Supplier Report: 7/21/2017
Cloud technology is the main theme of the week. Microsoft solidified themselves as the #2 cloud company with very strong earnings. Amazon is zoning in on health cloud and lured away a Box executive to make things happen. They also removed certain ownership language in their standard contracts that rubbed many clients the wrong way. Google is attempting to push quantum computing to cloud as industry insiders ponder if their strategy is working.
IBM’s 21st consecutive quarterly loss had news organizations and investors calling for IBM to make a change… any change at this point.
Acquisitions
- Sprint’s Chairman Has Engaged Warren Buffett About Investment
Sprint Corp. Chairman Masayoshi Son has engaged Warren Buffett and cable mogul John Malone in discussions about participating in a deal with the wireless company, people familiar with the situation say.
The contours of the deal the parties are discussing are unclear. The talks are at an early stage and may not result in an agreement, the people said, but one possibility would see Berkshire put more than $10 billion into a transaction.
- Uber Rival Grab in Talks for Up to $2 Billion from SoftBank, China’s Didi
Singapore-based GrabTaxi Holdings Pte is raising as much as $2 billion from Japan’s SoftBank Group Corp and Chinese ride-hailing company Didi Chuxing Technology Co., people familiar with the matter said.
The deal could be completed in the next few weeks and would value Grab, as it is known, at more than $5 billion—making it the region’s most valuable startup. Grab launched in 2012 and operates in 65 cities across seven countries.
Artificial Intelligence
- IBM’s AI can predict schizophrenia by looking at the brain’s blood flow
The research team first trained its neural network on a 95-member dataset of anonymized fMRI images from the Function Biomedical Informatics Research Network which included scans of both patients with schizophrenia and a healthy control group. These images illustrated the flow of blood through various parts of the brain as the patients completed a simple audio-based exercise. From this data, the neural network cobbled together a predictive model of the likelihood that a patient suffered from schizophrenia based on the blood flow. It was able to accurately discern between the control group and those with schizophrenia 74 percent of the time.
https://www.engadget.com/2017/07/20/ibms-ai-can-predict-schizophrenia-by-looking-at-the-brains-blo/
Cloud
- Amazon nabs a top Box exec in health as it goes after the medical industry
Missy Krasner, vice president and managing director of Box’s healthcare and life sciences group, is headed to the e-commerce company, according to two sources familiar with the matter. The sources, who asked not to be named because the hire hasn’t been announced, didn’t know exactly what role she’ll have.
Amazon is investing heavily in health across a number of different areas, and another source said Krasner has been talking to Amazon Web Services for several years about a potential move.
AWS, the cloud division, is bolstering its HIPAA-compliant offerings so that health-care providers and insurers can store and move customer data. Customers include Bristol-Myers Squibb, Siemens and Orion Health.
http://www.cnbc.com/2017/07/20/amazon-hires-box-vp-missy-krasner-to-beef-up-health-division.html
- Google wants to sell quantum computing in the cloud
Whether or not you believe Google has honest-to-goodness quantum computers, the bigger problem is their limited access: they’re largely off-limits outside of the company itself. That could change sooner than you think, though. Bloomberg sources understand that Google is gearing up toward using its quantum systems in a “faster, more powerful” computing service than it offers today. It recently started offering access to researchers in order to spur development of tools and apps (including through an open source Project Q initiative), and there’s a new lab it describes as an “embryonic quantum data center.” It’s looking at the practical realities of quantum computing, in other words.
https://www.engadget.com/2017/07/17/google-puts-quantum-computers-to-work-in-cloud/
- Is Google’s Cloud Strategy Working?
Alphabet doesn’t break out its cloud sales, but it believes it could beat Amazon to become the world’s largest cloud infrastructure vendor in the next five years. Amazon generated $3.7 billion in revenue from its cloud division, AWS (Amazon Web Services), in 2Q17, which represented a 42.0% YoY (year-over-year) rise.
Alphabet’s cloud business will be on the radar of many investors as it reports 2Q17 earnings, mainly due to Google’s comments about its cloud strategy. Google earlier this year suggested that it doesn’t see itself joining rivals Amazon, Microsoft, and Oracle in cloud computing pricing wars.
