SourceCast: Episode 17: You Should Have Known Better
Supplier Report: 2/27/2016
IBM is making friends again. During their InterConnect conference, they announced a new partnership with VMWare, introducing their products on IBM’s cloud services. They also renewed their partnership with Apple, helping the company make progress towards enterprise customers.
Dell is making progress on their acquisition of EMC. The FTC finally approved the merger and the banks lending Dell the money are shopping around portions of the loans (which is seen as a good sign).
HP Inc had a very bad week. PC sales are down over 10% (blaming Windows 10), the stock is down, and they announced an additional 1800 job eliminations.
IBM
- IBM makes major strategic alliance with VMware
VMware and IBM have had a reseller agreement in place until now, with today’s announcement being the first strategic partnership between the two technology firms. It marries together the infrastructure management capabilities of VMware’s products with IBM’s real estate to create a hybrid cloud infrastructure solution that should benefit both companies.
http://www.computerdealernews.com/news/ibm-makes-major-strategic-alliance-with-vmware/46665
VMware undermines its own public cloud with IBM arrangementIt’s easy to see how this is good for IBM, since it brings the large base of VMware shops to IBM’s cloud. But it’s not totally ideal for VMware. With this agreement VMware makes it easy for its customers to use IBM’s cloud rather than its own. However, the arrangement continues to rely on VMware products under the hood so VMware still has a role to play.
http://www.fiercecio.com/story/vmware-undermines-its-own-public-cloud-ibm-arrangement/2016-02-22
- IBM poised to gobble Resilient Systems, says report
The vendor, which helps firms respond to cyber attacks, touched down in Europe a year ago when it went by the name CO3 Systems, and counts Nebulas and NTT Com Security among its UK partners.
Citing two sources with knowledge of the deal, the report said IBM is buying the Massachusetts-based outfit, with one of the two sources putting the acquisition price at more than $100m.
http://www.channelweb.co.uk/crn-uk/news/2448320/ibm-poised-to-gobble-resilient-systems-says-report
- Through Machine Learning, IBM Braintrust Sees Better Days Ahead
John Kelly, IBM’s senior vice president of cognitive solutions and research said most of that $2 trillion will come from eliminating waste in supply chain, research and development, and other processes across industries.
And, in healthcare, a market that’s becoming a big priority for IBM as evidenced by a $4 billion string of acquisitions, there is a lot of waste from missed diagnoses, lack of drug efficacy, and staffing. “We think $200 billion of that is addressable by cognitive solutions,” Kelly said.
- IBM: It’s Not All Gloom
Big Blues’ “blues” are well documented recently. Questions about the CEO being overpaid and the company’s ability to produce miracles are all too common. While we agree that IBM and technology companies in general have to answer the “what next” question emphatically, the stock isn’t without its own set of positives.
- Will Watson Health Cloud Pay off for International Business Machines Corp.?
By 2020 healthcare analytics will be a $21 billion market. And IBM will dominate this market due to Watson. The opportunity of Watson, however, spans beyond healthcare analytics and into Big Data as a whole.
While this is a much more crowded market, it is growing at an annualized rate of 26.5% through 2018, at which point it will be valued at $41.5 billion. Combined, this is a massive market opportunity that can add to IBM’s data, cloud and engagement businesses. Last year, these businesses accounted for 35% of total revenue according to Morgan Stanley, and grew 17% compared to 2014.
http://investorplace.com/2016/02/ibm-stock-watson-health-cloud/
- IBM Cements Security Standing With Redoubled Check Point Alliance
By combining forces, IBM and Check Point aim to thwart what the United Nations estimates is the $445 billion cybercrime underworld. Check Point’s and IBM Security’s researchers will be free to cross company borders to discuss threat data. And several Check Point applications will be folded into IBM technology, Check Point’s vice president of security services, Avi Rembaum, told IBD. The alliance redoubles an 18-year relationship between IBM and Check Point.
