place, to satisfy consumer demand for 3D desktops, etc. as cloud services.
It’s also important to note the lack of competition in these markets. AMD’s Radeon Graphics Card Cloud offer is limited to the gaming market, which NVIDIA includes as one of the verticals addressed by NVIDIA GRID™. But Radeon neither has a DaaS offer, nor a relationship with Adobe for its Creative Cloud offer. Intel, the last presumed competitor to NVIDIA in these markets, has chosen to address the hardware market for what it refers to as Gaming Innovation.
In sum, NVIDIA looks to have secured a unique market niche with these two prominent wins. Given the publication dates of these press releases, it’s not likely the May 8, 2014 quarterly report will include any substantive results, but it will, nevertheless, be interesting to hear what they have to say about the two deals.
Disclaimer: I’m long NVIDIA
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