Supplier Report: 6/15/2018
The DOJ said it would not block AT&T’s $85B acquisition of Time Warner on Thursday, within hours the acquisition was deemed complete. AT&T wasn’t the only company making moves… Workday bought TWO companies and data analytics companies Slack and Tableau both announced acquisitions this week.
Amazon was in the press for poor labor conditions in their Alexa supply chain. Foxconn workers making the devices have been found to be mistreated and underpaid. Amazon’s own audit of the situation confirms the report.
Oracle shares dropped due to a JP Morgan CIO report documenting a decrease of purchasing interest of Oracle products and services from IT executives.
Acquisitions
- AT&T Completes Acquisition of Time Warner Inc.
Under the terms of the merger, Time Warner Inc. shareholders received 1.4 shares of AT&T common stock, in addition to $53.75 in cash, per share of Time Warner Inc. As a result, AT&T issued 1,185M shares of common stock and paid $42.5B in cash. Including net debt from Time Warner, we now have $180.4B in net debt.
https://www.businesswire.com/news/home/20180614006343/en/ATT-Completes-Acquisition-Time-Warner
- Workday acquires Rallyteam to fuel machine learning efforts
In this case, Workday appears to be acquiring the talent. It wants to take the Rallyteam team and incorporate it into the company’s engineering unit to beef up its machine learning efforts, while taking advantage of the expertise it has built up over the years connecting employees with interesting internal projects.
“With Rallyteam, we gain incredible team members who created a talent mobility platform that uses machine learning to help companies better understand and optimize their workforces by matching a worker’s interests, skills and connections with relevant jobs, projects, tasks and people,” Workday’s Cristina Goldt wrote in a blog post announcing the acquisition.
https://techcrunch.com/2018/06/08/workday-acquires-rallyteam-to-fuel-machine-learning-efforts/
- Workday acquires financial modelling startup Adaptive Insights for $1.55B
Workday, the cloud-based platform that offers HR and other back-office apps for businesses, is making an acquisition to expand its portfolio of services: It’s buying Adaptive Insights, a provider of cloud-based business planning and financial modelling tools, for $1.55 billion. The acquisition is notable because Adaptive Insights had filed for an IPO as recently as May 17.
Workday says that the $1.55 billion price tag includes “the assumption of approximately $150 million in unvested equity issued to Adaptive Insights employees” related to that IPO. This deal is expected to close in Q3 of this year.
- Tableau gets AI shot in the arm with Empirical Systems acquisition
The startup was born just two years ago from research on automated statistics at the MIT Probabilistic Computing Project. According to the company website, “Empirical is an analytics engine that automatically models structured, tabular data (such as spreadsheets, tables, or csv files) and allows those models to be queried to uncover statistical insights in data.”
The product was still in private Beta when Tableau bought the company. It is delivered currently as an engine embedded inside other applications. That sounds like something that could slip in nicely into the Tableau analytics platform. What’s more, it will be bringing the engineering team on board for some AI knowledge, while taking advantage of this underlying advanced technology.
- Splunk to Acquire Software Problem-Solver VictorOps for $120 Million
Big data-cruncher Splunk is acquiring VictorOps, a Boulder, Colo.-based startup whose tools help software developers collaborate and resolve engineering issues, for $120 million mostly in cash with some stock equity. The deal is expected to close before August.
VictorOps’ tech brings together software engineers so they can overcome technical issues as they arise. The system generates notifications, pulls relevant parties into chat groups, presents pertinent documents, and keeps detailed records as teams work through coding problems.
http://fortune.com/2018/06/11/splunk-acquire-software-startup-victorops/
Artificial Intelligence
- Accenture wants to beat unfair AI with a professional toolkit
“We’re seeing increasing focus on algorithmic bias, fairness. Just this past week we’ve had Singapore announce an AI ethics board. Korea announce an AI ethics board. In the US we already have industry creating different groups — such as The Partnership on AI. Google just released their ethical guidelines… So I think industry leaders, as well as non-tech companies, are looking for guidance. They are looking for standards and protocols and something to adhere to because they want to know that they are safe in creating products.
“It’s not an easy task to think about these things. Not every organization or company has the resources to. So how might we better enable that to happen? Through good legislation, through enabling trust, communication. And also through developing these kinds of tools to help the process along.”
https://techcrunch.com/2018/06/09/accenture-wants-to-beat-unfair-ai-with-a-professional-toolkit/
Cloud
- Oracle shares drop after JP Morgan downgrades on lost business to Amazon and Microsoft
Oracle’s “specific metrics in our large-scale CIO survey have arced over into negative territory, which makes us uncomfortable because the results of our CIO surveys over the years have been highly predictive,” analyst Mark Murphy said in a note to clients Thursday. “Oracle spending intentions have only looked lukewarm in our CIO survey work in the recent past, but the data takes a dive in the current survey. … In our discussions, CIOs have clarified that they are migrating Oracle databases to Microsoft SQL Server, Amazon databases and PostgreSQL.”
