SourceCast: Episode 34: The M&A Menace Continues
Supplier Report: 7/23/2016
IBM had another down quarter but is reporting 30% growth in cloud and their “critical initiatives”, while they are growing the future of Big Blue, are they turning friends into enemies? What does IBM and Microsoft’s deal for their Surface devices means for Apple in the long run?
Salesforce purchased a datacenter analytics company while there are rumors that Oracle might buy cloud computing company Netsuite.
HPE failed to get an Oracle lawsuit dismissed and also seems to be failing to pay their sales teams.
Can Google use AI to cut datacenter energy costs by 40%? (Yes… with a big BUT)
IBM
- IBM grows in cloud and data analytics but overall revenue slides
The Armonk, New York, company said Monday that revenue from its new “strategic imperatives” like cloud, analytics and security increased by 12 percent year-on-year to US$8.3 billion. That increase was, however, lower than the growth the company had reported in these businesses in the first quarter.
Cloud revenue – public, private and hybrid – grew 30 percent in the second quarter, while revenue from analytics grew 4 percent, revenue from mobile increased 43 percent and the security business grew 18 percent.
Additionally:
IBM’s systems revenue, for example, was down 23 percent in the quarter to $2 billion, while its Global Business Services, including consulting, global process services and application management, brought in revenue of $4.3 billion, down 3.0 percent from a year earlier. Revenue for the company’s z Systems mainframes was down 40 percent in the quarter while margins improved, “consistent with where we are in the product cycle.” Schroeter said. IBM acquired EZSource in the quarter to help developers quickly and easily update mainframe applications.
- IBM: A Hodgepodge Going Nowhere
I’m going to pick on Truven here because I’m a bit familiar with the company from the past. Truven basically owns a bunch of data on patients and licenses it out to companies so they can try and analyze it. IBM’s plan is to essentially plug all that data into Watson and hope it can come up with some clever insights to better treat patients. But is it really worth $2.6 billion? While IBM could certainly be onto something with all its healthcare-related acquisitions, since the industry is ripe for reform, chances are probably just as high that the company is acquiring as much as it can in the hopes that something turns into a homerun.
My friends at Seeking Alpha really don’t like IBM (even when there is positive news).
http://seekingalpha.com/article/3989255-ibm-hodgepodge-going-nowhere
Also from SA: IBM May Not Be A Hopeless Disaster After AllIn the past, I’ve stated repeatedly that IBM was too far away from growing its imperatives revenue quickly enough to make up for the losses in its legacy businesses but it seems that is no longer the case. What started as a small proportion of revenue is now a significant piece of the business and at the rate it is growing, IBM could potentially see top line growth in the relatively near future if it can stop the hemorrhaging elsewhere. Can it do that? Maybe; we’ll just have to wait and see. But at least the conversation can happen now whereas that was certainly not the case in the relatively recent past.
http://seekingalpha.com/article/3989381-ibm-may-hopeless-disaster
- CSC and IBM Expand Strategic Alliance with Collaboration Utilizing IBM Cloud for z to Enable Clients’ Move to Cloud
CSC and IBM today announced a collaboration in which IBM will provide its Cloud Managed Services for z Systems — IBM Cloud for z — and associated mainframe hardware, software, monitoring and governance support to CSC clients who are moving to the cloud and want a more secure, scalable, flexible information technology infrastructure at significantly reduced operational costs.
The expanded alliance further advances CSC’s vision of the “Service-Enabled Enterprise” and IBM’s “as-a-service” strategy, both designed to increase client choice and innovation in adopting emerging technologies. The as-a-service strategy provides consumption-based pricing for the IBM z Systems environment to give clients’ greater capital investment flexibility.
So… IBM cuts their consulting force, CSC merges with HPE’s, and now there is this “collaboration”. Interesting.
http://www.prnewswire.com/news-releases/csc-and-ibm-expand-strategic-alliance-with-collaboration-utilizing-ibm-cloud-for-z-to-enable-clients-move-to-cloud-300300377.html - IBM Watson Wants to Be Your New Salesperson at Macy’s
Customers can type in questions, and Macy’s On Call will return the top answer for that question along with location-specific details. For example, a customer could type, “Where are the ladies shoes?” or ask to find a specific brand of a dress, and the assistant will inform the shopper as to where the shoes are located in the store and where the exact dress is located.
