Supplier Report: 7/21/2017

Cloud technology is the main theme of the week. Microsoft solidified themselves as the #2 cloud company with very strong earnings. Amazon is zoning in on health cloud and lured away a Box executive to make things happen. They also removed certain ownership language in their standard contracts that rubbed many clients the wrong way. Google is attempting to push quantum computing to cloud as industry insiders ponder if their strategy is working.

IBM’s 21st consecutive quarterly loss had news organizations and investors calling for IBM to make a change… any change at this point.

Acquisitions

  • Sprint’s Chairman Has Engaged Warren Buffett About Investment

    Sprint Corp. Chairman Masayoshi Son has engaged Warren Buffett and cable mogul John Malone in discussions about participating in a deal with the wireless company, people familiar with the situation say.

    The contours of the deal the parties are discussing are unclear. The talks are at an early stage and may not result in an agreement, the people said, but one possibility would see Berkshire put more than $10 billion into a transaction.

    https://www.wsj.com/articles/sprint-executives-have-engaged-warren-buffett-about-investment-1500055560

  • Uber Rival Grab in Talks for Up to $2 Billion from SoftBank, China’s Didi

    Singapore-based GrabTaxi Holdings Pte is raising as much as $2 billion from Japan’s SoftBank Group Corp and Chinese ride-hailing company Didi Chuxing Technology Co., people familiar with the matter said.

    The deal could be completed in the next few weeks and would value Grab, as it is known, at more than $5 billion—making it the region’s most valuable startup. Grab launched in 2012 and operates in 65 cities across seven countries.

    https://www.wsj.com/articles/uber-rival-grab-in-talks-for-up-to-2-billion-from-softbank-chinas-didi-1500032435

Artificial Intelligence

  • IBM’s AI can predict schizophrenia by looking at the brain’s blood flow

    The research team first trained its neural network on a 95-member dataset of anonymized fMRI images from the Function Biomedical Informatics Research Network which included scans of both patients with schizophrenia and a healthy control group. These images illustrated the flow of blood through various parts of the brain as the patients completed a simple audio-based exercise. From this data, the neural network cobbled together a predictive model of the likelihood that a patient suffered from schizophrenia based on the blood flow. It was able to accurately discern between the control group and those with schizophrenia 74 percent of the time.

    https://www.engadget.com/2017/07/20/ibms-ai-can-predict-schizophrenia-by-looking-at-the-brains-blo/

Cloud

  • Amazon nabs a top Box exec in health as it goes after the medical industry

    Missy Krasner, vice president and managing director of Box’s healthcare and life sciences group, is headed to the e-commerce company, according to two sources familiar with the matter. The sources, who asked not to be named because the hire hasn’t been announced, didn’t know exactly what role she’ll have.

    Amazon is investing heavily in health across a number of different areas, and another source said Krasner has been talking to Amazon Web Services for several years about a potential move.

    AWS, the cloud division, is bolstering its HIPAA-compliant offerings so that health-care providers and insurers can store and move customer data. Customers include Bristol-Myers Squibb, Siemens and Orion Health.

    http://www.cnbc.com/2017/07/20/amazon-hires-box-vp-missy-krasner-to-beef-up-health-division.html

  • Google wants to sell quantum computing in the cloud

    Whether or not you believe Google has honest-to-goodness quantum computers, the bigger problem is their limited access: they’re largely off-limits outside of the company itself. That could change sooner than you think, though. Bloomberg sources understand that Google is gearing up toward using its quantum systems in a “faster, more powerful” computing service than it offers today. It recently started offering access to researchers in order to spur development of tools and apps (including through an open source Project Q initiative), and there’s a new lab it describes as an “embryonic quantum data center.” It’s looking at the practical realities of quantum computing, in other words.

    https://www.engadget.com/2017/07/17/google-puts-quantum-computers-to-work-in-cloud/

  • Is Google’s Cloud Strategy Working?

    Alphabet doesn’t break out its cloud sales, but it believes it could beat Amazon to become the world’s largest cloud infrastructure vendor in the next five years. Amazon generated $3.7 billion in revenue from its cloud division, AWS (Amazon Web Services), in 2Q17, which represented a 42.0% YoY (year-over-year) rise.