Software/SaaS
- Microsoft will ‘lose developers for a generation’ if it stuffs up GitHub, says future CEO
“We are buying GitHub because we like GitHub; our plan is to continue to invest in the GitHub roadmap, and make GitHub better at being GitHub,” Friedman wrote.
That means no ads in public repos, because Friedman said Sourceforge became “a swamp of banner ads and pop ups and delayed downloads to expose users to more ads”. He added that “GitHub’s clean interface and developer-centric approach can be seen in part as a reaction against Sourceforge” and suggested GitHub’s ascendency shows a no-ads approach has proven the correct approach.
https://www.theregister.co.uk/2018/06/08/nat_friedman_github_ceo_elect_ama_session/
- Yahoo Messenger is shutting down on July 17, redirects users to group messaging app Squirrel
“There currently isn’t a replacement product available for Yahoo Messenger,” the company writes. “We’re constantly experimenting with new services and apps, one of which is an invite-only group messaging app called Yahoo Squirrel (currently in beta).” Squirrel is a group messaging app Yahoo started testing last month. You can request access to the beta here.
Datacenter/Hardware
- IBM and the DoE launch the world’s fastest supercomputer
Summit, which has been in the works for a few years now, features 4,608 compute servers with two 22-core IBM Power9 chips and six Nvidia Tesla V100 GPUs each. In total, the system also features over 10 petabytes of memory. Given the presence of the Nvidia GPUs, it’s no surprise that the system is meant to be used for machine learning and deep learning applications, as well as the usual high performance computing workloads for research in energy and advanced materials that you would expect to happen at Oak Ridge.
https://techcrunch.com/2018/06/08/ibms-new-summit-supercomputer-for-the-doe-delivers-200-petaflops/
- Qualcomm Is Cutting Up to Half of Jobs in Data-Center Unit
The company will eliminate 241 positions at its design center in Raleigh, North Carolina, and 43 in California, according to notices filed with those states. The total number of cuts, including those not covered by such notices, will represent a third to half of the server-chip unit’s employees, according to a person familiar with the process. The reduction comes on top of the previously announced elimination of about 1,500 workers across the company.
Other
- Verizon CEO to Retire, Succeeded by a Newcomer
Verizon Communications Inc. VZ 0.35% named Hans Vestberg as its next chief executive, choosing a relative newcomer to run the wireless giant at a time when its industry is being reshaped by megadeals.
Mr. Vestberg, who joined the company about a year ago and is its chief technology officer, will succeed longtime CEO Lowell McAdam on Aug. 1. Mr. McAdam will remain executive chairman until the end of the year and then become nonexecutive chairman.
- After report on ‘appalling’ conditions, Foxconn will investigate plant that makes Amazon devices
Though regular workers were better compensated in terms of wages and benefits, China Labor Watch says both groups were subjected to long hours and low wages, with workers putting in more than 100 overtime hours during peak season, even though the legal limit is 36 hours, and some working consecutively for 14 days. Workers on average earned wages between 2000 to 3000 RMB ($312.12 to $468.19), significantly less than Hengyang’s monthly average wage of 4,647 RMB ($725.22), but often had their overtime hours as punishment for taking leave or having unexcused absences.
The report also claimed that the factory had poor fire safety in its dormitories, lack of sufficiently protective equipment, verbally abusive managers and the “absence of a functioning labor union.”
https://techcrunch.com/2018/06/10/after-report-on-appalling-conditions-foxconn-will-investigate-plant-that-makes-amazon-devices/
Workers not paid legally by Amazon contractor in ChinaAmazon disclosed that its own auditors visited the Foxconn factory in March and found that it had hired an illegally high number of agency workers and was not paying them properly for working overtime.
Agency staff – known as dispatch workers in China – do not get sick pay or holiday pay and can be laid off without wages during lulls in production. China changed its labour laws in 2014 to limit their use to 10% of any workforce in an attempt to stop companies exploiting them to cut costs.
https://www.theguardian.com/technology/2018/jun/09/amazon-contractor-foxconn-pay-workers-illegally
Photo by Michael Prewett on Unsplash
SourceCast: Episode 123: YouTube Edition
SourceCast: Episode 123: Microsoft Buys Github
Supplier Report: 6/8/2018
Microsoft is purchasing code sharing site GitHub for $7.5B. The logic behind the acquisition is to push more code and development activities towards Microsoft’s Azure cloud platform and away from AWS.