Hewlett Packard Enterprise | HP Inc
- Meg Whitman is scrambling to fix a ‘nightmare’ glitch that affected thousands of her salespeople
Thousands of members of the salesforce have not been properly paid since Hewlett Packard split itself apart the previous November, they tell her. That’s six months of wacky pay. It’s gotten so bad that some salespeople couldn’t make their mortgages and were facing foreclosure. Others were behind in their alimony payments.
Oracle
- Oracle could be about to buy NetSuite
Oracle Corporation (NYSE:ORCL) is on the brink of announcing its buyout of cloud computing rival NetSuite Inc (NYSE:N), according to unconfirmed market rumors on Thursday.
Gossips reckoned NetSuite has delayed publication of financial results due this week until next week because the pair want to unveil the deal beforehand.
- Oracle Wins Round in Copyright Suit With HPE
U.S. District Judge Jon Tigar on Friday largely denied HPE’s motion to dismiss the suit, which accuses the company of participating in a scheme to use pilfered intellectual property to win customer-service contracts away. Friday’s decision was filed under seal, but at a Thursday afternoon hearing Tigar outlined his tentative ruling. He indicated he would partially dismiss Oracle’s claim under California’s unfair competition law but allow the core copyright claims to proceed.
Oracle sued HPE in March, accusing its rival of pairing with Terix Computer Co. Inc. to sell hardware and software support services for Oracle’s Sun-branded computers running the Solaris operating system. Oracle’s lawyers, led by Christopher Yates of Latham & Watkins, have alleged that HPE officials knew Terix illegally used Oracle customer credentials to access copyrighted Solaris updates for servers. Oracle claims that only servers covered by valid Oracle support contracts had a license to the updates.
- Exclusive: Oracle to reboot Java EE for the cloud
Rumored to have put the project on the back burner, Oracle has weathered a storm of complaints over its stewardship of enterprise Java, with two separate organizations considering plans to move Java EE forward without Oracle. Rather than let Java EE wither, Oracle is instead looking to reboot the platform to better accommodate where enterprises are headed, particularly to the cloud, said a high-ranking Oracle official in response to recent criticism.
http://www.infoworld.com/article/3098007/java/oracle-to-reboot-java-ee-for-the-cloud.html
Storage (EMC | Dell )
- EMC Exec: No Competition Between Dell-Nutanix Appliance And EMC Hyper-Convergence Portfolio
“If I buy into the [EMC] ‘blocks, racks and rails’ story, it’s not really competitive against Nutanix,” Miller said. The Nutanix-based Dell XC appliance, “is for a smaller play, or someone who hasn’t completely bought into [the hyper-convergence] methodology,” he said.
- EMC, Dell merger approved by shareholders in 98% vote
From Joe Tucci, EMC Chairman and CEO: “Today’s resoundingly favorable shareholder vote clearly supports our view that combining Dell and EMC will create a powerhouse in the technology industry. The Board and I care very deeply about, and have worked diligently to represent, what we believe is the best outcome for all stakeholders. I want to thank our shareholders for their support, as well as our customers and partners. My special thanks to the talented people of EMC for their hard work, dedication and passion.”
http://seekingalpha.com/news/3194069-emc-dell-merger-approved-shareholders-98-percent-vote
Microsoft
- What will it take to turn Microsoft back to growth?
Wall Street analysts on average expect the tech giant to post fiscal fourth-quarter revenue of $22.14 billion on earnings per share of 58 cents, according to a Thomson Reuters survey of 23 analyst estimates. This would mark the smallest year-over-year drop in quarterly revenue since the fourth quarter of last year.
Overall, revenue is expected to decline 2 percent for fiscal 2016, but the company is headed in the right direction: Revenue growth is expected to return next quarter. Analysts project Microsoft to report 2 percent growth in the September quarter and 4 percent growth for fiscal 2017.
http://www.cnbc.com/2016/07/18/what-it-will-take-for-microsoft-to-return-to-growth.html
Other
- Salesforce Takes Measures Against Google Android Fragmentation-Related Issues
Salesforce announced on its official support page that it will only support Google Nexus and Samsung Galaxy devices. The firm released a statement saying that the decision to support a limited number of devices regardless of the many Android devices on the market was so that it can improve its services on the devices supported. This will allow Android users on supported devices to have a better user experience.
