IBM is making legal news this week with their attempt to block their former CIO from joining Amazon. They are also gaining headlines for a $78M ruling in favor of the State of Indiana due to IBM’s reported failure to implement a welfare privatization system.
Yet another diversity issue flared up in Silicon Valley this week and Google was at the center of this controversy. A (now former) employee posted a “manifesto” reinforcing gender stereotypes. Google was quick to address the problem, but the document has sparked semi-political conversations that will be harder to suppress.
Meanwhile, Amazon sells product under several alternative brands so you think there are more options when purchasing items from the retail giant.
Acquisitions
- Accenture Buys Digital Marketing Agency For Technical, Creative Skill Set
Accenture, aiming to enhance its creative marketing prowess and talent, has acquired Wire Stone, a 200-person Boise, Idaho marketing agency whose client list includes several big IT firms, including Microsoft, HPE and HP Inc.
The Dublin-based professional services giant said Wire Stone’s strategy, design, and technology expertise would help, particularly when it comes providing integrated campaigns, data-fueled insight and immersive digital customer experiences to big companies.
http://www.crn.com/news/channel-programs/300090281/accenture-buys-digital-marketing-agency-for-technical-creative-skill-set.htm
Accenture is stepping on IBM’s toes with the creative agency… - Tableau acquires ClearGraph, a startup that lets you analyze your data using natural language
Business intelligence and analytics firm Tableau today announced that it has acquired ClearGraph, a service that lets you query and visualize large amounts of business date through natural language queries (think “this week’s transactions over $500”). Tableau expects to integrate this technology with its own products as it looks to make it easier for its users to use similar queries to visualize their data.
- Markets are strong, but big startup M&A deals just aren’t happening
It’s not just the unicorn space where big deals aren’t happening. So far this year, only 17 well-funded private technology companies (defined here as those that raised $20 million or more in venture investment) have gone on to be acquired for disclosed or reported valuations over $100 million. Meanwhile, in 2016, there were almost that many at valuations of $500 million or more.
“It could be happenstance, or some sectors may be running into resistance due to high multiples,” says David Blumberg, managing partner at early-stage firm Blumberg Capital. He added that acquirers may also be waiting on the sidelines to see what happens with proposed tax reforms.
A Trump administration plan to dramatically reduce taxes on repatriated earnings may be a factor in delaying M&A. Currently, big technology companies are holding hundreds of billions of dollars in overseas accounts to shelter their earnings from U.S. taxes. Apple alone is estimated to be holding on to a cash stockpile of more than $250 billion, most in non-U.S. accounts. The Trump proposal would reportedly cut public companies’ income tax rate to 15 percent from 35 percent. It would also cut the tax on repatriated offshore earnings to 10 percent.
- SoftBank mulls Uber or Lyft investment
“We are interested in discussing with Uber, we are also interested in discussing with Lyft, we have not decided which way,” SoftBank’s CEO and founder Masayoshi Son said.
“Whether we decide to partner and invest into Uber or Lyft, I don’t know what will be the end result,” he told reporters at SoftBank’s first-quarter earnings briefing on Monday.
http://www.reuters.com/article/us-softbank-group-results-uber-idUSKBN1AN0XW
Artificial Intelligence
- SAP Ariba adds IBM Watson technology to procurement processes
This integration is happening in three waves, Rizza said. The first wave is accelerated response, which injects real-time response mechanisms into operational data, automating data capture and analysis for outcomes like personalized alerts for an operation that requires attention. The second wave is integrating intelligence into business processes like source-to-settle; for example, automating many of the routine tasks in the process that take up a buyer’s time. The third wave will encompass the entire enterprise ERP system, as intelligence goes beyond processes like source-to-settle and is built into processes like source-to-invoice or lead-to-cash.
Cloud
- IBM sues to stop former executive from working at cloud computing rival
Former IBM cloud computing executive Jeff S. Smith begins a new job today at a major rival, Amazon Web Services, much to the displeasure of his former employer.
“Were he permitted to join the senior management of AWS on Aug. 7,” declared Arvind Krishna, director of research, he “would inevitably be involved in decision-making about how best to compete against IBM and would inevitably disclose or use IBM trade secrets.”
Judge Cathy Seibel issued a temporary restraining order on Aug. 1, barring Smith, of Ridgefield, Connecticut, from starting work today at Amazon Web Services. He may not solicit customers, recruit former colleagues or disclose confidential information until a full hearing is held.
https://westfaironline.com/92334/ibm-sues-stop-former-executive-working-cloud-computing-rival/
Datacenter/Hardware
- Apple’s Expensive Game of Catch-Up
Apple, of course, is always loath to discuss any products it has in the works. But the company’s pipeline is a salient question for investors who may rightfully be wondering what to do with the stock once this year’s new iPhones see the light of day. Apple’s market value has surged 35% this year to $820 billion—adding $45 billion since last week’s earnings report, which all but confirmed that some new iPhones will indeed launch this quarter. And it is hard to forget that the stock has seen significant downturns twice in the past five years following big iPhone launches.
https://www.wsj.com/articles/apples-expensive-game-of-catch-up-1502202741
Software/SaaS
- Judge: IBM Owes Indiana $78M After Failed Welfare Privatization
Now, Judge Heather Welch says IBM should pay the state $128 million in damages, and that the state still owes IBM nearly $50 million in various fees.
The Daniels administration originally hired IBM to take over digital welfare services for the state Family and Social Services Administration. The contract was terminated in 2009 after numerous problems and has been tied up in court ever since.
