Supplier Report: 7/13/2018
Amazon is sending computer networking technology stocks into a dive with rumors they are getting into the router business. Can the “eater of worlds” break into a market with low margins, demanding customers, and ever-present threat of hacks and security issues – and maintain customer satisfaction?
Amazon does control half of all online sales in the US… HALF. So they do know a thing or two about network traffic optimization.
IBM is finding that big data breaches cost corporations on average about $3.5M per event. Better make sure those routers are updated.
Acquisitions
- Broadcom acquires CA Technologies for $18.9B in cash
Broadcom, the massive semiconductor supplier you may remember from its failed attempt to acquire Qualcomm, today announced that it has reached a definitive agreement with CA Technologies, a major IT management software and solutions provider. The price of the acquisition is $18.9 billion in cash. CA’s shareholders will receive $44.50 per share, a 20 percent premium over the closing price of the company’s stock today.
https://techcrunch.com/2018/07/11/broadcom-acquires-ca-technologies-for-18-9b-in-cash/
- The Department of Justice isn’t done fighting the AT&T-Time Warner merger
“The Court’s decision could hardly have been more thorough, fact-based, and well-reasoned,” said AT&T General Counsel David McAtee in a statement. “While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances. We are ready to defend the Court’s decision at the D.C. Circuit Court of Appeals.”
https://techcrunch.com/2018/07/12/doj-appeals-att-time-warner/
- AT&T acquires threat intelligence company AlienVault
AT&T has announced plans to acquire cybersecurity company AlienVault. Terms of the deal were not disclosed.
Founded in 2007, AlienVault offers a number of tools for detecting and responding to security threats through its Unified Security Management (USM) platform, while its Open Threat Exchange (OTX) platform serves as an online community where security professionals and researchers can share their latest findings and threat data.
https://venturebeat.com/2018/07/10/att-acquires-threat-intelligence-company-alienvault/
- Intel To Acquire eASIC: Lower Cost ASICs in FPGA Design Time
Intel is also announcing that it will acquire a company called eASIC which develops FPGA-like design tools to roll out ‘structured ASICs’. These structured ASICs an intermediary between a full FPGA and a full ASIC that allow for a quick roll out time and cheaper production cost. Technically Intel has been using eASIC technology since at least 2015 in its custom Xeons, however today’s announcement means that the eASIC team will become part of Intel’s Programmable Solutions Group (PSG). The deal is expected to close within the next month.
https://www.anandtech.com/show/13075/intel-acquires-easic-lower-cost-asics-in-fpga-design-time
Artificial Intelligence
- Google Is Reportedly Looking to Take Over Call Centers With Its Duplex AI Assistant
A report from The Information suggests Google may be making a play to find other applications for its human-sounding assistant and has already started experimenting with ways to use Duplex to do with away roles currently filled by humans—a move that could have ramifications for millions of people.
Citing a person familiar with Google’s plans, The Information reported the company is already in conversation with at least one potential customer that would like to integrate Duplex into its operations. That firm, an unnamed large insurance company, is reportedly interested in using the voice assistant to handle simple, straightforward customer service calls.
https://gizmodo.com/google-is-reportedly-looking-to-take-over-call-centers-1827379911
Cloud
- Oracle Set to Merge Its Cloud Business
Oracle (ORCL) is gradually converting its cloud service types—SaaS1, PaaS2, and IaaS3—into a single standard data center. These data warehouses are supported by a bare-metal infrastructure managed by a single unified operations team.
The consolidation of these cloud services may help offer Oracle huge economies of scale by sharing data warehouse costs across the three categories, expanding margins. By bringing all three categories under one roof, the company can also improve efficiency.
https://marketrealist.com/2018/07/oracle-set-to-merge-its-cloud-business
Security
- ‘Mega’ Data Breaches Cost Companies a Staggering Fortune, IBM Study Finds
According to the IBM study, while the average cost of a data breach globally hovers just under $4 million—a 6.4 percent increase over the past year—costs associated with so-called mega breaches (an Equifax or Target, for example) can reach into the hundreds of millions of dollars. The average cost of a breach involving 1 million records is estimated at around $40 million, while those involving 50 million records or more can skyrocket up to $350 million in damages.