    Alphabet’s cloud business will be on the radar of many investors as it reports 2Q17 earnings, mainly due to Google’s comments about its cloud strategy. Google earlier this year suggested that it doesn’t see itself joining rivals Amazon, Microsoft, and Oracle in cloud computing pricing wars.

    Instead, Google wants to compete on the basis of service quality and portray itself as the go-place for cloud services related to data analytics and artificial intelligence.

    http://marketrealist.com/2017/07/is-googles-cloud-strategy-working/

  • Amazon Cloud Service Drops Controversial Clause

    With competition heating up in the cloud computing arena, Amazon.com Inc. is removing a clause from its Amazon Web Services contracts that irked customers worried about their intellectual property (IP).

    Based on an updated version of the AWS customer agreement, the ecommerce giant has remove the non-asset clause from the contract that prevented customers from suing the company over patent infringement. With a tons of companies using AWS for computing and data storage, many were concerned that IP could end up in the hands of Amazon.

    http://www.investopedia.com/news/amazon-cloud-service-drops-controversial-clause/

  • Microsoft Profit Jumps, Fueled by Cloud Computing

    Microsoft doesn’t disclose revenue figures for its Azure and Office 365 businesses, but it said Azure revenue jumped 97% and Office 365 revenue rose 43%.

    Overall, Microsoft posted $6.51 billion in fourth-quarter net income, or 83 cents a share, compared with a profit of $3.12 billion, or 39 cents a share, a year ago. Excluding the impact of revenue deferrals and other items, adjusted earnings climbed to 98 cents from 69 cents a year earlier.

    https://www.wsj.com/articles/cloud-computing-helps-power-microsoft-earnings-1500583095

Datacenter

  • Michael Dell Says Public Cloud Is Important But It’s Not Everything

    “There’s a boomerang of companies moving to public cloud,” Dell said. “We’re not against it, but it’s not the right place to put all workloads.”

    For 90% of a given company’s predictable computing tasks, running them in-house or in a co-location center, costs less than public cloud, Dell said. A co-location center is a data center used by many businesses, each of which controls their own hardware and software.

    “AWS gets expensive when you scale it up,” Dell said. (That’s a contention that Amazon would likely contest.)

    http://fortune.com/2017/07/17/michael-dell-cloud-computing/

Software/SaaS

  • Rimini Street: Dispute with Oracle is contract law, not copyright

    The smaller company accepted some of the charges against it, saying it will pay $35.6m for “innocently infringing the software”, but appealed against the rest following the October 2016 judgment.

    Without being able to do this, Rimini Street is prevented from carrying out its responsibilities to its own clients, Perry added.

    He argued that Oracle had surrendered its exclusive rights to copying, and that Rimini had permission to copy the software – instead the issue was with the environment that it created and how that environment was used, and on which server it lived.

    “Cross-use and hosting are contract law,” Perry said. “Those are licence disputes… and ought to be resolved as matter of contract law and not copyright law.”

    https://www.theregister.co.uk/2017/07/14/oracle_vs_rimini_street_court_latest/

Other

  • IBM Revenue Decline Continues to Pressure Bottom Line

    The 4.7% drop in second-quarter revenue, to $19.3 billion, marked the 21st consecutive quarter of declining sales at IBM. Profit margins also narrowed across all business units, including the divisions for its main cloud computing and Watson-artificial intelligence operations—two areas Ms. Rometty is counting on to propel the company’s turnaround. Profit fell 6.9% from a year earlier.

    Earnings results exceeded analysts’ expectations. Still, revenue came in below forecasts, and shares in Big Blue slid more than 3% after-hours Tuesday, extending a roughly 8% drop this year through Tuesday’s close. In contrast, the S&P 500’s has gained nearly 9% during the same period.

    https://www.wsj.com/articles/ibm-revenue-decline-continues-to-pressure-bottom-line-1500411024

  • To Save IBM, Rometty Needs To Go Big Or Go Home

    Rometty should aggressively rebrand IBM by simply naming it after the one thing in which IBM remains a market leader – Watson. All efforts in the cloud should be geared towards not just acting as a service provider but differentiating IBM by tailoring Watson’s services to the given client’s data so it can augment their decision-making. While they’re at it they can rename their cloud effort Watson Cloud.