Instead, Google wants to compete on the basis of service quality and portray itself as the go-place for cloud services related to data analytics and artificial intelligence.
http://marketrealist.com/2017/07/is-googles-cloud-strategy-working/
- Amazon Cloud Service Drops Controversial Clause
With competition heating up in the cloud computing arena, Amazon.com Inc. is removing a clause from its Amazon Web Services contracts that irked customers worried about their intellectual property (IP).
Based on an updated version of the AWS customer agreement, the ecommerce giant has remove the non-asset clause from the contract that prevented customers from suing the company over patent infringement. With a tons of companies using AWS for computing and data storage, many were concerned that IP could end up in the hands of Amazon.
http://www.investopedia.com/news/amazon-cloud-service-drops-controversial-clause/
- Microsoft Profit Jumps, Fueled by Cloud Computing
Microsoft doesn’t disclose revenue figures for its Azure and Office 365 businesses, but it said Azure revenue jumped 97% and Office 365 revenue rose 43%.
Overall, Microsoft posted $6.51 billion in fourth-quarter net income, or 83 cents a share, compared with a profit of $3.12 billion, or 39 cents a share, a year ago. Excluding the impact of revenue deferrals and other items, adjusted earnings climbed to 98 cents from 69 cents a year earlier.
https://www.wsj.com/articles/cloud-computing-helps-power-microsoft-earnings-1500583095
Datacenter
- Michael Dell Says Public Cloud Is Important But It’s Not Everything
“There’s a boomerang of companies moving to public cloud,” Dell said. “We’re not against it, but it’s not the right place to put all workloads.”
For 90% of a given company’s predictable computing tasks, running them in-house or in a co-location center, costs less than public cloud, Dell said. A co-location center is a data center used by many businesses, each of which controls their own hardware and software.
“AWS gets expensive when you scale it up,” Dell said. (That’s a contention that Amazon would likely contest.)
Software/SaaS
- Rimini Street: Dispute with Oracle is contract law, not copyright
The smaller company accepted some of the charges against it, saying it will pay $35.6m for “innocently infringing the software”, but appealed against the rest following the October 2016 judgment.
Without being able to do this, Rimini Street is prevented from carrying out its responsibilities to its own clients, Perry added.
He argued that Oracle had surrendered its exclusive rights to copying, and that Rimini had permission to copy the software – instead the issue was with the environment that it created and how that environment was used, and on which server it lived.
“Cross-use and hosting are contract law,” Perry said. “Those are licence disputes… and ought to be resolved as matter of contract law and not copyright law.”
https://www.theregister.co.uk/2017/07/14/oracle_vs_rimini_street_court_latest/
Other
- IBM Revenue Decline Continues to Pressure Bottom Line
The 4.7% drop in second-quarter revenue, to $19.3 billion, marked the 21st consecutive quarter of declining sales at IBM. Profit margins also narrowed across all business units, including the divisions for its main cloud computing and Watson-artificial intelligence operations—two areas Ms. Rometty is counting on to propel the company’s turnaround. Profit fell 6.9% from a year earlier.
Earnings results exceeded analysts’ expectations. Still, revenue came in below forecasts, and shares in Big Blue slid more than 3% after-hours Tuesday, extending a roughly 8% drop this year through Tuesday’s close. In contrast, the S&P 500’s has gained nearly 9% during the same period.
https://www.wsj.com/articles/ibm-revenue-decline-continues-to-pressure-bottom-line-1500411024
- To Save IBM, Rometty Needs To Go Big Or Go Home
Rometty should aggressively rebrand IBM by simply naming it after the one thing in which IBM remains a market leader – Watson. All efforts in the cloud should be geared towards not just acting as a service provider but differentiating IBM by tailoring Watson’s services to the given client’s data so it can augment their decision-making. While they’re at it they can rename their cloud effort Watson Cloud.
https://www.forbes.com/sites/ryanwibberley/2017/07/19/to-save-ibm-rometty-needs-to-go-big-or-go-home/#2479fd827ac0
Cramer: IBM is just another company that has been ‘Amazoned’Regarding IBM’s growth, Cramer said a lot of the initiatives the company is doing have not “kicked in yet, so the stock has not kicked in yet.” He added, “IBM is really burdened by the old business. And the new business — they’re up against these amazing companies.”
http://www.cnbc.com/2017/07/19/cramer-ibm-is-just-another-company-that-has-been-amazoned.html
Photo: Robson Hatsukami Morgan
Supplier Report: 7/14/2017
IBM is coming under fire by Jefferies and competitor OpenText over their AI success (or lack of it). Jefferies says IBM customers are suffering from complicated implementations and OpenText claims that their AI platform is better and cheaper.