Of the 11 mega breaches examined by IBM, 10 were a result of criminal attacks.
The average amount of time that passes before a major company notices a data breach is pretty atrocious. According to IBM, mega breaches typically go unnoticed for roughly a year.
https://gizmodo.com/mega-data-breaches-cost-companies-a-staggering-fortune-1827510737
- Microsoft urges lawmakers to regulate facial recognition technology
The company, one of the key makers of software capable of recognizing individual faces, said it would take steps to make those systems less prone to bias; develop new public principles to govern the technology; and move more deliberately to sell its software and expertise in the area. While Microsoft said the technology industry bears responsibility for its products, it argued that government action is also needed.
“The only effective way to manage the use of technology by a government is for the government proactively to manage this use itself,” Microsoft’s president and chief legal officer, Brad Smith, said Friday in a blog post. “And if there are concerns about how a technology will be deployed more broadly across society, the only way to regulate this broad use is for the government to do so. This in fact is what we believe is needed today — a government initiative to regulate the proper use of facial recognition technology, informed first by a bipartisan and expert commission.”
http://www.latimes.com/business/technology/la-fi-tn-facial-recognition-20180713-story.html
Software/SaaS
- OpenText CEO opens up on organic growth ambitions
But while M&A continues to be the leading growth driver for OpenText, opportunities for organic growth seem to be getting more attention at Canada’s largest software company, judging from announcements and discussions at the company’s Enterprise World 2018 event, being held this week in Toronto. And what does the company expect to be the three main sources of that growth? Cloud, AI and security.
For a start, there was CEO Mark Barrenechea’s announcement in his Tuesday keynote of two new strands to the company’s cloud strategy: first, the release of the company’s new hybrid cloud platform OT2; and second, the news that its flagship EIM platform, OpenText Release 16, will now run on cloud infrastructure provided by Amazon Web Services, Google and Microsoft Azure, in addition to the existing options of on-premise or on the OpenText cloud as a managed service.
https://diginomica.com/2018/07/12/opentext-ceo-opens-up-on-organic-growth-ambitions/
Datacenter/Hardware
- Amazon Web Services Targets Cisco in Networking
Networking company stocks fell off Friday following a report by The Information that Amazon Web Services is considering selling its own network switching devices.
Cisco dropped 4 percent by the end of trading, representing a loss in stock value of roughly $8.5 billion. Juniper gave up more than 2 percent. Arista Networks dropped more than 4 percent, and F5 Networks dropped roughly a percent. Broadcom, which makes chips used in switching devices, was down more than 3 percent on the day following the report, extending a rough week for the stock.
https://www.cnbc.com/2018/07/13/aws-network-devices-report-cisco-juniper-fall.html
Other
- Amazon’s share of the US e-commerce market is now 49%, or 5% of all retail spend
Amazon is set to clear $258.22 billion in US retail sales in 2018, according to eMarketer’s figures, which will work out to 49.1 percent of all online retail spend in the country, and 5 percent of all retail sales.
Now, it is fast approaching a tipping point where more people will be spending money online with Amazon, than with all other retailers — combined. Amazon’s next-closest competitor, eBay, a very, very distant second at 6.6 percent, and Apple in third at 3.9 percent. Walmart, the world’s biggest retailer when counting physical stores, has yet to really hit the right note in e-commerce and comes in behind Apple with 3.7 percent of online sales in the US.
- Xiaomi’s Weak I.P.O. Raises Doubts About China’s Tech Boom
But many investors view Xiaomi as still largely a hardware maker, not an internet company. It has promised fatter margins from selling internet services to its smartphone users, but those services accounted for less than 9 percent of last year’s revenue.
“Xiaomi has been billing itself as a Chinese internet company, but they really are not quite yet a pure internet company,” said Dan Wang, a technology analyst at Gavekal Dragonomics.
