Oracle and MicroFocus had a very rough week at the stock market. MicroFocus dropped over 50% in value due to complications integrating HP software assets. Oracle investors are reacting to a lack of progress in cloud sales.
SAP settled a $600M software dispute with Anheuser-Busch, terms were not disclosed, but I am sure all parties need a drink after those discussions.
As China gains more traction in artificial intelligence, the US is attempting to curb any domestic growth in consumer goods or tech acquisitions. Is this a sound strategy or is this the start of a potential trade war?
Acquisitions
- Sources: Google is buying Lytro for about $40M
Multiple sources tell us that Google is acquiring Lytro, the imaging startup that began as a ground-breaking camera company for consumers before pivoting to use its depth-data, light-field technology in VR.
One source described the deal as an “asset sale” with Lytro going for no more than $40 million. Another source said the price was even lower: $25 million. A third source tells us that not all employees are coming over with the company’s technology: some have already received severance and parted ways with the company, and others have simply left. Assets would presumably also include Lytro’s 59 patents related to light-field and other digital imaging technology.
https://techcrunch.com/2018/03/20/sources-google-is-buying-lytro-for-about-40m/
- Salesforce is buying MuleSoft at enterprise value of $6.5 billion
But of course Salesforce gets more than tech with this purchase, which it can integrate into its growing family of products. It also gets major customers like Coca-Cola, VMware, GE, Accenture, Airbus, AT&T and Cisco. While Salesforce may have a presence already in some of these companies already, Mulesoft gives them entree into areas they might not have had and gives them the ability to expand that presence.
What’s more, the company has big revenue goals. Having reached $10 billion in revenue faster than any software company ever has, a point that Chairman and co-founder Marc Benioff has been happy to make, they have actually set their sites on $60 billion by 2034. That’s a long way away, of course, but having a company like MuleSoft in the fold, which made almost $300 million in revenue in fiscal 201, will certainly help.
https://techcrunch.com/2018/03/20/salesforce-is-buying-mulesoft-at-enterprise-value-of-6-5-billion/
- Google’s Cloud Boss Is Eyeing a ‘Major Acquisition’ to Get Ahead
For 2018, Greene and her deputies mentioned a focus on winning customers in health care, energy and financial services. Greene said Google will keep working to sign cloud deals with the government, too. The company recently got its FedRAMP certification, a key clearance needed to provide cloud services to the U.S. government.
Over the past two years, Alphabet has scaled back several costly initiatives, including projects in fiber broadband and drones. But the company has plowed money into Greene’s division. (Greene, an Alphabet director, said she recuses herself from board votes on cloud acquisitions.) That investment is indicative of the support that Alphabet CEO and Google co-founder Larry Page has for the business, Greene noted.
“The entire board, including Larry, is pretty thrilled with what’s going on in cloud,” she said. “How could they not be? It’s phenomenal what the team has achieved.”
- Qualcomm’s Jacobs to Leave Board as He Explores Acquisition
Qualcomm Inc. said director Paul Jacobs, son of the chipmaker’s founder and a former chief executive officer, will leave the board after he decided to explore an acquisition of the company.
“The board reached that decision following his notification to the board that he has decided to explore the possibility of making a proposal to acquire Qualcomm,” the company said in a statement on Friday.
Jacobs, 55, was stripped of his executive chairman title last week as the company sought to fend off a $117 billion hostile takeover bid from Broadcom Ltd. The board largely agreed with Jacobs that Broadcom’s bid was too low. However, early counts in a board vote tied to the Broadcom bid showed many Qualcomm shareholders had voted to replace Qualcomm directors, including Jacobs and Chief Executive Officer Steve Mollenkopf. U.S. President Donald Trump blocked the deal earlier this week.
Artificial Intelligence
- Look out, Alexa and Google Assistant — Watson Assistant is coming for you
One of the key differentiating factors between Watson and all other smart assistants is its status as a white label product. That means that there’s no specific way in which to use Watson Assistant — there is no set wake word, nor a dedicated smart speaker in which the assistant will live. Rather, companies will be able to leverage Watson however they see best, making it easier to add actions and commands. And perhaps most importantly, every individual application of Watson Assistant will keep its data to itself, which means that large companies can’t, as The Verge notes, “pool information on users’ activities across multiple domains.”
As IBM’s vice president of Watson Internet of Things, Bret Greenstein, explained to The Verge, “If you start running the entire world through Alexa, it’s an enormous amount of data and control to give to one company.” But Watson Assistant hopes to avoid that situation.
- FedEx Follows Amazon Into the Robotic Future
Yes, the robots replaced a few jobs right away. And in time, they will replace about 25 jobs in a facility that employs about 1,300 people. But the hub creates about 100 new jobs every year — and a robot work force still seems like the distant future.
“Everyone will have a job,” said Galen Steele, the senior manager who oversees the depot. “It just might be in a different place.”
As people have become more comfortable buying online, big and bulky goods like car tires, canoes and boxes as big as a coffin have accounted for an increasing percentage of the packages flowing through FedEx’s distribution centers, said Ted Dengel, who oversees operations technology for the FedEx Ground network, which includes 35 shipping hubs across the United States and Canada, including the facility in North Carolina.