    https://www.forbes.com/sites/ryanwibberley/2017/07/19/to-save-ibm-rometty-needs-to-go-big-or-go-home/#2479fd827ac0
    Cramer: IBM is just another company that has been ‘Amazoned’

    Regarding IBM’s growth, Cramer said a lot of the initiatives the company is doing have not “kicked in yet, so the stock has not kicked in yet.” He added, “IBM is really burdened by the old business. And the new business — they’re up against these amazing companies.”

    http://www.cnbc.com/2017/07/19/cramer-ibm-is-just-another-company-that-has-been-amazoned.html

Photo: Robson Hatsukami Morgan

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News You Can Use: 7/19/2017

  • This Public Speaking Habit Is Annoying Your Audience

    When you pace too much, you’ll lose out on the opportunity to use your movement to punctuate what you’re saying. In writing, you use spacing to separate paragraphs on a page, and punctuation to build pauses into a sentence. Movement can do the same thing when you speak.

    For example, suppose you said, “We have to move in new directions. We have to innovate.” If you stood still and delivered those two lines non-stop, they’d land with little impact. If added a short pause between the sentences yet remained still the whole time, you’d have a bit more impact. But if you paused and also moved between delivering the first line and the second, you’d have the most impact.

    https://www.fastcompany.com/40438283/this-public-speak-habit-is-annoying-your-audience

  • What is that agile certification really worth?

    “Agile project success has less to do with whether or not developers are certified and much more to do with whether or not the entire organization is making the culture shift towards an agile mindset all the way from the lowest-level developer up to the CEO,” Doucette says.

    Taking time as an organization to understand, adopt and apply agile principles and practices is what it’s all about, he adds; agile certification, scrum masters, agile coaches and the like are not going to be effective on their own unless there is company-wide buy-in of the principles and practices behind the methodology, Doucette says.

    http://www.cio.com/article/3033058/certifications/do-agile-certifications-mean-anything.html

  • How to Control Your Rage, With Buddhist and Michelin Star Chef Eric Ripert
  • Senators warn FCC that it better be ready for Wednesday’s net neutrality Day of Action

    Oregon Senator Ron Wyden and Hawaii’s Brian Schatz asked the commission to confirm that it won’t be caught flat-footed during Wednesday’s net neutrality Day of Action.

    The two pro-net neutrality Senate Democrats cited an incident in May during which the FCC’s comment portal crashed due to what Pai described as a “non-traditional DDoS attack.” The Senators were rightfully suspicious about the supposed DDoS claim as it would have coincided with a call to action by TV host John Oliver, who urged viewers to leave comments expressing their displeasure at the FCC’s policies.

    https://techcrunch.com/2017/07/10/wyden-schatz-letter-to-pai-net-neutrality-day-of-action/?ncid=rss

  • The Overlooked Job Skill That Could Be the Key to Your Next Raise

    A recent study out of the University of Iowa showed that those who can type quickly are more likely to emerge as leaders of remote groups. That’s a direct correlation between typing speed and being perceived as a high performer.

    It goes without saying that high performers at work get promotions and raises more quickly. Thus, better typing skills should lead to higher salaries. Somewhere, Mrs. Ames is reading this and thinking, “I told you so!”

    The Iowa study found that “individuals who can type faster are able to more quickly communicate their thoughts and drive the direction of a team.” In my experience, that is spot on.

    http://www.thesimpledollar.com/the-overlooked-job-skill-that-could-be-the-key-to-your-next-raise/

Photo: Brodie Vissers

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SourceCast: Episode 80: AI – I want it now!

Investment firm Jefferies trashed IBM’s AI platform last week while other competitors like OpenText swooped in to kick Big Blue while she was down.  This week, I discuss IBM’s options and if Jefferies’ critiques are accurate.

Photo: Alex Knight

Music:

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Supplier Report: 7/14/2017

IBM is coming under fire by Jefferies and competitor OpenText over their AI success (or lack of it).  Jefferies says IBM customers are suffering from complicated implementations and OpenText claims that their AI platform is better and cheaper.

Google is hoping to leverage AI technology to make the world a better place.  And what better way to improve the world than to buy a small AI company in India (…that does have a social  focus).

Meanwhile Verizon made the world a slightly worse place by announcing a security breach that could impact up to 14 million customers.

