Supplier Report: 2/23/2018
Tesla and other battery-based companies are consuming so much cobalt that Apple is considering stockpiling it. The company wants to hedge against future price increases. Apple can use all that new Warren Buffett money to help pay for that stockpile (he shifted more money away from IBM and over to Apple).
Telsa also made news this week due to their AWS account being hacked and set up to mine for bitcoin (you can’t make this up).
Back in August, I dedicated a few podcasts on Google’s anti-competition loss in Europe. Bloomberg revisited the story to figure out who benefited from the ruling… as I mentioned in the podcast in August, it wasn’t small businesses.
Artificial Intelligence
- If you don’t like what IBM is pitching, blame Watson: It’s generating sales ‘solutions’ now
Internal documents seen by The Register reveal the tech goliath has developed something it calls “cognitive solutioning,” to be deployed when Big Blue is asked to do a job that can’t easily be scoped from its service catalogue.
“We’ve trained Watson on our standard solutions and offerings, plus all the prior solutions IBM has designed for large enterprises,” the corporate files state. “This means we can review a client’s RFP [request for proposal] and come up with a new proposed architecture and technical solution design for a state of the art system that can run enterprise businesses at scale.” Proposed solutions will be delivered “in minutes,” it is claimed.
https://www.theregister.co.uk/2018/02/16/ibm_watson_sales_pitches/
- IBM’s Watson Project Suffers Backlash from Overhype
The IBM Watson project is one example of an AI project that was over-hyped, a project that has tried to tackle too much too soon. IBM had early successes with AI. It’s Deep Blue and Watson technologies proved to be superior to humans in competitions like chess and the game show Jeopardy. IBM then announced that they were re-positioning Watson from a novelty to an AI project with the target of improving cancer care. Despite a big budget and significant positive press for the project, a recent analysis of the results from the Watson cancer project are underwhelming.
The investigation was made by STAT and found that “Perhaps the most stunning overreach is in the company’s claim that Watson for Oncology, through artificial intelligence, can sift through reams of data to generate new insights and identify, as an IBM sales rep put it, ‘even new approaches’ to cancer care… While Watson became a household name by winning the TV game show ‘Jeopardy!’, its programming is akin to a different game-playing machine: the Mechanical Turk, a chess-playing robot of the 1700s, which dazzled audiences but hid a secret — a human operator shielded inside. In the case of Watson for Oncology, those human operators are a couple dozen physicians at a single, though highly respected, U.S. hospital: Memorial Sloan Kettering Cancer Center in New York. Doctors there are empowered to input their own recommendations into Watson, even when the evidence supporting those recommendations is thin.”
http://formtek.com/blog/artificial-intelligence-ibms-watson-project-suffers-backlash-from-overhype/
Security
- Tesla’s Amazon cloud account was hacked and used to mine cryptocurrency
Tesla’s Amazon Web Services account was hacked to mine cryptocurrency, Fortune first reported. The hack, which was brought to Tesla’s attention by the cybersecurity startup RedLock, also reportedly exposed some of Tesla’s proprietary data related to mapping, telemetry, and vehicle servicing.
RedLock discovered the hack after it found an IT administrative console that didn’t have a password, but the company was unable to determine who initiated the hack or how much cryptocurrency was mined. According to Fortune, Tesla paid RedLock over $3,000 as part of its bug bounty program, which rewards people who find vulnerabilities in the company’s products or services that could be exploited by hackers.
http://www.businessinsider.com/hackers-teslas-amazon-cloud-to-mine-cryptocurrency-2018-2
Datacenter/Hardware
- Cisco Switches Back On
A major refresh of its switching products last summer helped lift the company’s overall revenue by nearly 3% year over year to $11.9 billion for the period ended Jan. 27. That was Cisco’s first quarter of growth after eight straight periods of declines. The applications and security segments each grew revenue by about 6% year over year.
Those results, along with a better-than-expected forecast, were good enough to boost Cisco’s share price by 6% in after-hours trading. Investors also are enthusiastic about the company’s cash hoard of $34 billion, net of debt, that could fuel future deals thanks to the recent tax overhaul. Cisco still has plenty of diversification ahead of it, but a revived core businesses should make the process less painful.
https://www.wsj.com/articles/cisco-switches-back-on-1518649676
- IBM vs Google vs Intel – The race to quantum computing
“Using… classical computers, it will take 3,000 years,” she says about a famous and burdensome encryption problem. To tackle the same problem, a quantum computer “could solve it in minutes.”