Google is hoping to leverage AI technology to make the world a better place. And what better way to improve the world than to buy a small AI company in India (…that does have a social focus).
Meanwhile Verizon made the world a slightly worse place by announcing a security breach that could impact up to 14 million customers.
Acquisitions
- Google’s new AI acquisition aims to fix developing world problems
While Halli Labs is still in its infancy, the company’s founder — Pankaj Gupta — is a data scientist who has worked at Twitter as well as defunct Indian Airbnb competitor Stayzilla. Google buying AI firms is hardly shocking news, but the tech giant’s focus on expanding into developing markets is what separates this from other recent acquisitions. With Google previously introducing region-specific offline versions of apps and even installing Wi-Fi into Indian train stations, the tech behemoth has already shown its interest in making life easier for the country’s growing population of internet users.
https://www.engadget.com/2017/07/12/googles-new-ai-acquisition-aims-to-fix-developing-world-problem/
- DXC Technology Acquires Tribridge
End-to-end IT services company DXC Technology has acquired Tribridge, a software services and cloud solutions company, and Concerto Cloud Services, ribridge’s hybrid solutions and advisory services affiliate. Under the purchase agreement, effective on the date of acquisition, Tribridge has been renamed Tribridge, a DXC Technology Company. Concerto Cloud Services will go to market as DXC Concerto. Financial terms of the purchase were not disclosed. Tribridge is one of the largest independent integrators of Microsoft Dynamics 365.
http://www.retailtouchpoints.com/features/mergers-and-acquisitions/dxc-technology-acquires-tribridge
- Micro Focus shares slump as HP deal approaches
Micro Focus’s executive chairman has dismissed a sharp drop in the technology company’s shares as investors nervously approached its huge takeover of Hewlett Packard’s software division.
The FTSE 100 group’s share price fell by 8.1pc despite its full-year results being in line with market expectations, with shareholders wavering ahead of the $8.8bn (£6.8bn) acquisition of HP Enterprise Software, an arm of the US tech giant.
The takeover, which is due to go through on September 1, will be one of Britain’s biggest ever technology deals, with the HP business accounting for more than half of the combined company’s revenues.
http://www.telegraph.co.uk/technology/2017/07/12/micro-focus-shares-slump-hp-deal-approaches/
- Amazon wasn’t the only company that tried to buy Whole Foods
The document cites a “Company X” that expressed interest in having exploratory conversations in mid-April, but did not make a formal offer. Reuters has identified that company as Albertsons groceries.
Artificial Intelligence
- Microsoft to use AI to assist the blind, fix bias, and rescue the planet
In order to make sure that further developments are pursued in the proper fashion—accessible and inclusive to everyone—Microsoft also noted that it is working on an Ethical Design Guide for AI product development, based on CEO Satya Nadella’s 10 principles for AI development.
“As technology that uses AI gets smarter, we want to ensure that we take a responsible approach to our progress – and one that will ultimately provide the most benefit to our customers and to society as a whole,” Shum said at the event.
- Jefferies gives IBM Watson a Wall Street reality check
Jefferies pulls from an audit of a partnership between IBM Watson and MD Anderson as a case study for IBM’s broader problems scaling Watson. MD Anderson cut its ties with IBM after wasting $60 million on a Watson project that was ultimately deemed, “not ready for human investigational or clinical use.”
The MD Anderson nightmare doesn’t stand on its own. I regularly hear from startup founders in the AI space that their own financial services and biotech clients have had similar experiences working with IBM.
The narrative isn’t the product of any single malfunction, but rather the result of overhyped marketing, deficiencies in operating with deep learning and GPUs and intensive data preparation demands.
https://techcrunch.com/2017/07/13/jefferies-gives-ibm-watson-a-wall-street-reality-check/?ncid=rss
IBM’s Watson, Despite Hype, Outgunned in A.I., Says JefferiesKisner compiles his own estimates for Watson and finds them “somewhat disappointing for investors,” with IBM in the best scenario “barely recouping its cost of capital.”