- H.I.G. Capital Acquires Portfolio of Compensation Assets from IBM
Todd Ofenloch, Managing Director at H.I.G., added, “We believe as a standalone, focused business with the resources to grow and expand the product offering, Salary.com is capable of furthering its leading market position and compelling potential customers to select its solutions over competitive offerings or continuing to utilize in-house options.”
Microsoft
- Here’s What Steve Ballmer Thinks About Microsoft and Satya Nadella
Ballmer did tell BI that he spoke to the company’s CFO Amy Hood each quarter and acknowledged meeting with Nadella four or five times a year “to brainstorm something or just as a shareholder, we’ll sit down and chat.” But, he was clear to point out, because he’s not a board member or an employee, the company cannot share any information with him that is not shared with other shareholders.
- Microsoft Buys Xamarin To Help Developers Create Cross-Platform Apps
Microsoft has acquired Xamarin, a cross-platform mobile app development platform provider, which will help developers create apps will easily work across iOS, Android and Windows mobile operating systems. This is part of Microsoft’s efforts to woo developers into making apps for the Windows 10 Mobile platform. Here’s what you need to know.
Through the Xamarin platform, developers can develop, test and deliver mobile apps to any device. Xamarin had already works with the Visual Studio development environment and this acquisition will provide even more integration. With Xamarin now a part of the Microsoft family, Visual Studio developers can use a singe shared C# codebase to build native apps on iOS, Android and Windows. This would be welcome news for developers that are interested in building cross-platform native apps.
Dell | EMC
- Dell-EMC Merger Gets FTC Approval, Remains On Track To Close
IT behemoth Dell and data storage giant EMC announced this week that the waiting period for U.S. antitrust regulations regarding the proposed Dell-EMC merger had expired. In addition to the U.S. FTC, both parties are on course to get the required EU approval at the end of the month. Moreover, Chinese authorities are also likely to approve the merger despite the possible impact it might have on Huawei, the current market leader in the data storage space in China. With this regulatory hurdle crossed, Dell can now proceed with the merger pending approval from EMC EMC +1.97% shareholders.
- Banks backing Dell’s EMC deal hit reset button
The banks underwriting the deal, including Credit Suisse, are in the process of selling the most senior portion of loans — about $7 billion — to other banks and are several weeks behind schedule. But there’s enough interest that the bank group is increasing the offering to as much as $9 billion.
http://nypost.com/2016/02/26/banks-backing-dells-emc-deal-hit-reset-button/
Oracle
- Oracle Corporation Boosts Cloud Credentials With Ravello Systems Acquisition
Oracle Corporation (NYSE:ORCL) is the latest entity to complete a tech-sector acquisition as it announced the purchase of Ravello Systems, a company specializing in operating enterprise workload in public cloud setups. Although the acquisition fee remains officially undisclosed so far, VentureBeat reports the deal could be worth $500 million.
Hewlett Packard Enterprise | HP Inc
- HP Sales Down on Weak Printer, PC Revenue
The Palo Alto, Calif., company said earnings from continuing operations declined 16% in the first fiscal quarter ended in January, while revenue fell 12% from the year-earlier period. Total printing revenue declined 17%, with revenue from ink and other supplies down 14% and hardware unit sales off 20%. HP’s PC revenue declined 13% in the first quarter.
http://ww2.cfo.com/technology/2016/02/hp-sales-weak-printer-pc-revenue/
HP Inc blames Windows 10 for drop in PC sales“I still believe [Windows 10 is] a tremendous operating system,” Weisler told investors on conference call this week, transcribed by Seeking Alpha. However, he added: “We have not yet seen the anticipated Windows 10 stimulation of demand that we would have hoped for, and we’re carefully monitoring any sort of price developments that could further weaken demand.”
And Wiesler’s claims are supported by a Gartner report last month that found a lack of Windows 10 uptake at the end of 2015 contributed to a year-on-year drop of 8.3 per cent in the PC market.