These ungainly items can’t fit on a conveyor belt. That’s where the robots, which cost several thousand dollars and are made by a Massachusetts company called Vecna, come in.
https://www.nytimes.com/2018/03/18/technology/fedex-robots.html
- China wants to shape the global future of artificial intelligence (Thanks JD)
“[The Chinese government] sees standardization not only as a way to provide competitiveness for their companies, but also as a way to go from being a follower to setting the pace,” says Jeffrey Ding, a student at Oxford University’s Future of Humanity Institute who studies China’s nascent AI industry, and who translated the report. The government’s plan cites the way US standards bodies have influenced the development of the internet, expressing a desire to avoid having the same thing happen with AI.
China’s booming AI industry and massive government investment in the technology have raised fears in the US and elsewhere that the nation will overtake international rivals in a fundamentally important technology. In truth, it may be possible for both the US and the Chinese economies to benefit from AI. But there may be more rivalry when it comes to influencing the spread of the technology worldwide.
Cloud
- Oracle stock heads for worst day in nearly 5 years, analysts run for shelter after cloud bursts
In Oracle’s earnings conference call, CEO Safra Catz told analysts that the firm expects to report adjusted earnings of $0.92 to $0.95 per share and revenue growth of 1% to 3% for the fourth quarter. Heading into the report data, our Zacks Consensus Estimates were calling for earnings of $0.90 per share and revenue growth of 2.6%.
But the real concern for investors is Oracle’s slowing cloud growth. Management guided for total cloud revenues to improve between 19% and 23% in Q4, which is sluggish compared to the 32% growth it saw this quarter-and even worse considering the 51% and 44% rates it witnessed in Q1 and Q2.
https://www.nasdaq.com/article/is-oracle-orcl-worth-buying-on-the-post-earnings-dip-cm937297
Security
- Best Buy to Stop Selling Huawei Phones
U.S. intelligence leaders have recently recommended against Americans using phones from Huawei or Chinese rival ZTE Corp. The most recent to do so was Paul Nakasone, the nominee to head both the National Security Agency and U.S. Cyber Command, who said at a Senate hearing last week that he wouldn’t want his friends or family using such devices.
In addition to selling smartphones, Huawei is the world’s top maker of the equipment that goes into cellular towers and related infrastructure. The U.S. government’s broad concern is that the Chinese government could order Huawei to exploit knowledge of how its electronics are designed to spy or launch cyberattacks. Huawei says it is employee-owned and that no government has ever asked it to spy on or sabotage another country.
https://www.wsj.com/articles/best-buy-to-stop-selling-huawei-phones-1521725835
Software/SaaS
- DocuSign has filed confidentially for IPO
Like Dropbox, which is finally going public this week, San Francisco-based DocuSign has been an anticipated IPO for several years now. It’s raised over $500 million since it was founded in 2003 and has been valued at $3 billion. Kleiner Perkins, Bain Capital, Intel Capital, GV (Google Ventures) and Dell are among the many well-known names which have invested in DocuSign.
But like many “unicorns” these days, the company took its time, spending 15 years as a private company. The DocuSign team decided that 2018 is the year for its debut and is targeting an IPO in either the second or third quarter.
https://techcrunch.com/2018/03/20/docusign-has-filed-confidentially-for-ipo/
- Coca-Cola and US government use blockchain to curb forced labor
Coca-Cola, the US State Department and a trio of crypto organizations (Bitfury Group, Blockchain Trust Accelerator and Emercoin) have launched a pilot project that will use blockchain to enforce worker rights. The initiative would use blockchain’s distributed ledger technology to create a secure, decentralized registry for workers and their contracts. They’d not only have the sort of identification that isn’t always guaranteed, but a trail of evidence in case employers abuse their power or don’t honor their end of a bargain.
https://www.engadget.com/2018/03/18/coca-cola-and-us-government-use-blockchain-to-curb-forced-labor/
- Microsoft’s Edge Browser Could Soon Be Harder to Ignore in Windows 10
But if you keep scrolling, near the bottom of the patch notes for build 17623, there’s a bullet point that says Insiders on the Skip Ahead ring “will begin testing a change where links clicked on within the Windows Mail app will open in Microsoft Edge.” Please say it ain’t so. This means that regardless of what your default browser is set to in Windows 10, any hyperlink you click in the Mail app would open in Edge, whether you like it or not.
Microsoft justifies this by saying Edge “provides the best, most secure and consistent experience on Windows 10 and across your devices” and that “With built-in features for reading, note-taking, Cortana integration, and easy access to services such as SharePoint and OneDrive, Microsoft Edge enables you to be more productive, organized and creative without sacrificing your battery life or security.”
https://gizmodo.com/microsoft-s-edge-browser-could-soon-be-harder-to-ignore-1823843562
- LinkedIn’s $27 Billion Challenge: Get People to Use It More
Just 18% of LinkedIn members used the service daily in April 2016, according to Pew Research’s most recent look at the service’s usage in November 2016, a month before Microsoft MSFT 0.45% closed the deal. That’s down from 21% a year earlier.