“From an EPS perspective, it seems unlikely to us under almost any scenario that Watson will generate meaningful earnings results over the next few years,” he writes. “In our Base case, Watson and associated “pull-through revenue” contributes 3% to Consensus EPS in 2019; in the Bull case, it’s still only 5%.”
http://www.barrons.com/articles/ibms-watson-despite-hype-outgunned-in-a-i-says-jefferies-1499896835
- OpenText launches Magellan, an AI platform aimed at IBM’s Watson
OpenText is using an open source approach with Magellan with integration with Apache Spark and MLlib, a machine learning library. “We are combining the strengths of OpenText and the open source community,” said Adam Howatson, chief marketing officer at OpenText.
Magellan’s approach will be to enable customers to leverage open source intellectual property and algorithms as well enabling companies to build their own models. Howatson added that OpenText’s Magellan platform will have a lower price point, be available as an appliance and be available on premises or via the cloud.
http://www.zdnet.com/article/opentext-launches-magellan-an-ai-platform-aimed-at-ibms-watson/
OpenText CEO on AI: Buying IBM may cost you your job (LMAO Mark Barrenechea)In a press conference following the announcement, Channelnomics asked Barrenechea how opportunities Magellan enables for resellers differs from those enabled by IBM Watson. The CEO responded by saying that while he’s doubtful of the idea of robots resulting in the loss of IT jobs, buying IBM technology may yield a different result.
“I do think you lose your job if you buy IBM, and it’s our mission to crush that theme,” Barrenechea said. “That old adage ‘If you buy IBM you won’t lose your job’, I think, is dead. They are locked into their little swim lanes, and opening up insights into all those transactional systems is going to be very hard for them. It’s certainly proving to be massively expensive.”
The CEO claimed that IBM Watson’s information lake is a “swamp of data”, adding that Magellan is different in its centric applications, focus on automation, AI and APIs and integration between transaction and AI system.
https://www.channelnomics.com/channelnomics-us/news/3013620/opentext-launches-ai-rival-to-ibm-watson
Cloud
- Workday finally pops for a PaaS – 10 questions it needs to answer
In an unusual move, Aneel Bhusri Workday CEO took to the company’s blog to announce an intention for Workday to offer a platform upon which partners can extend the core Workday applications.
If we take the example of Salesforce, that company has never had intentions of entering certain verticals or, for that matter, certain horizontals but by offering a platform (Force.com) upon which developers can knock themselves out, Salesforce has spawned a multi-billion dollar ecosystem from which it too benefits. The most immediate examples that spring to mind are Apttus in CPQ, FinancialForce in financials and Rootstock in manufacturing, all of which are built upon Salesforce’s PaaS.
Datacenter
- Dell struggling after EMC purchase
The $67-billion deal closed last September, so the new partnership is still in its very early stages, but early indications are that the arrangement hasn’t yet fared well, said Will Mitchell, a professor of strategic management at the Rotman School of Management at the University of Toronto.
“It doesn’t mean that he can’t turn it around, but it better happen fast,” Mitchell said of Dell Founder, Chairman and CEO Michael Dell.
Dell’s losses have actually only grown since the EMC deal went through. The company lost $1.5 billion In the first quarter of fiscal 2018, which ended in May. In the same quarter the year prior, Dell lost $139 million.
- HPE wants to grow again, announces new products and services to do it
Whitman said that, according to IDC, more than half of enterprises have, or are considering bringing workloads back on-prem from the public cloud, thanks to what she referred to as the cloud cliff.
“The cloud is absolutely the right choice for certain applications and use cases,” she said. But at some point, “they hit what we call the cloud cliff, where either for reasons of control, security, performance or cost, the platform they went with is no longer the best option.” That’s when moving to a hybrid environment makes sense.
Also:
While HPE has spun off its enterprise services into DXC, it still retains a robust technology services organization. Now branded Pointnext, HPE says it “helps customers harness the power of hybrid IT, real-time data and analytics, and mobile solutions to enhance customer experiences, create and deliver new digital product and services, and improve core operations at unprecedented speed and efficiency.”