- Google unleashes DeepMind on energy-hungry datacenter, cutting cooling bill by 40 percent
We accomplished this by taking the historical data that had already been collected by thousands of sensors within the data centre — data such as temperatures, power, pump speeds, setpoints, etc. — and using it to train an ensemble of deep neural networks. Since our objective was to improve data centre energy efficiency, we trained the neural networks on the average future PUE (Power Usage Effectiveness), which is defined as the ratio of the total building energy usage to the IT energy usage. We then trained two additional ensembles of deep neural networks to predict the future temperature and pressure of the data centre over the next hour. The purpose of these predictions is to simulate the recommended actions from the PUE model, to ensure that we do not go beyond any operating constraints.
- Microsoft, IBM and SAP’s Impressive Cloud Numbers Don’t Tell the Whole Story
Moreover, a shift from on-premise to cloud revenue streams is pressuring the margins of many firms, as hosting cloud apps and services brings with it expenses that don’t exist with regular software sales. While Microsoft’s revenue rose 2% in the June quarter, the company’s cost of revenue rose 7%, with cloud and search ad expense growth more than offsetting the impact of plunging phone sales. Meanwhile, IBM’s gross margin fell 190 basis points in the second quarter to 49%.
- Should Apple worry about Microsoft-IBM deal?
Apple’s role in the enterprise has been and, for the foreseeable future, will be anchored to workers and consumers, not big businesses, says Aaron Gette, CIO of Bay Club, a lifestyle and fitness company. “Microsoft might not be first to market, but they come prepared and well versed,” he says. “Microsoft’s Azure is beginning to win in the enterprise cloud marketplace, so the role of IBM’s ability to deliver apps to the Surface users in the enterprise is a great play.”
http://www.cio.com/article/3098267/it-industry/should-apple-worry-about-microsoft-ibm-deal.html
- Salesforce acquires crowd-sourced data analytics solution Coolan
Coolan is a data analytics platform that monitors the performance of data centers, that helps predict server failure, reduce downtime, and lower the cost of infrastructure. Their cloud analytics platform is aimed at predicting the flaws in a data center and helping the hardware community build a reliable and efficient infrastructure.
http://thetechportal.com/2016/07/22/salesforce-acquires-coolan/
Why Salesforce Is Buying This Little-Known Startup“If you’re a company buying, say 100 Dell servers this year, and another 100 in six months and another 100 next year, you really don’t know what the components in all those servers are,” said a source close to Coolan, who requested anonymity because he is not authorized to speak on the deal. “Some may have Western Digital hard drives, others may have Seagate, some server lots will have memory from this supplier, others from someone else. Coolan goes in and tells you what all those components are, how they all perform over time and what their failure rates are.”
http://fortune.com/2016/07/22/salesforce-coolan-data-centers/
Photo: Nicolas Cool
SourceCast: Episode 32: The Cloud Wars
Supplier Report: 7/16/2016
The fight between Google, Microsoft, and AWS (with IBM and Oracle fighting for scraps) is the major news trend of the week.
Microsoft announced a partnership with GE that will introduce their Predix IoT engine into the Azure cloud. Meanwhile, Google’s Diane Greene says Google can beat AWS and Microsoft in almost any RFP because they know cloud the best. Amazon said the origins of their cloud infrastructure was a reaction to legacy IT providers “not caring”, especially once the sale was inked.
While cloud was a major topic, HPE once again is making headlines for exploring the possibility of selling off some of their enterprise software (seriously… this again?).