She lists the myriad of other applications quantum computers could optimise, such as complex physical modelling for climate, economics, and engineering fields, advanced chemical and material simulations, machine learning, and database searching.
“As a consequence,” she concludes, “there’s a massive international race to build a quantum computer.”
https://datacenternews.asia/story/ibm-vs-google-race-quantum-computing/
- Apple is trying to lock down battery components before electric carmakers get them
Apple is in talks to buy cobalt directly from miners to help shield it from any shortages sparked by the boom in electric cars, according to a report from Bloomberg. Cobalt is a key mineral used in lithium-ion batteries, and Bloomberg says that Apple is looking to secure contracts for several thousand metric tons of cobalt each year for five years or longer. Its first discussions for deals took place a year ago, but another source told Bloomberg that Apple might not even go ahead with the plans.
If Apple does end up buying cobalt directly, it will be in competition with car manufacturers and battery makers in locking up supplies of the raw material. Car giants like BMW and Volkswagen are also searching for multiyear deals to ensure they also have enough cobalt to meet targets in electric car production. Bloomberg reports that smartphone batteries use around eight grams of refined cobalt, but a battery for an electric car needs more than a thousand times that amount.
https://www.theverge.com/2018/2/21/17035264/apple-buy-direct-cobalt-miners-battery
Other
- Amazon’s Latest Ambition: To Be a Major Hospital Supplier
The market for medical supplies is one of a growing number of businesses the online retail giant has set in its sights, from groceries to clothing, often with market-moving results. Health-care distributor shares dropped Tuesday, in part from The Wall Street Journal’s report of Amazon’s intensified push into the industry, analysts said.
Amazon recently dispatched employees to a large Midwestern hospital system, where officials are testing whether they can use Amazon Business to order health supplies for the system’s roughly 150 outpatient facilities, according to a hospital official overseeing the efforts.
https://www.wsj.com/articles/amazons-latest-ambition-to-be-a-major-hospital-supplier-1518517802
- Warren Buffett doubles down on Apple, dumps nearly all of his IBM shares
Buffett’s investment firm, Berkshire Hathaway, ended the year with 165.33 million Apple shares, collectively worth some $27.6 billion based on yesterday’s closing price. Berkshire Hathaway is now Apple’s fourth-largest institutional investor. The firm began buying Apple stock in early 2016.
Meanwhile, Berkshire Hathaway sold off around 35 million shares of IBM in the fourth quarter, and entered 2018 with just 2.05 million shares. The firm began buying up IBM stock in 2011, and at one point held more than 80 million shares.
https://www.bizjournals.com/sanjose/news/2018/02/15/warren-buffett-aapl-ibm-teva.html
- Why Europe’s Google Rulings Don’t Benefit Consumers
Reporters for Politico have discovered that FairSearch, the non-profit group that filed the Android complaint in 2013, is under the full legal control of two giant companies: U.S.-based Oracle and South Africa-based Naspers, which owns shares in China’s Tencent and Russia’s Mail.ru. At the time the complaint was filed, Microsoft was also part of the effort, but it left FairSearch in 2015. Other companies that have been mentioned as FairSearch members are so-called adherent members without voting rights who “do not participate actively in the achievement of the association’s goals.”
This makes sense on a certain level: The small firms don’t have the deep pockets to hire expensive lawyers and PR consultants (FairSearch is working with elite firms Clifford Chance and Burson Marsteller). FairSearch has rejected Politico’s findings as immaterial, and some of its “adherent members” have backed this stance. But the implication is clear: If, at the end, it all comes down to Oracle’s and Naspers’s desire to keep Google in check, Google may end up punished but consumers and smaller companies won’t get much out of it.
Photo:Maria Badasian
Supplier Report: 2/16/2018
Moves are being made this week! Both Oracle and Google (along with Roche and OpenText) announced acquisitions. If you pair that with comments made by Oracle CEO Mark Hurd about the economy, it seems that the M&A drought is subsiding.
Equifax, the company that allowed hackers to gain access to all of the information needed to open a line of credit in your name, announced that hackers probably got even MORE information that initially reported. News also came out this week that the Consumer Financial Protection Bureau has stopped investigations into the breach.