“Investors haven’t really bought into that story,” Mr. Wang added.
https://www.nytimes.com/2018/07/08/business/xiaomi-hong-kong-ipo.html
- IBM earnings: Security is growing fast, but is it enough money to matter?
Through the first quarter, IBM’s security business had generated $3.4 billion in revenue in the previous 12 months, for growth of 66% year over year, the company told MarketWatch. In the first quarter, security brought in $800 million with growth of 65% from the year-ago period, compared with SI’s 15% growth overall.
That is just a fraction of IBM’s $19.07 billion in reported revenue, however, and may not be enough to truly move the needle as other segments grow much slower. Analysts expect technology services and cloud-platform revenue to rise 2.6%, to $8.63 billion and cognitive-solutions revenue to rise 4.4% to $4.76 billion from the year-ago quarter. Technology services and cloud-platform includes IBM Cloud, formerly known as Bluemix, while cognitive solutions includes IBM’s Watson AI.
Photo by Andrew Sharples on Unsplash
Supplier Report: 7/6/2018
Dell is going public again after Founder Michael Dell took the company private 5 years ago. Keeping VMWare was a major driver in this decision as is managing the debt incurred from acquiring EMC two years ago.
IBM has lined up ANOTHER large IT contract, this time with the Australian government which is surprising considering several public failures on joint efforts over the last few years.
Acquisitions
- Dell will again become a publicly traded company in $22 billion buyout
Dell is returning to the public market in a $22 billion stock buyout that will still leave CEO / founder Michael Dell and investment firm Silver Lake firmly in charge, as reported by The Financial Times. The company went private in 2013 following a $25 billion buyout by Dell and Silver Lake. Since then, Dell has seen success both in the enterprise market and with its consumer-focused PCs.
By moving back to the public sphere, Dell and Silver Lake will retain control over VMWare — which Dell acquired back in 2015 when it purchased enterprise data company EMC to better appeal to business customers — and be placed in a better position to reduce its debts.
https://www.theverge.com/2018/7/2/17525450/dell-public-company-stock-buyout-market
- AT&T Jacks Up TV Prices Post Merger After Claiming That Wouldn’t Happen
AT&T last week informed its DirecTV Now streaming video customers they’ll be paying $5 more to use the service starting in August.
“To continue delivering the best possible streaming experience for both new and existing customers, we’re bringing the cost of this service in line with the market—which starts at a $40 price point,” AT&T said in a statement to Cord Cutter News, which first reported the hike.
The problem: AT&T repeatedly claimed that the company’s merger with Time Warner would lower rates, not raise them.
Artificial Intelligence
- Oracle recently offered an artificial intelligent expert as much as $6 million in total pay as Silicon Valley’s talent war heats up
Oracle offered at least one candidate a $6 million package made up of salary and equity incentives to convince them to join the company, a source told Business Insider.
That candidate had other job offers but went with Oracle because of the higher pay, the source said.
https://nordic.businessinsider.com/oracle-artificial-intelligence-expert-pay-2018-7/
Cloud
- Google Cloud’s COO has left after less than a year
Before joining Google in late November 2017, Bryant spent more than 25 years at Intel, most recently leading its data center group. She took what was supposed to be a temporary leave from that role in May due to “family matters,” but ended up joining Google instead, under Cloud CEO Diane Greene.
Bryant’s hire was a win for the search giant’s cloud business, which is widely seen as No. 3 in the public cloud market, behind Amazon and Microsoft. As the relative newcomer in the space, Google Cloud’s challenge has been to prove its capabilities to large businesses, though Greene has said that there are no more “deal blockers” in the way of new contracts.
https://www.cnbc.com/2018/07/03/google-cloud-coo-diane-bryant-has-left-after-less-than-a-year.html
Security
- Australian National University ‘hit by Chinese hackers’
Networks at the Australian National University in Canberra, which is home to several defence-focused research units, were breached “months ago” by attackers whom authorities traced to China, said Channel Nine television and Fairfax Media websites, citing “multiple” unnamed security and intelligence sources.