What’s more, more than half of members, 51%, used LinkedIn every few weeks or less often, Pew found. By comparison, 76% of Facebook Inc. members used the service at least daily, Pew found.
At the time of the deal, Microsoft Chief Executive Satya Nadella said one goal was to weave together the tools people use to get their jobs done and professional networks that connect workers.
https://www.wsj.com/articles/linkedins-27-billion-challenge-get-people-to-use-it-more-1521201600
- Oracle claims database 10 times cheaper than AWS, analyst says cloud on ‘continual slide’
Speaking on an earnings call, transcribed by Seeking Alpha, Hurd talked up Oracle’s new autonomous database.
“The amazing thing about the autonomous database is that it is the only database on the planet that requires no human labor to administer,” he said.
“Oracle has a faster database than Amazon, it’s no big surprise there, but the interesting thing [is that] Amazon charges by the minute and we charge by the minute; our prices are essentially the same or close enough.
“If we run 10 times faster, we are one-tenth the cost of Amazon’s database. We’ve been through all the public benchmarks – you can go and look at them – we’re one-tenth the cost.”
- Hewlett Packard Spin-Off Falters, as Shares Drop 55% in London
It hasn’t worked out as planned. Micro Focus shares plunged 46% Monday after it said technical problems related to combining the computer systems of Micro Focus and HPE would lead to lower-than-expected sales.
Micro Focus also said its chief executive, Chris Hsu, resigned after a 6½-month tenure. Previously HPE’s chief operating officer, Mr. Hsu was appointed CEO in January 2017 and officially took the position when the merger was completed this past September.
https://www.wsj.com/articles/hewlett-packard-spin-off-falters-as-shares-drop-55-in-london-1521471054
Other
- Facebook Suspends Data Firm That Helped Trump Campaign
Facebook said late Friday that it been given information that Cambridge Analytica, along with two individuals who don’t work there, improperly kept Facebook user data for years despite telling the social network that it had destroyed those records. Facebook didn’t say how Cambridge Analytica used that data or if it gave the data to the Trump campaign.
Facebook, which didn’t elaborate on the source of its information, said it is suspending Cambridge Analytica, its parent Strategic Communication Laboratories and the two individuals from buying ads or administering clients’ pages while it investigates the reports.
The move once again spotlights Facebook’s role during the 2016 presidential election and its shortcomings in policing manipulation and misuse of its platform.
- SAP settles licensing dispute with AB InBev
Questioned about the settlement, an SAP spokesman added just one adjective: “There is nothing more to say than ‘There was a dispute and it was resolved amicably,’” he said via email.
That the companies were able to conclude the dispute so amicably and quietly comes down to the framework SAP used to enforce its licensing agreement: the Commercial Arbitration Rules of the American Arbitration Association.
Commercial arbitration proceedings are usually conducted in private, and unlike in U.S. courts, filings and rulings are not matters of public record.
When a licensing dispute goes to court, it’s generally a lot harder to keep quiet, as another alcoholic beverage maker, Diageo, found when SAP sued it for accessing data stored in its SAP system without the appropriate licenses. In February 2017 a U.K. court ruled that Diageo needed named-user licenses for customers and employees to access the SAP system, even when they did so indirectly through a Salesforce.com app. The court didn’t immediately rule on how much Diageo had to pay, but SAP was asking for £54,503,578 (around $76 million).
- Cutting “old heads” at IBM
The company reacted with a strategy that, in the words of one confidential planning document, would “correct seniority mix.” It slashed IBM’s U.S. workforce by as much as three-quarters from its 1980s peak, replacing a substantial share with younger, less-experienced and lower-paid workers and sending many positions overseas. ProPublica estimates that in the past five years alone, IBM has eliminated more than 20,000 American employees ages 40 and over, about 60 percent of its estimated total U.S. job cuts during those years.
In making these cuts, IBM has flouted or outflanked U.S. laws and regulations intended to protect later-career workers from age discrimination, according to a ProPublica review of internal company documents, legal filings and public records, as well as information provided via interviews and questionnaires filled out by more than 1,000 former IBM employees.
https://features.propublica.org/ibm/ibm-age-discrimination-american-workers/
- Trump strikes back at Chinese tech practices with new tariffs
Trump directed his administration to take action that will likely result in tariffs on a proposed list of 1,300 products as punishment for Beijing’s intellectual property practices, senior White House officials said ahead of the announcement.
The officials said the list of targeted products will largely focus on technology China is accused of forcefully taking from U.S. companies. The value of that list represents the harm that U.S. companies have suffered from China’s practices, they said.
“What you’ll see is that many of these areas are those where China has sought to acquire advantage through the unfair acquisition or forced technology transfer from U.S. companies with an aim toward establishing its own competitive advantage,” said Everett Eissenstat, deputy director of the White House National Economic Council, during a call with reporters.
https://www.politico.com/story/2018/03/22/trump-chinese-tech-practices-tariffs-428551
Photo by Guzmán Barquín on Unsplash