IBM will appeal the decision.
http://www.wfyi.org/news/articles/judge-ibm-owes-indiana-78m-after-failed-welfare-privatization
Other
- Wisconsin Governor Defends Foxconn Deal Amid Growing Concerns
“Traditionally, these incentive packages, when we look back at them, tend to be expensive, inefficient and have a lot of unintended consequences,” said State Rep. Gordon Hintz, a Democrat whose district includes Oshkosh. “We all want to be seen as doing something proactive but there’s a large body of public policy research that lets you know you can’t buy sustainable economic development.”
The state assembly has already begun discussions over the bill and its committee on jobs and the economy plans to vote Monday, said House Speaker Robin Vos. The senate is beginning internal discussions and a joint committee on finance is expected to start discussions in the next two weeks. But Mr. Walker, a Republican, said he is confident the bill will be passed before Labor Day, which falls on Sept. 4.
- Amazon owns a whole collection of secret brands
Perhaps what Amazon is trying to do as it rapidly expands into new businesses—especially business areas where it might not have forged partnerships with well-known brands—is to give the impression to customers that there are tons of options to choose from, when in fact, they’re really just choosing between different Amazon brands. “Consumers pay a premium for a brand, that’s why they’re not store-generic,” DiMassimo suggested.
But as Amazon extends into new product lines, it risks overreaching and eroding trust. It has sold beef that’s “raised on a ranch in California” (with no more information available on its sourcing) and “96% USDA Certified” biologic detergent. In both cases it’s not entirely clear to customers that they’re buying products from Amazon, rather than companies that have made it their business to render meat or make chemical products longer than a year or two.
https://qz.com/1039381/amazon-owns-a-whole-collection-of-secret-brands/
Brands Strike Back: Seven Strategies to Loosen Amazon’s GripSome manufacturers are enforcing minimum advertised prices to make it harder for online sellers to undercut local merchants, while others give local stores first dibs on new products or funnel customers from their own websites to local outlets.
“The pendulum has swung,” said Rich Tauer, president of Quality Bicycle Products, a Bloomington, Minn., bicycle wholesaler that won’t sell to Amazon. The company’s sales representatives push brands that support local retailers by restricting advertised prices and enforcing restrictions on where products are being sold.
https://www.wsj.com/articles/brands-strike-back-seven-strategies-to-loosen-amazons-grip-1502103602
- Google Employee’s Anti-Diversity Manifesto Goes ‘Internally Viral’
The 10-page Google Doc document was met with derision from a large majority of employees who saw and denounced its contents, according to the employee. But Jaana Dogan, a software engineer at Google, tweeted that some people at the company at least partially agreed with the author; one of our sources said the same (Dogan’s tweets have since been deleted). While the document itself contains the thoughts of just one Google employee, the context in which they were shared—Google is currently being investigated by the Department of Labor for its gender pay gap and Silicon Valley has been repeatedly exposed as a place that discriminates against women and people of color—as well as the private and public response from its workforce are important.
“The broader context of this is that this person is perhaps bolder than most of the people at Google who share his viewpoint—of thinking women are less qualified than men—to the point he was willing to publicly argue for it. But there are sadly more people like him,” the employee who described the document’s contents to me said.
https://motherboard.vice.com/en_us/article/kzbm4a/employees-anti-diversity-manifesto-goes-internally-viral-at-google
Google’s New Diversity Chief Criticizes Employee’s MemoDanielle Brown, Google’s vice president for diversity and inclusion, sent a letter to employees Saturday saying the employee’s memo “advanced incorrect assumptions about gender” and is “not a viewpoint that I or this company endorses, promotes or encourages,” according to a copy of the statement published by Motherboard, which earlier reported on the employee’s memo.
https://www.wsj.com/articles/googles-new-diversity-chief-criticizes-employees-memo-1502037022
Google Fires Author of Divisive Memo on Gender DifferencesAlphabet Inc.’s Google has fired an employee who wrote an internal memo blasting the web company’s diversity policies, creating a firestorm across Silicon Valley.
James Damore, the Google engineer who wrote the note, confirmed his dismissal in an email, saying that he had been fired for “perpetuating gender stereotypes.” He said he’s “currently exploring all possible legal remedies.”
- Microsoft only paid $30 million income tax last year, lowest since 2003
The Seattle Times story notes that the $30 million figure is somewhat alarming, as Microsoft paid $136 million in state and local income tax payments in 2016. According to the Tax Policy Center think tank, 44 states (and Washington, D.C.) require corporate income taxes. For companies that are headquartered out-of-state, state governments usually only tax companies for activities that occur in their particular state.
Washington state taxes corporations through its business and occupation (B&O) tax, which imposes a tax on the value of products sold in state. According to Microsoft, the $30 million figure does not include Washington’s B&O tax. The lowered payment might be due to Microsoft moving much of its operations overseas, as Microsoft reported $142 billion in overseas income as of June 30, 2017, a 15% increase over 2016.
https://www.onmsft.com/news/microsoft-only-paid-30-million-income-tax-last-year-lowest-since-2003
- Mobility Officially Bumped From Microsoft’s Strategy
Microsoft is making clear, however, that while it may be moving away from creating mobility, it wants to be inside that technology, pushing artificial intelligence as its next major effort.
It’s not as if Microsoft won’t have a mobile presence whatsoever, of course. The AI assistant Cortana is enabled for use on iOS and Android; the majority of enterprise business professionals use LinkedIn’s mobile app; and Skype is available just about everywhere. This certainly isn’t a death knell for the company, but as CEO Satya Nadella said in the fall of 2016, Microsoft needs to remember its roots as a platform-first company.
https://www.enterprisemobilityexchange.com/news/mobility-officially-bumped-from-microsoft%E2%80%99s
Photo: Raw Pixel