Again, I am suprisied it’s valued at only $6.9Bn.
Pardon my ignorance, but how come mobile apps and websites get valued for 10+ or 20+ Bn dollars , while someone who creates real technology is valued at only $6.9Bn
Imagine a building, say a shopping center, airport, or a city main square, that gets the same amount of visitors per day as some of those apps, and it might start to make more sense. Take Clash of Clans for example, valued at $10 billion. It has around 100 million daily active players. One of the busiest airports, the Hartsfield-Jackson Atlanta International Airport, has 104 million passengers annually. NY Times square receives about fifty million visitors per year.
If something, anything, gets 100 million visitors PER DAY, the value of such a real estate, even if digital, is immense.
There are also different ways in which you can use the data to help you create another app with high daily active players. An app can have the whole world as their oyster, unlike shopping centers, etc.
To the point of this article, it's kind of surprising to me at least that licensing companies like ARM and Qualcomm have been so much more successful than Mellanox.
In contrast, Mellanox produces a niche product. It is critical to HPC and some deep pocketed finance people, but it is never going to be at the volume of e.g. ethernet.
The long term aspect is that, as Moore's law scaling becomes harder and harder, distributed computation becomes more essential. Right now we are in a dip in peak compute rate requirements, because we have invented battery powered computers and 4G, and hence cloud. But the work done in the cloud isn't very taxing, mainly single threaded. But I'm confident we'll soon be seeing a lot heavier parallel computation in the cloud soon, and stuff that won't fit into one or four GPUs. The tradeoffs between PCIe and IB after 4*16x start to favour IB, especially if the IB silicon is on the NVLink switch complex. So from the perspective of integration bringing much greater IB volume, the acquisition multiples the worth of MLNX by an order of magnitude -- if nVidia can execute.
At one point, 6 of the top 10 supercomputers in the top 500 were interconnected with Quadrics, and over 1/3 with Myrinet. However, both Quadrics and Myricom are both long gone. And neither of them sold for anything close to $6.9B
I worked for Myricom when Mellanox was starting out with IB. I recall stories from that time of customers that would try IB for something like 1/2 to 1/3 of what we charged. But they could never get it to work, and ripped it out and installed Myrinet. Sadly, this made our management smug. Mellanox eventually ate their lunch because we never responded to their marketing and pricing war.
I don't think it was just the price or marketing (although Mellanox at least had sales people -- never heard from anyone at Myricom even after buying $$ of gear). Mellanox always seemed to be pushing the envelope, which might have been more R&D dollars. Never had problems with IB not working (CX-4 and up) but I guess the gremlins depend on scale.
Can you name many apps and websites that closed (aka IPO or sold, not funding round) at 10+/20+ billion? Unless you're going to go for the stupid "uber is an android app my kid could could make for their senior project" shtick, I think most 10b+ apps are backed by _real_ technology
(Not interested in playing the no true technology game, just pointing out that snapchat is the highly valued mobile app that comes to my mind)
(https://engineering.linkedin.com/open-source as as starting point)
This is more like a race car company not being as valuable as Toyota. Yes, the technology of the race car is unbelievable, but there are only a few thousand race cars in the whole world and there's a Toyota in every household.
The market just has a big dissonance in how it estimates and discounts those future earnings. Amazon is seen as a future huge profit maker, while Apple is viewed as perpetually at risk of a large scale decline in it's recent profitability.