Software/SaaS
- IBM: A Future Blockchain Leader?
Given the low level of blockchain maturity in general, as well as specific IBM blockchain projects (more on these in the succeeding sections) being in their initial stages, it is too early to assess revenue from specific solutions. However, given the traction that IBM’s cloud-as-a-service offering seems to be getting with over 400 client engagements, blockchain has the potential to become one of the fastest-growing sources of revenue starting in 2017, when many of the first IBM enterprise applications are scheduled to roll out.
https://seekingalpha.com/article/4086778-ibm-future-blockchain-leader
Other
- Millions of Verizon customers affected by security breach
Verizon confirmed that a recent security incident exposed the personal identification numbers and other private information pertaining to millions of telecom customers.
Six million unique Verizon user accounts were affected by a data breach suffered by a third-party vendor detected last month, Verizon said Wednesday.
UpGuard, a Silicon Valley security firm that first reported the data breach, said as many as 14 million Verizon accounts may have been affected.
http://www.washingtontimes.com/news/2017/jul/13/millions-verizon-customers-impacted-security-breac/
- Paying Professors: Inside Google’s Academic Influence Campaign
Google has paid professors whose papers, for instance, declared that the collection of consumer data was a fair exchange for its free services; that the company didn’t use its market dominance to improperly steer users to Google’s commercial sites or its advertisers; and that it hasn’t unfairly quashed competitors. Several papers argued that Google’s search engine should be allowed to link to books and other intellectual property that authors and publishers say should be paid for—a group that includes News Corp, which owns the Journal. News Corp formally complained to European regulators about Google’s handling of news articles in search results.
- Microsoft CIO Jim DuBois departs amid layoffs; Kurt DelBene named chief digital officer
DuBois was on sabbatical and decided to leave Microsoft as part of the reorganization of its global sales staff, which also includes thousands of job cuts. DuBois was named CIO in 2013, and he had been with Microsoft since 1993, where he worked in a variety of roles, mostly focused on information technology.
Kurt DelBene is stepping up to fill the void of DuBois’ departure under his new title of chief digital officer. DelBene currently focuses on corporate strategy, and his new role will also see him working closely with core engineering teams across the company as well as IT. DelBene will also oversee the company’s digital transformation efforts.
- Microsoft’s Calibri font is at the center of a political scandal
Pakistan’s government is in trouble. And its fate may hinge on a Microsoft font. Judicial investigators probing the financial assets of the country’s Prime Minister and his family allege his daughter (and apparent successor) forged documents to hide her ownership of overseas properties. How did they reach that conclusion? The documents from 2006 submitted by Maryam Nawaz (daughter of PM Nawaz Sharif) were in the Calibri font. That font, according to the investigation team’s leaked report, wasn’t publicly available until 2007.
https://www.engadget.com/2017/07/12/microsoft-calibri-pakistan-fontgate/
- Accenture handed $26M in Centrelink payments system overhaul
Accenture Australia has been granted just over $26 million by the Government for the provision of systems integration services as part of the Department of Human Services’ landmark Centrelink payments system overhaul.
Accenture’s latest purchase order for the project, the contract terms of which run from 26 May to 28 February 2018, was awarded via the Department of Human Service’s ‘Systems integrators for the provision of services related to WPIT [Welfare Payment Infrastructure Transformation]’ procurement panel, according to tender documents.
https://www.arnnet.com.au/article/621596/accenture-handed-26m-centrelink-systems-overhaul/
Photo: danist soh
Supplier Report: 7/7/2017
Microsoft is looking to reduce their sales force by 3000 heads in order to streamline cloud sales. Several reports are stating that this is not a cost cutting move by Microsoft, but rather a refocus.
Some news outlets are questioning IBM’s understanding of potential problems widespread AI implementation could cause. IBM’s position of AI acting as job-enhancers instead of an instrument of elimination is coming under fire.
More stories of inappropriate behavior of Silicon Valley leadership are making the news. It this really a systematic cultural issue or perception caused by a handful of bad people?
Acquisitions
- Baidu acquires natural language startup Kitt.ai, maker of chatbot engine ChatFlow
China’s search giant Baidu has made another acquisition to continue its push into artificial intelligence, and specifically to help it carve out a place for itself as a platform for developers who want to create chatbots and other services based on natural language technology.