IBM
- Inside IBM’s New App-Building Training Ground
While the New York garage is similar to the others IBM has in cities like Toronto, San Francisco, and London, IBM is specifically making an open pitch to blockchain developers. Blockchain is a technology made famous by bitcoin, which has a public digital ledger for every transaction performed that can be shared among a distributed network. Many companies are tinkering with blockchain because it could change the way digital transactions are performed. IBM says this is because it sees an increased need for training and leadership when it comes to this burgeoning technology. Financial services—along with multiple other industries—are trying to figure out ways they can use this new system (which was introduced to the world thanks to bitcoin), and implement it into their system. Many New York-based companies are trying to figure out what they can do. While there’s a blockchain focus in the New York garage, the space isn’t exclusively for that technology.
http://www.fastcompany.com/3061668/the-future-of-work/inside-ibms-new-app-building-training-ground
- OpenText CEO Takes Aim at IBM Watson #OTEW
“Our path on software is pure openness: open standards and open algorithms,” Barrenechea said. “IBM’s platform is closed. Our hardware is built open standard x86. You can chose your vendor, and you can choose your design. With IBM Watson, it’s closed. You use the Watson mainframe when you’re there.”
http://www.cmswire.com/information-management/opentext-ceo-takes-aim-at-ibm-watson-otew/
IBM Responds:Reached by CMSWire after Barrenechea’s comments, IBM Watson Chief Technology Officer Rob High said the cognitive APIs and services on the Watson platform are available to any developer who wants to build a Watson application.
“These APIs are available to the public on our Watson Developer Cloud,” he said, “but we’re expanding to other platforms as well.”
- Microsoft and IBM in a deal to push Surface devices to enterprises
I wonder how IBM’s buddies at Apple feel about this… not well I imagine.For IBM, the deal is much like the one it struck with Apple in 2014 to develop apps for iPhones and iPads. IBM will acquire more enterprise software customers, and it won’t have to worry about supporting the hardware.
The IBM custom software will take advantage of unique Surface features, Microsoft said. The applications will revolve around analytics, reporting, employee productivity, management and forecasting.
Microsoft
- Microsoft wins landmark data storage case
A unanimous decision from the Second Circuit Court of Appeals ruled that Microsoft did not have to turn over documents from an email account stored in an Irish data center despite a 2013 warrant.
“We have little trouble concluding that execution of the Warrant would constitute an unlawful extraterritorial application of [the U.S. authority],” wrote Circuit Judge Susan L. Carney in the official opinion.
http://thehill.com/policy/cybersecurity/287763-microsoft-wins-landmark-data-storage-case
- Yes, Windows 10 subscriptions are coming, at least for enterprise
Beginning this fall, Microsoft will offer Windows 10 Enterprise E3, a special enterprise tier of Windows 10 that will cost $7 per user per month. Yusuf Mehdi, the corporate vice president of the Windows and Devices Group at Microsoft, said cloud providers would now be able to offer three premier Microsoft services on a subscription basis: Microsoft’s Azure, Office 365, and now Windows 10.
“For the price of a cup of coffee and a donut per day, you can get enterprise-class security on a per-user subscription basis,” Mehdi said onstage at Microsoft’s Worldwide Partner Conference in Toronto, Canada. “If you’re a cloud provider, this is now phenomenal.”
I love the “cup of coffee” line… it is a total diversion tactic.
http://www.pcworld.com/article/3094785/windows/yes-windows-10-subscriptions-are-coming-at-least-for-enterprise.html - Instant Analysis: GE Brings Its Predix Industrial Software to Microsoft’s Cloud
Predix is one of GE’s major investments in the Internet of Things, and it allows companies to manage and analyze industrial equipment (jet engines, factory machines, etc.) to improve their efficiency and reduce downtime.
“Bringing Predix to Azure means those same customers will now have access to additional capabilities such as natural language technology, artificial intelligence, advanced data visualization and enterprise application integration,” Microsoft and GE said in a press release.
The companies said Predix will also be integrated with Microsoft’s Azure IoT Suite, Cortana Intelligence Suite, Office 365, and other services, so that Predix customers can access industrial data in their business software.
- Kevin Turner’s departure from Microsoft generates cries of happiness from employees
Microsoft’s Executive Vice President for its Windows and Devices group also received negative opinions from some of its employees. Over 60% of the employees believe Turner was fired, although that wasn’t the case, and a mini-poll shows that 93 out of 95 of them felt “crazy happy” about this. Only two seemed to feel “crying sad”. Turner was known for being pretty rough, similar to ex-CEO Steve Ballmer, who was also known for being quick to throw anger around, especially as Turner was brought in whilst Ballmer was at the throne.