Meanwhile, Amazon’s Jeff Bezos is worried about cloud lock-in. While Amazon does have more tools than other providers to help move off the platform, it is still a costly decision if a customer wants to go to another cloud service.
Google is opting not to continue their military AI contract and is creating corporate guidelines that prevent the company from weaponizing artificial intelligence in the future.
Acquisitions
- Microsoft Is Buying GitHub for $7.5 Billion in Stock
The deal values GitHub at nearly four times the $2 billion valuation given by private investors in a fundraising round three years ago. GitHub has grown into a major nexus for software developers to share and collaborate on code—it claims 28 million users. The 10-year-old company, which charges corporate customers, doesn’t disclose revenue or profit, and its financial performance isn’t clear.
Acquiring GitHub could help Microsoft persuade more developers to create applications for its cloud-computing business, where customers rent digital resources and applications on demand. Microsoft is racing to catch up to industry leader Amazon.com Inc. in that business.
https://www.wsj.com/articles/microsoft-to-acquire-github-for-7-5-billion-in-stock-1528118504
Of course… it has to be weaponized…
This is why Microsoft should buy $2 billion startup GitHub and turn it into a weapon against AmazonSo the opportunity for Microsoft is fairly straightforward. If it can get the Microsoft Azure cloud tightly integrated with GitHub — basically, give developers an easy way to get a GitHub project up and running in the cloud — it can kill two birds with one stone. Developers could love GitHub even more, and it would drive more usage of Microsoft Azure.
Artificial Intelligence
- Google reportedly won’t renew its controversial military AI contract
According to three individuals who attended a weekly Google meeting this morning, Google Cloud CEO Diane Greene announced that the Project Maven contract would not be renewed when it expires next year. She said the backlash over the deal had been bad for the company and that the contract was pursued during a time when the company was actively seeking military work.
Internal emails obtained by Gizmodo showed that Google’s plans for the project may not have been as low-key as the company wanted people to think. Google reportedly put at least 10 employees on the project, viewed the deal as a gateway for future military and intelligence contracts and sought and received security authorizations that would allow it to work on additional government contracts. The Project Maven contract is also apparently worth more than Google executives once said, pulling in around $15 million instead of the $9 million that was previously reported. Its budget also had the possibility of growing to as much as $250 million. Additionally, emails show that Google planned to build a surveillance system for the Pentagon that would let analysts “click on a building and see everything associated with it.”
https://www.engadget.com/2018/06/01/google-will-not-renew-military-ai-contract-project-maven/
- Google pledges not to develop AI weapons, but says it will still work with the military
While the new principles forbid the development of AI weaponry, they state that Google will continue to work with the military “in many other areas.” Speaking to The Verge, a Google representative said that had these principles been published earlier, the company would likely not have become involved in the Pentagon’s drone project, which used AI to analyze surveillance footage. Although this application was for “non-offensive purposes,” and therefore hypothetically permitted under these guidelines, the representative said it was too close for comfort — suggesting Google will play it safe with future military contracts.
As well as forbidding the development of AI for weapons, the principles say Google will not work on AI surveillance projects that violate “internationally accepted norms,” or projects which contravene “widely accepted principles of international law and human rights.” The company says that its main focuses for AI research are to be “socially beneficial.” This means avoiding unfair bias; remaining accountable to humans and subject to human control; upholding “high standards of scientific excellence,” and incorporating privacy safeguards.
- IBM says it’s reaching for the ‘moon’ with Watson Health. That hasn’t stopped layoffs.
All told, once the Truven deal closed, IBM had “invested more than $4 billion to acquire and build an unparalleled array of cognitive healthcare capabilities,” it said, having previously stressed that each of the acquisitions came with client lists and databases.
The databases were certainly among the most important components of the deal because machine-learning systems like Watson rely on having a large number of cases to comb through in their search for analytic breakthroughs.
Kavanaugh published a 53-page report last summer that questioned whether the investment in Watson will ever pay off for IBM, mostly on the grounds that competitors like Google and Amazon seem better-positioned to win what he called “the A.I. war.”
http://www.heraldsun.com/news/business/article212325914.html
Cloud
- Bezos doesn’t want AWS customers to feel ‘trapped’
Though cloud computing can often lead to a vendor “lock-in,” Amazon CEO Jeff Bezos said Amazon Web Services works hard to prevent customers from feeling “trapped” in its services, speaking at the annual shareholder meeting last week, reports GeekWire.