Also
China has consistently and strongly denied being involved in any hacking attacks and its embassy in Australia, as well as the foreign ministry in Beijing, did not immediately respond to a request for comment.
The news comes as tension flares over new Australian laws that seek to curb foreign interference, measures the prime minister, Malcolm Turnbull, has said were adopted to allay concerns over Chinese influence in politics and universities.
Software/SaaS
- Micro Focus sells Suse for $2.5B
Suse, one of the longest-running commercial Linux distributors and, these days, a major player in the open-source infrastructure and management space, has been through a few ownership changes in recent years. Micro Focus acquired Suse from The Attachmate Group back in 2014, which itself had acquired Novell, the then-owner of Suse, in 2010. Today, Micro Focus announced that Suse is changing owners yet again, as private equity firm and venture capital fund EQT is acquiring Suse.
While the exact terms of the deal where not disclosed, EQT says the deal valued Suse at $2.535 billion.
https://techcrunch.com/2018/07/02/micro-focus-sells-suse-for-2-5b/
Datacenter/Hardware
- IBM lands $740M contract to provide IT services to Australian government
The main idea is to “prioritize the introduction of new technologies to citizen services,” Australia’s government said.
One of the programs involves IBM setting up a research team in Melbourne that will be tasked with studying potential applications for AI, blockchain and quantum computing in government. Additional research units will be based in Canberra and on the Gold Coast, working on new cybersecurity tools for data protection. They’ll also be looking into how supercomputers can be used to enhance government services.
This is important…
IBM’s contract award comes despite a couple of recent calamities relating to past services it provided for Australia’s government. They include failing to provide basic protection against a distributed denial-of-service attack that led to an outage during Australia’s online census in 2016, and a botched payroll system IBM installed for Queensland’s Department of Health for which the client was later blamed.
https://siliconangle.com/blog/2018/07/05/ibm-lands-740m-contract-provide-services/
Other
- How Google and Facebook Are Monopolizing Ideas
But as the companies come under growing pressure to police their platforms and weed out “fake news,” a growing range of content gets banned, labeled or deleted for often opaque or arbitrary reasons. ProPublica and Reveal, both nonprofit news publications, have had content dealing with hate groups and immigrant children, respectively, deleted or rejected by Instagram or Facebook. Video artists complain of viewership and ads being restricted because their content violated YouTube’s community standards.
Unhappy users, advertisers and content providers wouldn’t have as much to complain about if Google (which bought YouTube in 2006) and Facebook (which acquired Instagram in 2012) had strong competitors to which they could switch.
Photo by Teddy Kelley on Unsplash
News You Can Use: 7/4/2018
- Trump’s FCC Will Soon Vote to Axe Decades-Old Anti-Media Monopoly Rule
Traditionally these rules have broad, bipartisan support because they protect giant broadcasters from crushing smaller, regional competitors with an actual vested interest in the communities they serve. But much like the FCC’s attack on net neutrality, the Trump FCC has ignored nuance and the public interest in its quest to help giant corporations grow even larger.
For example, weeks before Sinclair even announced its merger, the FCC restored an outdated and unnecessary bit of 1980’s regulation known as the UHF Loophole, specifically to allow Sinclair to falsely under-state the company’s real reach. That move is currently facing a legal challenge by consumer groups, and the FCC is rushing to beat that court ruling to the punch.
Also:
Wood and other consumer advocates have been quick to point out the irony of Pai’s office, which routinely laments “outdated and unnecessary regulation,” re-imposing some outdated and unnecessary regulation simply to help Sinclair grow larger.
- Ford’s plan to turn Detroit’s oldest neighborhood into an electric, AV hub
Ford, which is celebrating its 115th anniversary this week, announced plans to house 2,500 Ford employees, most from its emerging mobility team, in its new Corktown campus by 2022. The new campus will have space to a accommodate 2,500 additional employees of partners and other businesses. The remaining 300,000 square feet will serve as a mix of community and retail space and residential housing.