Hewlett Packard Enterprise | HP Inc
- HPE Is Said to Consider Selling Some of Its Software Assets
The divestitures would come from a portfolio of acquisitions made over roughly the last decade, including Autonomy, Mercury Interactive and Vertica Systems, said the people, who asked not to be identified because the matter is private. A sale process is in the preliminary stages and may not result in any deals, the people said.
http://www.bloomberg.com/news/articles/2016-07-08/hewlett-packard-enterprise-said-to-mull-selling-software-assets
HPE reportedly plans to flog Autonomy in bid to reduce mounting debtThe first annual report of the new company following the demerger of the HP Inc PCs and printers business indicated that HPE would focus software on big data analytics and applications, enterprise security, application testing and delivery management, and IT operations management solutions.
Oracle
- Oracle’s $9B Lawsuit with Google Sees New Development
Per media reports, last Wednesday Oracle appealed to the San Francisco U.S. District Court to reconsider the verdict. The filing stated that “Google’s financial rewards are as ‘conspicuous’ as they come, and unprecedented in the case law.” Oracle claims that Google has gained over $42 billion from Android powered by its Java APIs and therefore demanded a share of its profit.
However, Google had earlier defended itself saying that the Java code was free and open and there have been no copyright infringements. In fact, Google’s stance was also supported by a majority of the Java programming community (including most of Silicon Valley) which believed that a decision in Oracle’s favor could prove detrimental to innovation as programmers use open source APIs across various interfaces for developing codes.
http://finance.yahoo.com/news/oracles-9b-lawsuit-google-sees-150603905.html
Storage (EMC | Dell )
- John Byrne becomes president of Dell and EMC unified global channel
John Byrne an ex Advanced 3D, ATI, AMD executive has just got promoted again at Dell. He is now president of the Dell and EMC global channel. Mike Magee and Fudo have known John Byrne for close to two decades, but now is not the time for kiss and tell.
This is a huge success for Byrne who started at Dell as global vice president of Sales Strategy and Operations in July 2015, then got promoted to be global vice president of Sales Strategy, Operations and Channels at Dell in October.
http://www.fudzilla.com/news/41103-john-byrne-is-president-dell-and-emc-global-channel
Other
- AWS says tech legacy vendors ‘don’t care’ about enterprise customers
In contrast, he accused legacy IT vendors of “extortionist techniques” to hit that revenue, saying: “They forced you to pay upfront even if you are not going to use [what you buy].”
Amazon went on to reference a stream of enterprise customers using its software, after UK MD, Gavin Jackson, recognised that many in the audience were not serious AWS users, but people interested in hearing more of what the company has to offer their businesses.
While AWS claims to have more than one million customers worldwide, and the largest number of start-ups (including behemoths like Spotify and Netflix) on its books, it wants more enterprise customers to start using its platform.
- Google cloud boss Diane Greene: We’re winning against AWS and Microsoft
“We can actually win an RFP pretty much every time against AWS or Azure. Our growth is great,” Greene told attendees of the Fortune Brainstorm Tech show in Aspen, Colorado on Monday.
“We have the best infrastructure, our own network backbone, our own fiber, a very cost-effective data centers, very automated.”
http://www.businessinsider.com/google-cloud-boss-on-aws-and-microsoft-2016-7
- Why Teradata Corporation Fell 11.5% in June
Plenty of stocks plunged on the outcome of the Brexit vote, but Teradata suffered more than most. The U.K. has been a solid growth market for Teradata’s data and analytics products in recent quarters, so the prospect of slower orders from that hamstrung economy can be scary to Teradata investors.
Then, analyst firm CLSA posted a report, explaining that a low-cost bulk storage product known as Amazon Redshift is growing much faster than its traditional rivals. The data warehousing package more than tripled its revenue in 2015 while Teradata and other traditional providers posted shrinking sales.
That one-two punch lowered Teradata shares more than 14% in just two days.
Photo: Joshua Ness
SourceCast: Episode 31: Collaboration Crisis