Baidu has acquired Kitt.ai, a profitable startup based out of Seattle that has developed a framework to build and power chatbots and voice-based applications across multiple platforms and devices (presumably named after this Kitt).
https://techcrunch.com/2017/07/05/baidu-acquires-natural-language-startup-kitt-ai-maker-of-chatbot-engine-chatflow/
Baidu forms global alliance to accelerate AI adoption in self-driving carsRather than produce self-driving cars itself, Baidu is banking on the open-source platform to “export its technology capability and integrate resources” for a “win-win situation” as artificial intelligence is set to reshape the entire car manufacturing industry, said Lu Qi, chief operating officer of the Nasdaq-listed Baidu.
- Cisco is relieved the FTC stepped in to protect it from its competitor
The problem is Broadcom makes a lot of chips for all sorts of networking products, and one of its big customers is Cisco. Right from the start, Broadcom said it would sell off Broadcom’s general networking equipment business. It didn’t want to give the impression that it was competing with its customers. It wanted Brocade for its storage business.
But Cisco wasn’t exactly comfortable with that idea and the FTC agreed. Broadcom proposed one more restriction: it said it would also “firewall off” the chip-making unit working with Cisco products from Brocade. It agreed that any information about the chips it manufacturers for Cisco cannot somehow find their way into the hands of the Brocade unit, to be used to compete against Cisco.
http://www.businessinsider.com/cisco-happy-ftc-will-limit-broadcom-with-brocade-2017-7
- Forrester: Apple Should Buy IBM (LMAO)
A critical weapon in this war is natural language processing, a form of artificial intelligence. NLP enables machines to accurately understand the human voice, make sense of personal requests, and form credible answers. Amazon leads with Alexa, Google is a close second with Google Home, and Microsoft’s entry is Cortana. Apple’s perpetually annoying and undependable Siri has fallen behind.
Artificial Intelligence
- IBM Is Clueless About AI Risks
“The crux of its argument is that IBM knows more about AI and about economics than the ‘fearful prophets’ and that any mention of risks is a dangerous, Luddite fallacy,” said Russell.
On the economics of employment risks, Russell pointed to several “fearful prophets,” including Nobel laureates Robert Shiller, Mike Spence, and Paul Krugman; Klaus Schwab, head of the World Economic Forum; and Larry Summers, former Chief Economist of the World Bank and Treasury Secretary under Bill Clinton. “I don’t think one can dismiss their arguments with ad hominem insults,” said Russell. As these thinkers have taken great pains to point out, the pending automation revolution is poised to eliminate countless jobs and displace workers.
http://gizmodo.com/ibm-is-clueless-about-ai-risks-1796549532
- Why old tech is scarier than Hollywood AI
“We have the sci-fi depictions of sentient networks that will turn against us, but the problem is, we’ve already built something way too complex for us to be able to manage as a society,” according to Wendy Nather, principal security strategist at Duo Security. “This is a very shaky foundation that we have to clean out and redo.”
- Salesforce ‘Einstein’ AI can tell when people are angry in texts and emails
The Einstein Intent tool allows programmers to understand the intent of customer inquiries, which could make it easier to automatically route leads, escalate service cases or personalize a marketing campaign through a custom app. This could be particularly useful for prioritizing customer service inquiries.
Traditional keyword-based tools have trouble with complex wording or sarcasm, but this tool is designed to deal with these.
http://www.netimperative.com/2017/07/salesforce-einstein-ai-can-tell-people-angry-texts-emails/
Cloud
- Microsoft reorganizing its sales organization around cloud strategy
Bloomberg reported Friday that Microsoft will cut some jobs and move others around in a reorganization directly impacting two separate divisions of the company. The Worldwide Commercial Business group, led by Judson Althoff, and the global sales and marketing group, led by Jean-Philippe Courtois, will be affected by moves that Bloomberg called “some of the most significant in the sales force in years.”
https://www.geekwire.com/2017/report-microsoft-reorganizing-sales-organization-around-cloud-strategy/
WSJ cuts right to the point: Microsoft to Cut Sales Jobs Next WeekThe exact number of layoffs is unclear, though they will hit staff in offices around the world, this person said. Microsoft more than 121,000 employees at the end of March, the last time the company disclosed its head count.
https://www.wsj.com/articles/microsoft-to-cut-sales-jobs-next-week-1498866092
Microsoft plans up to 3,000 job cuts in a sales staff overhaul to fuel cloud growthThe job cuts amount to less that 10 percent of the company’s total sales force, and about 75 percent of them will be outside the U.S., the company said.