Amazon is going after UPS and Fedex and also reducing their workforce in certain areas (while increasing headcount in their Alexa and AI departments).
Acquisitions
- Roche to Acquire Healthcare-Software Company Flatiron for $1.9 Billion
Pharmaceuticals firm Roche Holding AG RHHBY 1.16% has agreed to buy the shares it doesn’t already own of Flatiron Health Inc., an oncology software company, for $1.9 billion, the companies said Thursday.
Switzerland-based Roche said the deal is part of an effort to accelerate its development and delivery of medicines for cancer patients. Roche already owns 12.6% of New York City-based Flatiron Health, which was launched in 2012.
- Google to acquire Xively IoT platform from LogMeIn for $50M
Google announced today that it intends to buy Xively from LogMeIn for $50 million, giving Google Cloud an established IoT platform to add to their product portfolio.
In a blog post announcing the acquisition, Google indicated it wants to use this purchase as a springboard into the growing IoT market, which it believes will reach 20 billion connected things by 2020. With Xively they are getting a tool that enables device designers to build connectivity directly into the design process while providing a cloud-mobile connection between the end user app and the connected thing, whatever that happens to be.
https://techcrunch.com/2018/02/15/google-to-acquire-xively-iot-platform-from-logmein/
- Oracle acquires cloud security startup Zenedge
Oracle announced today that it reached an agreement to acquire Zenedge, a company that provides firewalls and denial-of-service mitigation to enterprises.
The deal is part of Oracle’s overall work to build out its cloud platform, providing customers with security features for their applications that help them stay secure and running in a hostile web environment. Zenedge fits in with the company’s previous acquisition of Dyn, a domain name system (DNS) provider that helps determine how traffic gets directed between different applications.
https://venturebeat.com/2018/02/15/oracle-acquires-cloud-security-startup-zenedge/
- Consolidation in the cloud as OpenText buys Hightail and Carbonite grabs Mozy from Dell
Mark J. Barrenechea, who holds several titles at OpenText including vice chairman, CEO and CTO, says the addition of Hightail helps them meet yet another content management use case. “The acquisition of Hightail underscores our commitment to delivering differentiated content solutions in the cloud that enable marketers and creative professionals to share, produce, and securely collaborate on digital content,” Barrenechea said in a statement.
This could allow them to compete with Adobe, at least on the file sharing side. Adobe has a big stake in the creative market and providing solutions for creating and sharing the large files they produce.
Today’s acquisition comes on the heels of the sale of another early cloud company when Dell sold Mozy to Carbonite yesterday for $145 million. Mozy, a cloud backup service, which launched in 2005, was sold to EMC in 2007 for $76 million. You may recall that Dell purchased EMC in Oct 2015 for $67 billion. That deal closed in September 2016.
- Equinix acquires Infomart Dallas hub for $800m
Equinix, which was recently listed as the top data centre operator in the world by Cloudscene’s latest leaderboard rankings, will benefit greatly from the acquisition of the 1.6 million gross sq ft landmark facility. The highly interconnected hub will further strengthen Equinix’s global platform.
The Dallas metro represents one of the largest enterprise and colocation markets in the Americas and the eight Equinix IBX data centres house more than 100 network service providers—more than any other data centre provider in the Dallas metro area.
http://www.capacitymedia.com/Article/3787932/Equinix-acquires-Infomart-Dallas-hub-for-800m
Cloud
- LinkedIn still hasn’t moved to Azure, continues to run its own data centers
However, despite Microsoft owning LinkedIn, the company has no obligation to adopt Azure, a pattern seen before. Last year, Amazon acquired Whole Foods in a $13.7 billion deal, and the company made no public announcement of adopting AWS. At the time of acquisition, Whole Foods ran on Azure.
Still, Microsoft is the “preferred” cloud vendor for some heavyweight companies including Adobe and Columbia Sportswear. However, if companies don’t adopt Azure, Microsoft often boasts enterprise customers through its SaaS solutions.
- Oracle to Launch 12 Cloud Data Centers Around the World
Oracle announced Monday a plan to add 12 locations to the list of availability regions hosting its new enterprise cloud platform. Today, the platform is hosted in two locations in the US and one in Europe.