Acquisitions

Artificial Intelligence

  • Microsoft to use AI to assist the blind, fix bias, and rescue the planet

    In order to make sure that further developments are pursued in the proper fashion—accessible and inclusive to everyone—Microsoft also noted that it is working on an Ethical Design Guide for AI product development, based on CEO Satya Nadella’s 10 principles for AI development.

    “As technology that uses AI gets smarter, we want to ensure that we take a responsible approach to our progress – and one that will ultimately provide the most benefit to our customers and to society as a whole,” Shum said at the event.

    http://www.techrepublic.com/article/microsoft-to-use-ai-to-assist-the-blind-fix-bias-and-rescue-the-planet/

  • Jefferies gives IBM Watson a Wall Street reality check

    Jefferies pulls from an audit of a partnership between IBM Watson and MD Anderson as a case study for IBM’s broader problems scaling Watson. MD Anderson cut its ties with IBM after wasting $60 million on a Watson project that was ultimately deemed, “not ready for human investigational or clinical use.”

    The MD Anderson nightmare doesn’t stand on its own. I regularly hear from startup founders in the AI space that their own financial services and biotech clients have had similar experiences working with IBM.

    The narrative isn’t the product of any single malfunction, but rather the result of overhyped marketing, deficiencies in operating with deep learning and GPUs and intensive data preparation demands.

    https://techcrunch.com/2017/07/13/jefferies-gives-ibm-watson-a-wall-street-reality-check/?ncid=rss
    IBM’s Watson, Despite Hype, Outgunned in A.I., Says Jefferies

    Kisner compiles his own estimates for Watson and finds them “somewhat disappointing for investors,” with IBM in the best scenario “barely recouping its cost of capital.”

    “From an EPS perspective, it seems unlikely to us under almost any scenario that Watson will generate meaningful earnings results over the next few years,” he writes. “In our Base case, Watson and associated “pull-through revenue” contributes 3% to Consensus EPS in 2019; in the Bull case, it’s still only 5%.”

    http://www.barrons.com/articles/ibms-watson-despite-hype-outgunned-in-a-i-says-jefferies-1499896835

  • OpenText launches Magellan, an AI platform aimed at IBM’s Watson

    OpenText is using an open source approach with Magellan with integration with Apache Spark and MLlib, a machine learning library. “We are combining the strengths of OpenText and the open source community,” said Adam Howatson, chief marketing officer at OpenText.

    Magellan’s approach will be to enable customers to leverage open source intellectual property and algorithms as well enabling companies to build their own models. Howatson added that OpenText’s Magellan platform will have a lower price point, be available as an appliance and be available on premises or via the cloud.

    http://www.zdnet.com/article/opentext-launches-magellan-an-ai-platform-aimed-at-ibms-watson/
    OpenText CEO on AI: Buying IBM may cost you your job (LMAO Mark Barrenechea)

    In a press conference following the announcement, Channelnomics asked Barrenechea how opportunities Magellan enables for resellers differs from those enabled by IBM Watson. The CEO responded by saying that while he’s doubtful of the idea of robots resulting in the loss of IT jobs, buying IBM technology may yield a different result.

    “I do think you lose your job if you buy IBM, and it’s our mission to crush that theme,” Barrenechea said. “That old adage ‘If you buy IBM you won’t lose your job’, I think, is dead. They are locked into their little swim lanes, and opening up insights into all those transactional systems is going to be very hard for them. It’s certainly proving to be massively expensive.”

    The CEO claimed that IBM Watson’s information lake is a “swamp of data”, adding that Magellan is different in its centric applications, focus on automation, AI and APIs and integration between transaction and AI system.

    https://www.channelnomics.com/channelnomics-us/news/3013620/opentext-launches-ai-rival-to-ibm-watson

Cloud

  • Workday finally pops for a PaaS – 10 questions it needs to answer

    In an unusual move, Aneel Bhusri Workday CEO took to the company’s blog to announce an intention for Workday to offer a platform upon which partners can extend the core Workday applications.