However, Bezos pointed out that adopting another cloud provider after already implementing one because of the time and money invested in the process can be costly. Developers taking time to learn application programming interfaces (APIs) is what directs many businesses to maintain a singular cloud vendor instead of “managing two different systems,” Bezos said.
https://www.ciodive.com/news/bezos-doesnt-want-aws-customers-to-feel-trapped/524889/
- SAP and IBM marry their cloud services in a partnership aimed at private cloud deploymentsa
IBM Corp. and SAP SE today announced plans to launch an edition of the SAP Cloud Platform running on the IBM Cloud for private cloud deployments. The companies said the collaboration will help clients in regulated industries build new applications on the cloud without jeopardizing security and control.
IBM has recently established or tightened cloud partnerships with Red Hat Inc., VMware Inc. and New Relic Inc. with the goal of helping enterprise customers move more easily to the cloud and take advantage of recent innovations like containers. “Our goal is to provide the cloud of choice for every enterprise, and particularly for enterprise workloads,” said Bradley Knapp, IBM’s offering manager for IBM Cloud for SAP.
Security
- The damage from Atlanta’s huge cyberattack is even worse than the city first thought
On Wednesday during a budget meeting, Daphne Rackley, Atlanta’s Interim Chief Information Officer and head of Atlanta Information Management, disclosed new details about the extent of the damage. As Reuters reports, at least one third of the 424 software programs that the city runs remain offline or partially inoperable. Almost 30 percent of those programs are deemed “mission critical” by the city meaning that they control crucial city services like the court system and law enforcement. In the meeting, Rackley explained that the city initially believed only 20 percent of the city’s software programs to be affected by the attack, none of which affected critical systems.
While reporting the updated numbers, Rackley estimated that $9.5 million would need to be added to the department’s $35 million budget to address the remaining damage. That amount is on top of the more than two million dollars in emergency procurements sought by Atlanta Information Management following the attack.
https://techcrunch.com/2018/06/06/atlanta-cyberattack-atlanta-information-management/
Software/SaaS
- Gartner recognises SAP Ariba as Procure-to-Pay leader
With more than 3.3mn connected companies in 190 countries transacting over $1.7trn in commerce on an annual basis, the Ariba Network is the world’s largest business-to-business trading platform.
SAP Fieldglass’ cloud-based, open platform, which has a 99% customer retention rate, has been deployed in more than 180 countries and is used by organisations around the world to find, engage and manage all types of flexible resources.
“We feel that our standing as a Leader in this Magic Quadrant reflects our value as an integrated end-to-end solution,” said Vish Baliga, Chief Technology Officer, SAP Fieldglass.
https://www.supplychaindigital.com/procurement/gartner-recognises-sap-ariba-procure-pay-leader
- Coupa: Valuation At A Dangerous Tipping Point
Coupa also possesses few of the fundamental traits that typically accompany such a highly valued stock. The 37% y/y growth rate Coupa posted this quarter was, at least relative to other high-growth SaaS stocks, fairly middling. There are companies growing at 40-50%, like MongoDB (MDB), that are valued at only 8x forward revenues. And while investors may cheer on Coupa’s ability to generate free cash flow (which is, admittedly, a rarity in the SaaS sector and impressive at Coupa’s early stage), its FCF margin of 20% still can’t be considered best-in-breed, as other companies like Dropbox (DBX) have FCF margins closer to 30%.
https://seekingalpha.com/article/4179374-coupa-valuation-dangerous-tipping-point
Datacenter/Hardware
- IRS to Spend Nearly $300 Million on IT in Tax Overhaul
The Internal Revenue Service plans to spend $291 million updating 140 computer systems to help it implement the new tax law, according to a previously undisclosed agency document.
Those information-technology costs and other back-office operations will consume more than 90% of the money Congress is giving the IRS for implementation. The IRS is also bracing for a 17% increase in phone calls, planning to revise 450 forms and publications and organizing 40,000 hours of training, according to the document.
Other
- Behind the Messy, Expensive Split Between Facebook and WhatsApp’s Founders
Facebook’s hands-off stance changed around 2016. WhatsApp topped one billion monthly users, and it had eliminated its 99 cent fee. Facebook told investors it would stop increasing the number of ads in Facebook’s news feed, resulting in slower advertising-revenue growth. This put pressure on Facebook’s other properties—including WhatsApp—to make money.
That August, WhatsApp announced it would start sharing phone numbers and other user data with Facebook, straying from its earlier promise to be built “around the goal of knowing as little about you as possible.”
With Mr. Zuckerberg and Ms. Sandberg pushing to integrate it into the larger company, WhatsApp moved its offices in January 2017 from Mountain View, Calif., to Facebook’s Menlo Park headquarters about 20 minutes away. Facebook tried to make it welcoming, decorating the Building 10 office in WhatsApp’s green color scheme.
Photo by Kyle Cottrell on Unsplash