Most of the expansion will be in Asia, where the new platform, launched in 2016, currently has no physical presence. Oracle’s plan includes new cloud data centers in China, India, Japan, Singapore, and South Korea. (It’s expanding in China in partnership with Tencent, according to The Wall Street Journal.)
Oracle is also adding data centers in Europe (Amsterdam and Switzerland), where the platform is currently hosted in Frankfurt, with an upcoming London region.
http://www.datacenterknowledge.com/oracle/oracle-launch-12-cloud-data-centers-around-world
Security
- Apple intern reportedly leaked iPhone source code
According to Motherboard, the intern who stole the code took it and distributed it to a small group of five friends in the iOS jailbreaking community in order to help them with their ongoing efforts to circumvent Apple’s locked down mobile operating system. The former employee apparently took “all sorts of Apple internal tools and whatnot,” according to one of the individuals who had originally received the code, including additional source code that was apparently not included in the initial leak.
The plan was originally to make sure that the code never left the initial circle of five friends, but apparently the code spread beyond the original group sometime last year. Eventually, the code was then posted in a Discord chat group, and was shared to Reddit roughly four months ago (although that post was apparently removed by a moderation bot automatically).
- Equifax breach may have exposed more data than first thought
The 2017 Equifax data breach was already extremely serious by itself, but there are hints it was somehow worse. CNN has learned that Equifax told the US Senate Banking Committee that more data may have been exposed than initially determined. The hack may have compromised more driver’s license info, such as the issuing data and host state, as well as tax IDs. In theory, it would be that much easier for intruders to commit fraud.
https://www.engadget.com/2018/02/10/equifax-breach-may-have-exposed-more-data/
32 senators want to know if US regulators halted Equifax probeEarlier this week, a Reuters report suggested that the Consumer Financial Protection Bureau (CFPB) had halted its investigation into last year’s massive Equifax data breach. Reuters sources said that even basic steps expected in such a probe hadn’t been taken and efforts had stalled since Mick Mulvaney took over as head of the CFPB late last year. Now, 31 Democratic senators and one Independent have written a letter to Mulvaney asking if that is indeed the case and if so, why.
Reuters sources said that Mulvaney has neither ordered subpoenas against Equifax nor collected any sworn testimony from company executives. Additionally, reviews of how Equifax protects its data and on-site cybersecurity exams of other credit bureaus — which the Federal Reserve, Federal Deposit Insurance Corp and Office of the Comptroller of the Currency all offered to assist with — have been put on hold. The bank regulators who had offered to help were reportedly told that there were no exams planned and their assistance wouldn’t be needed.
https://www.engadget.com/2018/02/08/senators-ask-if-us-regulators-halted-equifax-probe/
- Consumers prefer security over convenience for the first time ever, IBM Security report finds
“We always talk about the ease of use, and not impacting user experience, etc, but it turns out that when it comes to their financial accounts…people actually would go the extra mile and will use extra security,” Kessem said. Whether it’s using two factor authentication, an SMS message on top of their password, or any other additional step for extra protection, people still want to use it. Some 74% of respondents said that they would use extra security when it comes to those accounts, she said.
https://www.techrepublic.com/article/ibm-security-report-security-now-outweighs-convenience/
- ‘BuckHacker’ Search Engine Lets You Easily Dig Through Exposed Amazon Servers
Digging through S3 buckets certainly isn’t new. Chris Vickery, director of cyber risk research at security firm UpGuard, has cornered something of a niche for himself by regularly finding noteworthy datasets in exposed buckets. According to research published in September 2017, some 7 percent of S3 servers may be exposed.
And tools already exist for quickly grinding through leaky Amazon servers: ‘AWSBucketDump’ “is a tool to quickly enumerate AWS S3 buckets to look for loot,” the project’s Github page reads. As the BuckHacker administrator pointed out, you can also find some exposed buckets with a specific Google search.
BuckHacker doesn’t only return results for exposed servers. It also includes entries labelled as “Access Denied”, and “The specified bucket does not exist,” meaning, obviously, you can’t simply go access whatever data they contain. But it may still be useful for scoping out whether a target is using S3 at all.
https://motherboard.vice.com/en_us/article/j5bgm3/buckhacke-amazon-server-search-engine-aws-security
- Don’t use Huawei phones, say heads of FBI, CIA, and NSA
During his testimony, FBI Director Chris Wray said the government was “deeply concerned about the risks of allowing any company or entity that is beholden to foreign governments that don’t share our values to gain positions of power inside our telecommunications networks.” He added that this would provide “the capacity to maliciously modify or steal information. And it provides the capacity to conduct undetected espionage.”