- HP wants to “reinvent computing” with a phone called Elite x3
One feature in particular has the company especially excited – Windows Continuum. This technology allows the smartphone operating system to turn into a desktop operating system (on a larger display) once the smartphone is plugged in to a larger display.
http://www.slashgear.com/hp-wants-to-reinvent-computing-with-a-phone-called-elite-x3-21427943/
TechCrunch doesn’t seem to think it will be successful…
HP Announces Yet Another Mobile Product That Will FailAn industry report published earlier last week pegs Windows Phone with only a 1.1% worldwide marketshare in the fourth quarter of 2015. That’s down from 2.2% from 2014 levels. Worse yet, Microsoft’s Windows Phone shipments dropped 57% in the most recent quarter over the previous year. The company only sold 4.5 million Lumia devices compared to 10.5 million from the same time last year.
Essentially, HP built and announced its first modern smartphone on a platform that most indicators say is dying.
http://techcrunch.com/2016/02/21/hp-announces-yet-another-mobile-product-that-will-fail
- HP Inc to cut another 1800 jobs this year
“This move is basically HP Inc embracing the tough pricing environment and shifting their focus to building their portfolio,” says Shannon Cross, an analyst for Cross Research.
http://www.crn.com.au/News/415634,hp-inc-to-cut-another-1800-jobs-this-year.aspx
Other
- Verizon and Splunk are teaming up to deliver threat protection
Verizon has enhanced its flagship Managed Security Services platform by integrating analytics from Splunk Enterprise Security solutions. The combination of Verizon’s platform and Splunk software facilitates the ingestion of data for enrichment with Verizon’s massive amount of threat context data that can be analyzed and correlated to provide more actionable security intelligence to enterprises. Verizon’s ability to manage risks is further enhanced by the visibility gained from owning and operating one of the largest global IP networks. Processing more than one million security events daily places Verizon into the unique position of being able to deliver exceptional insights into how cybercriminals attack and breach organizations.
- Data analytics provider Splunk’s revenue forecast beats estimates
Splunk, whose customers include Tesco Plc and the U.S. Department of State, forecast revenue of about $880 million for the year ending January 2017, well above the average analyst estimate of $650.8 million.
Photo: Мартин Тасев
Supplier Report: 1/23/2016
IBM has added another feather in their video stream capabilities cap with with purchase of Ustream. Considering that they recently picked up Clearleap and we should start paying attention to what IBM is doing with video services.
Investors are paying attention to EMC due to concerns that Dell might not be able to muster up the $40-50B needed to make this acquisition a reality.
Oracle is in their own reality as they file a lawsuit against the State of Oregon for a failed healthcare portal implementation. They are also in the news for claiming cloud market leader Amazon is not “enterprise” enough for most businesses.
Keep an eye out for something between Splunk and IBM, there are rumors floating around…
IBM
- IBM buys Upstream to boost cloud-based video streaming services
IBM claimed that the division will allow the firm to target the cloud-based video streaming software and services market, which is estimated to be worth a hefty $105bn.
Robert LeBlanc, senior vice president at IBM Cloud, outlined Big Blue’s ambitions for the video streaming market, saying that video has become a “first-class data type in business that requires accelerated performance and powerful analytics that allows clients to extract meaningful insights”.
This comes after IBM announced the purchase of ClearLeap during the week of 12/12/2015. Clearleap that allows streaming video to scale.
More Information:
Coincidentally, IBM also announced the launch of its Cloud Video Services unit that includes previously acquired Clearleap, Cleversafe and Aspera along with 1,000 video related patents it has accumulated since 1995. The graphic at the top of this story explains the component parts for what IBM believes will be a $105 billion market opportunity by 2019.