    If we take the example of Salesforce, that company has never had intentions of entering certain verticals or, for that matter, certain horizontals but by offering a platform (Force.com) upon which developers can knock themselves out, Salesforce has spawned a multi-billion dollar ecosystem from which it too benefits. The most immediate examples that spring to mind are Apttus in CPQ, FinancialForce in financials and Rootstock in manufacturing, all of which are built upon Salesforce’s PaaS.

    http://diginomica.com/2017/07/11/workday-finally-pops-paas/

Datacenter

  • Dell struggling after EMC purchase

    The $67-billion deal closed last September, so the new partnership is still in its very early stages, but early indications are that the arrangement hasn’t yet fared well, said Will Mitchell, a professor of strategic management at the Rotman School of Management at the University of Toronto.

    “It doesn’t mean that he can’t turn it around, but it better happen fast,” Mitchell said of Dell Founder, Chairman and CEO Michael Dell.

    Dell’s losses have actually only grown since the EMC deal went through. The company lost $1.5 billion In the first quarter of fiscal 2018, which ended in May. In the same quarter the year prior, Dell lost $139 million.

    http://www.wbjournal.com/article/20170712/NEWS01/307129996

  • HPE wants to grow again, announces new products and services to do it

    Whitman said that, according to IDC, more than half of enterprises have, or are considering bringing workloads back on-prem from the public cloud, thanks to what she referred to as the cloud cliff.

    “The cloud is absolutely the right choice for certain applications and use cases,” she said. But at some point, “they hit what we call the cloud cliff, where either for reasons of control, security, performance or cost, the platform they went with is no longer the best option.” That’s when moving to a hybrid environment makes sense.

    Also:

    While HPE has spun off its enterprise services into DXC, it still retains a robust technology services organization. Now branded Pointnext, HPE says it “helps customers harness the power of hybrid IT, real-time data and analytics, and mobile solutions to enhance customer experiences, create and deliver new digital product and services, and improve core operations at unprecedented speed and efficiency.”

    http://business.financialpost.com/technology/cio/hpe-wants-to-grow-again-announces-new-products-and-services-to-do-it/wcm/8d8cd127-3d07-4eee-a516-485b49251099

Software/SaaS

  • IBM: A Future Blockchain Leader?

    Given the low level of blockchain maturity in general, as well as specific IBM blockchain projects (more on these in the succeeding sections) being in their initial stages, it is too early to assess revenue from specific solutions. However, given the traction that IBM’s cloud-as-a-service offering seems to be getting with over 400 client engagements, blockchain has the potential to become one of the fastest-growing sources of revenue starting in 2017, when many of the first IBM enterprise applications are scheduled to roll out.

    https://seekingalpha.com/article/4086778-ibm-future-blockchain-leader

Other

  • Millions of Verizon customers affected by security breach

    Verizon confirmed that a recent security incident exposed the personal identification numbers and other private information pertaining to millions of telecom customers.

    Six million unique Verizon user accounts were affected by a data breach suffered by a third-party vendor detected last month, Verizon said Wednesday.

    UpGuard, a Silicon Valley security firm that first reported the data breach, said as many as 14 million Verizon accounts may have been affected.

    http://www.washingtontimes.com/news/2017/jul/13/millions-verizon-customers-impacted-security-breac/

  • Paying Professors: Inside Google’s Academic Influence Campaign

    Google has paid professors whose papers, for instance, declared that the collection of consumer data was a fair exchange for its free services; that the company didn’t use its market dominance to improperly steer users to Google’s commercial sites or its advertisers; and that it hasn’t unfairly quashed competitors. Several papers argued that Google’s search engine should be allowed to link to books and other intellectual property that authors and publishers say should be paid for—a group that includes News Corp, which owns the Journal. News Corp formally complained to European regulators about Google’s handling of news articles in search results.

    https://www.wsj.com/articles/paying-professors-inside-googles-academic-influence-campaign-1499785286?mg=prod/accounts-wsj

  • Microsoft CIO Jim DuBois departs amid layoffs; Kurt DelBene named chief digital officer

    DuBois was on sabbatical and decided to leave Microsoft as part of the reorganization of its global sales staff, which also includes thousands of job cuts. DuBois was named CIO in 2013, and he had been with Microsoft since 1993, where he worked in a variety of roles, mostly focused on information technology.