These warnings are nothing new. The US intelligence community has long been wary of Huawei, which was founded by a former engineer in China’s People’s Liberation Army and has been described by US politicians as “effectively an arm of the Chinese government.” This caution led to a ban on Huawei bidding for US government contracts in 2014, and it’s now causing problems for the company’s push into consumer electronics.
https://www.theverge.com/2018/2/14/17011246/huawei-phones-safe-us-intelligence-chief-fears
Datacenter/Hardware
- One Man’s Quest to Make Google’s Gadgets Great
Google could no longer afford to make ho-hum gadgets. Alphabet, its parent company, had become the world’s second-largest corporation by building software that worked for everyone, everywhere, delivered through apps and websites. But the nature of computing is changing, and its next phase won’t revolve around app stores and smartphones. It will center instead on artificially intelligent devices that fit seamlessly into their owners’ everyday lives. It will feature voice assistants, simple wearables, smart appliances in homes, and augmented-reality gadgets on your face and in your brain.
In other words, the future involves a whole lot more hardware, and for Google that shift represents an existential threat. Users won’t go to Google.com to search for things; they’ll just ask their Echo because it’s within earshot, and they won’t care what algorithms it uses to answer the question. Or they’ll use Siri, because it’s right there in a button on their iPhone. Google needed to figure out, once and for all, how to compete with the beautiful gadgets made by Amazon, Apple, and everyone else in tech. Especially the ones coming out of Cupertino.
https://www.wired.com/story/one-mans-quest-to-make-googles-gadgets-great/
Other
- Amazon to Launch Delivery Service That Would Vie With FedEx, UPS
Amazon expects to roll out the delivery service in Los Angeles in coming weeks with third-party merchants that sell goods via its website, according to the people. Amazon then aims to expand the service to more cities as soon as this year, some of the people say.
While the program is being piloted with the company’s third-party sellers, it is envisioned as eventually accommodating other businesses as well, according to some of the people. Amazon is planning to undercut UPS and FedEx on pricing, although the exact rate structure is still unclear, these people said.
- Amazon is cutting hundreds of employees to shift resources to fast-growing businesses
The Seattle Times first reported that Amazon was laying off “hundreds” of employees and “managing out” others as the company consolidates its retail operations.
A person familiar with the matter says the cuts are focused on Amazon’s Seattle headquarters and will affect some workers globally. The layoffs will occur in the consumer retail business, a unit that includes Amazon’s toys, books and groceries units, to make room for head count in businesses that are growing, like Alexa, AWS and digital entertainment. Jeff Bezos, in a statement in the last earnings report, said Amazon would “double down” on Alexa after blowing past projections.
https://www.cnbc.com/2018/02/12/amazon-laying-off-hundreds–report.html
- Oracle CEO Mark Hurd Says Corporate IT Spending Set to Jump
“People have not invested in IT for a decade, so we have old stuff out there,” Mr. Hurd told senior corporate technology managers Monday at the company’s CloudWorld event in New York.
Mr. Hurd said most companies have shied away from spending as U.S. economic growth hovered below 3% in recent years: “If the market is only growing at 2%, that means your business is only going to grow 2%,” he said.
Business spending on IT has been flat “because GDP is flat,” he said, referring to gross domestic product, a broad measure of economic growth. To hedge against lackluster growth, companies have cut IT budgets to improve cash flow, while funneling costs into managing the increasing risk of cyber attacks, breaches and other risks, he said.
https://blogs.wsj.com/cio/2018/02/12/oracle-ceo-mark-hurd-says-corporate-it-spending-set-to-jump/
- Cisco to Bring $67 Billion to U.S. After New Tax Law
The networking-gear maker said Wednesday it would repatriate $67 billion of its foreign cash holdings to the U.S. this quarter, in one of the largest repatriation plans yet revealed.
Cisco plans to spend much of the newly repatriated cash on share buybacks and dividends, it said Wednesday while reporting earnings, amounting to about $44 billion over the next two years.
https://www.wsj.com/articles/cisco-returns-to-growth-after-two-year-sales-slump-1518645580
Photo: Anastasia Yılmaz