IBM and video? You have to see this in a wider context. Video is a very fast growing part of enterprise content. It is also a resource hog that requires significant data management effort. However, it has been something off a Cinderella in the enterprise. This acquisition and launch change that perception. More compelling, video is a very good use case for Watson based analytics solutions.
https://diginomica.com/2016/01/21/ibm-acquires-ustream-expects-video-to-lose-its-cinderella-status/
- IBM profit forecast pulls stock to 5-year low
While sales of the new services, bundled together under the heading “strategic imperatives,” increased 16 percent to $28.9 billion in 2015, the company forecast profit this year far below analysts’ projections.
Operating earnings will be at least $13.50 a share in 2016, chief financial officer Martin Schroeter said Tuesday. That’s less than the $15 a share predicted by analysts. Currency fluctuations will affect operating earnings by more than $1 a share, he said.
- Execs: Strategic shift is paying off for IBM
That’s in spite of announcing for, the 15th consecutive quarter, falling revenue. IBM (NYSE: IBM), which was down nearly 5 percent during Wednesday morning trading, has been in a period of transition for the past few years, putting less focus on hardware and more focus (and investment dollars) into cloud, analytics, mobile, social media and security. Those strategic areas were up 26 percent for the year, making up a combined $29 billion and representing about 35 percent of the revenue. Cloud alone rose 43 percent to $10.2 billion for the year.
- IBM inks $40 million deal to transform the way people withdraw from ATMs
BTI Payments, which is a White Label ATM (WLA) operator, has entrusted IBM to transform its IT Infrastructure and deploy and manage an incremental 4,000 Automated Teller Machines (ATM) across the country.
This IT Infrastructure transformation will help reduce operational and capital expenditure while adding business value.
EMC | Dell
- Two big risks could torpedo Dell-EMC deal
Dell and its Silver Lake backers must now be worried that the deal will be dead in the water before it happens. They have to raise $40bn – $50bn in debt to finance the EMC acquisition. If that debt-raising exercise fails, because investment groups and organisations can’t see EMC shareholders accepting the tracking stock, and can’t also see why they should finance Dell/Silverlake buying EMC for 30 per cent more than it’s worth, then the whole deal could fall apart.
http://www.theregister.co.uk/2016/01/21/two_big_risk_torpedoes_could_screw_dellemc_deal/
HP Inc | Hewlett Packard Enterprise
- Trial date set for Hewlett-Packard multi-billion fraud case
Hewlett-Packard and Autonomy are to continue their long running $10 billion takeover dispute for a further two years, with a 2018 London trial set to see the two companies fight over $5.1 billion.
- Whitman: We’re doing OK, despite economic slowdown
http://www.cnbc.com/2016/01/21/whitman-were-doing-ok-despite-economic-slowdown.html
Oracle
- Oracle Jabs Again in Legal Fight with Oregon
Oracle responded with its own lawsuit last year that alleged certain Oregon officials purposely sabotaged the project for political reasons and shifted the blame to Oracle. The technology giant alleged in its new lawsuit that its company executives and staff members representing Oregon governor Kate Brown agreed to settle all of the lawsuits on Oct. 19.
http://fortune.com/2016/01/20/oracle-sues-oregon-healthcare-settlement/
- Amazon’s Cloud Is Not Enterprise-Ready, Says Oracle Exec
I love it when Oracle talks trash…“My conclusion is it’s easier to add cloud tech to an enterprise company than to add enterprise stuff to a cloud company,” he said. “I’m a legitimate convert because I thought this through before I joined up here.” Before joining Oracle in late 2014, Magnusson drove development of Google GOOG 2.62% App Engine.
http://fortune.com/2016/01/20/oracle-exec-says-aws-not-enterprise-ready/
Other
- Why IBM and Oracle Plunged in 2015 While Microsoft Soared 19% Higher
Ending on a positive note, we’re left with Redmond’s finest. Under Nadella, Microsoft has embraced many strategies that would have been unthinkable under Ballmer, and with good results. Despite a flagging PC market and a dead-end entry into the mobile market, Microsoft has found a way back to earnings growth and stabilizing revenues.