The Corktown campus is where Ford will develop autonomous and electric vehicle businesses, as well as what CEO Jim Hackett describes as a new transportation operating system designed to make moving from Point A to Point B easier and accessible. The idea is for this transportation operating system to tie all forms of mobility together, including smart, connected vehicles, roads, parking and public transit.
https://www.engadget.com/2018/06/19/adobe-project-rush-video-editing-across-devices/
- How to stop politics from controlling your emotions
- The Future of Digital Marketing in a Data-Privacy World
That isn’t all. The rules for “third party” data also are getting more complicated. Many marketers don’t collect customer data themselves, so they use the information from other vendors, to help them target ads. Now they must make sure those vendors are in compliance with GDPR standards. Obviously, keeping an eye on all those third parties means a lot of effort and expense, so some marketers have said they would just use fewer vendors instead.
The problems of keeping track of customer data were highlighted in Facebook ’s Cambridge Analytica data leak, in which an outsider shared the social network’s user records with other firms. After an outcry over the leak, in March Facebook took steps that it said would “help improve people’s privacy.” Among them: ending a program that let brokers target specific groups of Facebook users on behalf of their advertiser clients.
- Pills By Amazon: The Retail Giant Just Bought The Online Pharmacy PillPack
“PillPack’s visionary team has a combination of deep pharmacy experience and a focus on technology,” Jeff Wilke, Amazon CEO Worldwide Consumer, said in a statement. “PillPack is meaningfully improving its customers’ lives, and we want to help them continue making it easy for people to save time, simplify their lives, and feel healthier.”
Photo by Bonnie Kittle on Unsplash
Supplier Report: 6/29/2018
Amazon’s desires to get into the healthcare industry made major progress this week with their announced acquisition of PillPack. It seems that the company will finally meet their goal of selling pharmaceuticals on their e-commerce engine.
IBM had a big sales announcement, but there were also reports of lack of strategic direction in their medical AI efforts.
The IT industry is still facing fallout over technological support of the DHS and ICE. As employees push back on their leaders, companies are scrambling to find a balance.
Acquisitions
- Amazon Buys Online Pharmacy PillPack for $1 Billion
Amazon.com Inc. is buying online pharmacy PillPack Inc. giving the e-commerce giant the ability to ship prescriptions around the country, and overnight, making it a direct threat to the more than $400 billion pharmacy business.
Amazon is paying roughly $1 billion in cash for PillPack, which presorts medications and ships them to customers’ homes in 49 U.S. states, excluding Hawaii, according to people familiar with the matter. The online retailer beat out Walmart Inc., which also was in talks for the five-year-old startup, one of the people said. Walmart had no immediate comment.
https://www.wsj.com/articles/amazon-to-buy-online-pharmacy-pillpack-1530191443
- Google admits it lost out to Microsoft buying GitHub
Previous rumors suggest Google was also trying to acquire GitHub, alongside Microsoft’s bids. GitHub founder Chris Wanstrath reportedly chose Microsoft because of his relationship with CEO Satya Nadella. GitHub is a large code repository that has become very popular with developers and companies to host projects, documentation, and code. Apple, Amazon, Facebook, Google, and many other big tech companies use GitHub. There are 85 million repositories hosted on GitHub, and 28 million developers contribute to them.
https://www.theverge.com/2018/6/28/17512908/google-github-microsoft-acquisition-comments
Artificial Intelligence
- Microsoft’s facial recognition can better identify people with darker skin tones
Microsoft says its facial recognition tools are getting better at identifying people with darker skin tones than before, according to a company blog post today. The error rates have been reduced by as much as 20 times for men and women with darker skin and by nine times for all women.
The company says it’s been training its AI tools with larger and more diverse datasets, which has led to the progress. “If we are training machine learning systems to mimic decisions made in a biased society, using data generated by that society, then those systems will necessarily reproduce its biases,” said Hanna Wallach, a Microsoft senior researcher, in the blog post.
https://www.theverge.com/2018/6/26/17507304/microsoft-facial-recognition-darker-skin-tones
- Layoffs at Watson Health Reveal IBM’s Problem with AI
IBM’s goal, the Phytel employees said, was to create a fancy new product that combined the capabilities of Phytel and Explorys. However, the offering managers didn’t have a clear idea of what that product would be. “They couldn’t decide on a roadmap,” says the second engineer. “We pivoted so many times.”