    Kurt DelBene is stepping up to fill the void of DuBois’ departure under his new title of chief digital officer. DelBene currently focuses on corporate strategy, and his new role will also see him working closely with core engineering teams across the company as well as IT. DelBene will also oversee the company’s digital transformation efforts.

    https://www.geekwire.com/2017/microsoft-cio-jim-dubois-departs-amid-layoffs-kurt-delbene-named-chief-digital-officer/

  • Microsoft’s Calibri font is at the center of a political scandal

    Pakistan’s government is in trouble. And its fate may hinge on a Microsoft font. Judicial investigators probing the financial assets of the country’s Prime Minister and his family allege his daughter (and apparent successor) forged documents to hide her ownership of overseas properties. How did they reach that conclusion? The documents from 2006 submitted by Maryam Nawaz (daughter of PM Nawaz Sharif) were in the Calibri font. That font, according to the investigation team’s leaked report, wasn’t publicly available until 2007.

    https://www.engadget.com/2017/07/12/microsoft-calibri-pakistan-fontgate/

  • Accenture handed $26M in Centrelink payments system overhaul

    Accenture Australia has been granted just over $26 million by the Government for the provision of systems integration services as part of the Department of Human Services’ landmark Centrelink payments system overhaul.

    Accenture’s latest purchase order for the project, the contract terms of which run from 26 May to 28 February 2018, was awarded via the Department of Human Service’s ‘Systems integrators for the provision of services related to WPIT [Welfare Payment Infrastructure Transformation]’ procurement panel, according to tender documents.

    https://www.arnnet.com.au/article/621596/accenture-handed-26m-centrelink-systems-overhaul/

Photo: danist soh

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News You Can Use: 7/12/2017

  • China’s All-Seeing Surveillance State Is Reading Its Citizens’ Faces

    China is rushing to deploy new technologies to monitor its people in ways that would spook many in the U.S. and the West. Unfettered by privacy concerns or public debate, Beijing’s authoritarian leaders are installing iris scanners at security checkpoints in troubled regions and using sophisticated software to monitor ramblings on social media. By 2020, the government hopes to implement a national “social credit” system that would assign every citizen a rating based on how they behave at work, in public venues and in their financial dealings.

    https://www.wsj.com/articles/the-all-seeing-surveillance-state-feared-in-the-west-is-a-reality-in-china-1498493020

  • Ira Glass on structuring stories, asking hard questions

    I’ve said this many times in many places, but the structure of stories on our show in this kind of narrative journalism is there’s plot and then there are ideas. And those are the two elements that you’re constantly monitoring to know whether or not you’ve got them. And in part I feel like when people hear that they don’t even know exactly what is meant by that. All plot is is a series of actions where one thing leads to the next—sort of like this thing led to this next thing, led to this next thing, led to this next thing, led to this next thing, and then some of the things in this list can be, “And then he said this to me, and as a result, I said this back to him, and then he said this back to me, and then I got angry and I stormed out and I wrote a bill saying…” What you want is one thing leads to the next leads to the next leads the next and the reason why we do that is because once you have any sequence of actions in order of like, this happened and then this happened and this happened that creates narrative suspense because you wonder what happened next.

    https://www.cjr.org/special_report/qa-ira-glass-turnaround-npr-jesse-thorn-tal.php

  • Act Like the Leader You Want to Be
  • There’s Now a Name for the Micro Generation Born Between 1977-1983

    So here it is, according to Dan Woodman, an associate professor of sociology at The University of Melbourne: Xennials.

    The idea is there’s this micro or in-between generation between the Gen X group – who we think of as the depressed flannelette-shirt-wearing, grunge-listening children that came after the Baby Boomers and the Millennials – who get described as optimistic, tech savvy and maybe a little bit too sure of themselves and too confident.

    http://didyouknowfacts.com/theres-now-a-name-for-the-micro-generation-born-between-1977-1983/
    While I agree that the generation I grew up with does not fit with GenX or Millennials, I hate that name.

  • If You’re a Top Performer, Get on Your Coworkers’ Good Side

    The study, led by Elizabeth Campbell of the University of Minnesota, and published in the Journal of Applied Psychology, looked at several hundred stylists working in a wide variety of salons—chosen because they represent a socially dynamic environment where colleagues have to work individually and interdependently in order to succeed. They found that peers were far more likely to speak ill of top performers and try to damage their reputation. Furthermore, the more collaborative the environment, the more peers tried to drag down top performers.

    http://lifehacker.com/if-youre-a-top-performer-get-on-your-coworkers-good-si-1796716739

Photo: Trinity Kubassek

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