Like Oracle, the company is betting heavily on cloud computing. Unlike the database giant, Microsoft has found a big winner in its Windows Azure cloud-computing platform, which is an almost unchallenged No. 2 in that fast-growing market. Oracle is not even on the radar yet. So Microsoft is getting results from Nadella’s new strategy already, giving investors a strong return in 2015.
- Google’s new managed containers are brought to you by Red Hat
So Red Hat is in bed with Microsoft, and now Google… very interesting.Google and Red Hat are touting several advantages of their collaboration, including the fact that OpenShift could complement and expand the use of Kubernetes, Google’s container management and orchestration system. Kubernetes has fast become a standard-issue item on most cloud platforms with containers, and Red Hat is the No. 2 contributor to that project, behind Google.
- Splunk outperforms after analyst predicts major deal with IBM
Northland analyst Tim Klasell heard from a “few industry sources” that Splunk and IBM are “moving closer together” and could agree to a meaningful partnership over time. The analyst told investors in a research note that IBM is getting close to a “big move to improve its ties” with Splunk. While Klasell did not know the financial details, he believes such a partnership could be a “nice tailwind” for Splunk to sign larger deals. The analyst has an Outperform rating on Splunk with an $80 price target.
SourceCast: Episode 12: Don’t Touch It Twice
Supplier Report: 1/16/2016
IBM is looking for trouble… or at least fraud. The company purchased Iris Analytics, a company that developed a real-time fraud engine for machine learning. I guess Watson really will be Watson-esque. IBM also topped US patent creation list (again).
HPI did not have good news during the holidays, PC sales slipped (except for Apple), while HPE looks to sell of their stake in MPhasis ($1B).
EMC has a new CIO and Microsoft dropped their cloud fees to be more competitive with Amazon.
IBM
- IBM buys fraud sniffing biz for real-time protection
IBM has assimilated a German payment fraud prevention business, IRIS Analytics, a provider of a real-time fraud analytics engine using machine learning algorithms, for undisclosed terms.
http://www.theregister.co.uk/2016/01/15/ibm_slurps_up_fraud_detection_biz_for_realtime_protection/
- IBM tops US patent list again
The computer company was granted 7,355 patents in the US. According to its statement, IBM inventors generated more than 2,000 patents in areas related to cognitive computing and the company’s cloud platform.
http://ipprotheinternet.com/ipprotheinternetnews/article.php?article_id=4738
- IBM Introduces Dynamic Pricing to Help Retailers Navigate Online Price Wars
“At any given moment, a retailer is no more than one click away from losing a customer online. IBM Dynamic Pricing executes real-time pricing recommendations at the scale and speed needed to ensure competitiveness in a volatile shopping environment,” saidStephen Mello, Vice President, IBM eCommerce & Merchandising. “This intuitive and dynamic pricing system improves visibility into what’s happening in the market, allowing retailers to make decisions that are best for their businesses and customers alike.”
- IBM’s Profits Hit An All-Time High
While stagnant on a nominal basis, IBM’s per-share profitability has hit an historical high in the most recent trailing 12-month period. This improvement can be attributed to two factors: value-accretive share buybacks and the firm’s shift in focus to less asset-intensive businesses. Uncertainty remains as to how soon the company will be able to generate revenue growth, but growth in profits and cash flow are arguably more important to valuation.
http://seekingalpha.com/article/3810366-ibms-profits-hit-an-all-time-high
More on this:
Outstanding! In fact, IBM’s profit per share increase works out to roughly a 9% compound annual growth rate of profits since 2006 and the most recent trailing twelve-month figure is the highest in the company’s history.
HP Inc | Hewlett Packard Enterprise
- Apple leads holiday PC shipments despite market contraction
Market leaders Lenovo, HP Inc. and Dell all faced decreases, with Lenovo’s shipments declining to 15.4 million from 16.1 million, HP’s dipping to 14.2 million from 15.4 million and Dell’s dimming to 10.2 million from 10.8 million. The fourth quarter marked the fifth straight quarter of worldwide PC declines, and Mikako Kitagawa, principal analyst at Gartner, said holiday sales “did not boost” the market.
http://www.forextv.com/market-news/apple-leads-holiday-pc-shipments-despite-market-contraction/
- HP Inc. Is Cheap, But Is That Enough?
