Supplier Report: 10/31/2015


Oracle World happened and as expected, Hurd and Ellison made plenty of amusing remarks about their competitors.  As Ellison remarked that IBM is not a competitor, big blue went out and bought the Weather Company… for $2B.

Hewlett Packard is officially and finally splitting this weekend.  The two companies are facing unique market conditions in light of the Dell-EMC deal.


  • IBM Will Acquire The Weather Company’s Digital Business

    IBM announced this morning it’s acquiring The Weather Company, the parent company to the The Weather Channel, as well as the company’s B2B, mobile and web properties. The deal is being valued at more than $2 billion, according to a report from The Wall St. Journal. The companies are not disclosing the financial terms, however. The deal will see The Weather Company licensing weather forecast data and analytics from IBM under a long-term contract. The Weather Channel is not included in the acquisition.

  • Why does this keep happening to IBM?

    For the second time in a little over two years, Big Blue faces an investigation into how it records revenue. The company disclosed on Tuesday that the SEC is looking into the “accounting treatment of certain transactions in the U.S., U.K. and Ireland.”

    The stock dropped 4 percent to $137.86 after the revelation and was down 14 percent for the year at Tuesday’s close before bouncing back a bit Wednesday morning.

  • IBM: The Line In The Sand

    One of the items that is hindering IBM from making a large acquisition is the fact that the company has $32 billion in long-term debt. This is the exact time IBM needs all of its resources to try to generate revenue growth, however they will be hindered by debt maturities in 2016. The following chart fromMorningstar shows that IBM has a large number of debt maturities coming in the next five years. Specifically next year, IBM has $5 billion in debt due and while they can easily pay off the debt, it is a drain on potential cash and cash flows that could be used to invest in the business or make an acquisition.

  • IBM Cloud Opens To Apache Spark

    IBM will provide Apache Spark as a service onBluemix, IBM’s cloud platform. IBM will also be pushing Spark into BigInsights on Bluemix, as well as IBM’s Data Science Workbench and its SPSS Analytics Server and Modeler.

  • Intel, Oracle Working Together To Take On IBM

    A few months ago, the head of engineering and products at Oracle, Thomas Kurian, and Doug Fisher from Intel’s Software and Services Group decided to set up a joint team of engineers codenamed Project Apollo near Intel’s facilities in Oregon, the report said.

    The team has been assigned the task of figuring out how massive cloud computing data centers could be set up that make use of Oracle’s hardware and Intel’s chips to take on IBM in the cloud computing hardware market. Project Apollo has successfully completed its mission, and the team members are now sharing “how to” documents to convince enterprise customers to use their technology in building data centers, the report said.


Hewlett Packard (the split happens this weekend)

  • Meg Whitman bets that a smaller HP will be able to beat Dell

    But in the server space, Dell is waiting. With EMC, it gets the No. 1 provider of storage gear, making it a one-stop shop for corporate customers. If Dell’s strategy works, Hewlett Packard Enterprise will just continue the former HP’s fate, where sales have declined for 15 of the past 16 quarters. PC shipments, where HP is No. 2, fell 7.7 percent in the third quarter, according to Gartner. For servers, where Hewlett-Packard is the market leader, second-quarter shipments slowed to 8 percent from 13 percent in the prior period.

  • Why Hewlett-Packard Company’s Troubles May Not End With Breakup

    Post breakup, there is a fair chance that the resulting HP companies will acquire to compensate for their various shortcomings. While acquisitions might add some important assets (technology and talents), any kind of acquisition comes with a certain level of risk. Integration is one of the challenges that companies meet after they acquire a new asset. History shows that many of Hewlett-Packard’s past acquisitions never happened smoothly, a problem that may carry into the resulting entities.

    The other risk is that acquisitions predicated on desperation to catch up with the competition could fail to live up to expectations, be costly or unnecessarily disruptive. The two resulting HP businesses may not stay clear of these acquisition risks.


  • Dell acquisition of EMC could jostle Microsoft’s plans

    Dell, clearly, cannot risk this in the long term. It needs an operating system of its own. VMware’s Photon Stack is a great start, but it is only a start. It would not shock me at all to see Dell buy Red Hat in the next two years. It would be the final piece of the puzzle for a fully vertically integrated play.

    Microsoft doesn’t want to see that happen. And after seeing the tab for the Dell acquisition of EMC, I am sure Dell doesn’t want to spend the money either. Ample time and effort is going to be spent trying to find amicable solutions that allow both companies to coexist.


  • Workday Inc Becoming A Cause Of Concern To Oracle Corporation’s Cloud Business

    However, Workday Inc (NYSE:WDAY) built its business on the cloud from the ground upward, giving it an edge in competition with Oracle in HR and Finance applications delivered through the cloud. Because of its nature and the steps it has already made, Workday could cause more grief for Oracle and other legacy software vendors as enterprises shift from on-premise installations to the cloud.

  • Red Hat is boring — and more open source companies should emulate it

    But whether such companies like it or not, the minute they base their success on an open source project, their revenue potential is hampered compared to a proprietary competitor. Sure, companies like Cloudera, MongoDB, and DataStax sell proprietary value around an open source project, but most are still somewhat constrained by their need to compete with the free project they sponsor. None of which is to suggest these companies will hurt for revenue. Rather, it’s a reminder that the best way for an open source company to grow is like Red Hat: steady, consistent, boring.

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