Both Phytel engineers say the offering managers didn’t have technical backgrounds and sometimes came up with ideas for new products that were simply impossible. While the engineers tried to follow the shifting directions from above, Phytel didn’t deliver anything new to the market. “And we were burning through money,” the second engineer says.
Cloud
- Here’s how Amazon is able to poach so many execs from Microsoft
In the three years between 2015 and 2017, at least 30 director or higher level executives went straight from Microsoft to Amazon. Google, the next most popular poaching ground for Amazon, lost just 5 executives to the e-commerce company during those three years. Apple and eBay both lost 2 executives to Amazon in that period, while Facebook, Walmart, and Netflix saw zero executives go to Amazon.
Paysa’s data only includes people whose most recent jobs were at Microsoft and excludes the ones who may have worked elsewhere before joining Amazon. The company said it looked through at least 5 million resumes for this data, but may have missed the ones that did not update their resume profiles.
https://www.cnbc.com/2018/06/25/amazon-favorite-poaching-ground-microsoft.html
Security
- A new data breach may have exposed personal information of almost every American adult
Earlier this month, security researcher Vinny Troia discovered that Exactis, a data broker based in Palm Coast, Florida, had exposed a database that contained close to 340 million individual records on a publicly accessible server. The haul comprises close to 2 terabytes of data that appears to include personal information on hundreds of millions of American adults, as well as millions of businesses. While the precise number of individuals included in the data isn’t clear—and the leak doesn’t seem to contain credit card information or Social Security numbers—it does go into minute detail for each individual listed, including phone numbers, home addresses, email addresses, and other highly personal characteristics for every name. The categories range from interests and habits to the number, age, and gender of the person’s children.
https://www.wired.com/story/exactis-database-leak-340-million-records/
Software/SaaS
- Salesforce Will Keep Ties to Border Agency After Protest
“I’m opposed to separating children from their families at the border. It is immoral,” Benioff wrote Wednesday in a memo to Salesforce employees obtained by Bloomberg News. “I have personally financially supported legal groups helping families at the border. I also wrote to the White House to encourage them to end this horrible situation.”
More than 650 Salesforce employees signed a letter to Benioff that called CBP’s actions “inhumane” and asked the San Francisco-based company to reconsider its contract providing tools to help with recruiting and communications. Some workers spoke Monday to Tony Prophet, the chief equality officer, about the letter, Bloomberg News reported. The staff’s effort is part of a growing wave of employee activism within the tech industry, as workers question how their products are used by U.S. law enforcement and the military.
Datacenter/Hardware
- IBM’s Competitive Advantage on Display in $320 Million Deal
IBM announced a $320 million infrastructure outsourcing deal with KMD, one of Denmark’s leading suppliers of mission-critical software and IT services. IBM will provide KMD with IT infrastructure through 2024, and will assist KMD as it upgrades its infrastructure offerings for its clients. The scope of the agreement includes security, hybrid cloud, and machine learning, all growth areas for IBM.
https://www.fool.com/investing/2018/06/28/ibms-competitive-advantage-on-display-in-320-milli.aspx
Other
- Amazon Workers to Jeff Bezos: Stop Weaponizing Our Tech
Gizmodo reports that Amazon employees are demanding that the company halt the sale of Rekognition, its facial-recognition technology, to law-enforcement agencies. “Along with much of the world we watched in horror recently as U.S. authorities tore children away from their parents,” reads an internal letter to Bezos, per Gizmodo. “In the face of this immoral U.S. policy, and the U.S.’s increasingly inhumane treatment of refugees and immigrants beyond this specific policy, we are deeply concerned that Amazon is implicated, providing infrastructure and services that enable ICE and D.H.S.”
https://www.vanityfair.com/news/2018/06/amazon-workers-to-jeff-bezos-stop-weaponizing-our-tech
Photo by Geran de Klerk on Unsplash