In the medium to longer term, it’s also worth thinking about whether the strong improvements in battery life enabled by newer generations of chips will continue to extend the refresh cycle over time. Think about it – old laptops that had 2-3 hour battery life to start with left you with battery anxiety within a few years. Now that smaller, more power-efficient laptops can get double or triple that battery life, there may not be as much need for personal users to replace laptops as quickly. This article from Digital Trends demonstrates the rapid improvements in battery life over just the past few years – and indications are that Intel’s Skylake chips will continue the trend of Haswell and Broadwell toward greater efficiency.
http://seekingalpha.com/article/3803146-hp-inc-is-cheap-but-is-that-enough
- Hewlett Packard Enterprise (HPE) to Sell ($1B) Stake in Mphasis?
Hewlett-Packard purchased Mphasis when it acquired Electronic Data Systems in 2008 for approximately $13.9 billion. At the time, the company’s Technology Solutions Group segment shifted its outsourcing services operations and a part of its consulting and integration activities to Electronic Data. The Indian company has since functioned as an independent subsidiary of Hewlett Packard. The sale of Mphasis comes at a time when the company is attempting to restructure its IT consulting and services group. Hewlett-Packard stated that it was planning to shed around 25,000 to 30,000 jobs in its enterprise business.
http://www.zacks.com/stock/news/203493/hewlett-packard-enterprise-hpe-to-sell-stake-in-mphasis
EMC | Dell
- EMC gets new CIO in midst of Dell purchase
ML Krakauer took the reins as EMC’s CIO last week, replacing Vic Bhagat, who joined EMC as CIO in 2013.
http://www.ciodive.com/news/emc-gets-new-cio-in-midst-of-dell-purchase/411931/
- How Will EMC’s Once Pivotal Ambitions Play Out?
To be fair, that may never have been Pivotal’s vision, though there’s little question that EMC and VMware had to offer their customers a reason to stick with their more expensive, proprietary solutions instead of rushing to Amazon. Whether they succeeded with that is unclear, but we’ll leave it to Michael Dell to craft the rest of that story. Pivotal, on the other hand, may have the chance to write its own story if reports of its immanent IPO are true. In the mean time, it went shopping — but more on that later.
http://www.cmswire.com/information-management/how-will-emcs-once-pivotal-ambitions-play-out/
- EMC exec reacts to criticism of proposed Dell merger
“Vinod is a smart venture capitalist and I don’t doubt his ability to recognize innovation in startups, but his view on our ability to innovate at scale is not entirely accurate,” according to a Tuesday filing with the U.S. Securities and Exchange Commission. ” … As a roughly $80B entity, Dell+EMC will need more than just one source and method of innovation. Our model provides exactly that.”
- EMC’s Stock Fell 14% in 2015
the share price of EMC fell 14% in 2015 from $29.83 to $25.68. Its share price fell 6.2% on October 21, 2015, as it reported an 8.3% YoY (year-over-year) drop in EPS (earnings per share) in its 3Q15 earnings results. Its reported revenues of $6.1 billion were in line with analyst estimates.
Other
- Microsoft Drops Prices For Some Azure Instances By Up To 17%
Microsoft has long said it would match AWS’s prices for compute, storage and bandwidth. Earlier this month, Amazon dropped the priceof some of its general purpose, compute- and memory-optimized EC2 machines. It doesn’t come as a major surprise then that Microsoft is now also dropping the prices for some of its virtual machines by between 10 and 17 percent.
http://techcrunch.com/2016/01/14/microsoft-drops-prices-for-some-azure-instances-by-up-to-17/
Photo: Greg Rakozy