“Microsoft is implementing changes to better serve our customers and partners,” a Microsoft spokesperson told CNBC. “Today, we are taking steps to notify some employees that their jobs are under consideration or that their positions will be eliminated. Like all companies, we evaluate our business on a regular basis. This can result in increased investment in some places and, from time-to-time, re-deployment in others.”
http://www.cnbc.com/2017/07/06/microsoft-will-layoff-thousands-of-employees.html
- This chart shows how painful the shift to cloud computing is for IBM and Oracle
The two technology vendors are set to lose out considerably in IT budgets over the next three years as the result of the shift to cloud, according to the June AlphaWise/Morgan Stanley CIO report. CIOs expect that 46% of their workloads will be in the cloud by the end of 2020, while only 34% will be on-premise.
Between now and then, the 100 US and European CIOs surveyed expect to decrease spending on IBM by 13%, and to decrease spending on Oracle by 11%.
Other
- Europe Is Becoming a Bigger Problem for Silicon Valley
Just Friday, Germany approved new legislation imposing €50 million fines on social-media companies that fail to quickly remove hate speech and terrorist content—over strident opposition from Facebook Inc. and other tech companies, which advocate self-regulation to tackle those problems. That step followed the €2.42 billion ($2.76 billion) fine that the European Union’s executive arm levied this week against Alphabet Inc.’s Google for abusing its dominance as a search engine.
Also
One factor in the policing has been tech firms’ disruption of traditional industrial giants in Europe. In response, many legacy players have lobbied for new rules and tougher enforcement against the interlopers—and found open ears. European telecom firms, angry about seeing their revenue from text messages undercut by chat apps, were among the first to advocate new legislation to mandate a “level playing field.”
https://www.wsj.com/articles/europe-is-becoming-a-bigger-problem-for-silicon-valley-1498849603
- Amazon Plans to Join Red Hat and GE in Boston’s Hottest Tech Hub
Seattle-based Amazon, a giant in retail and cloud computing, will take 150,000 square feet former warehouse right by the Fort Point Channel, which separates Boston from South Boston, according to the report.
This week, Red Hat (RHAT) officially launched a new engineering lab and briefing center in South Boston. And part of the reason Progress Software bought Kinvey, an application development specialist, is to use that company as a downtown Boston center. Progress, itself, is based in the Boston suburbs.
- Dave McClure resigns as general partner of 500 Startups funds
Dave McClure has resigned as a general partner of all funds and entities managed by 500 Startups, the seed investment group he founded in 2010, Axios has learned. The move comes after several women accused McClure of inappropriate behavior.
https://www.axios.com/exclusive-dave-mcclure-resigns-as-general-partner-of-500-startups-2452701900.html
McClure: I’m a Creep. I’m Sorry.I made advances towards multiple women in work-related situations, where it was clearly inappropriate. I put people in compromising and inappropriate situations, and I selfishly took advantage of those situations where I should have known better. My behavior was inexcusable and wrong.
- Samsung Reduces Its Global Workforce Due To Restructuring
Samsung, one of the largest electronics company in the world, was forced to reduce its global workforce due to the restructuring of its business operations in China, based on company data. The data shows that the electronics giant has reduced the number of its employees in 2016 by 5.2 percent, from 325,677 down to 308,745. In its South Korean home base, Samsung has cut down its workforce by 3.8 percent and is now down to 93,204 while it slashed the number of its employees abroad by 5.8 percent and is now currently 215,541. It was in China where the largest workforce reduction was implemented in 2016 where the labor force was slashed down by 17.5 percent and is now down to just 37, 070. However, the North and South American workforce experienced an increase in employee numbers by 8.5 percent, and now count 25,988 employees.
https://www.androidheadlines.com/2017/07/samsung-reduces-global-workforce-due-restructuring.html
Photo: Alexandre Chambon
Supplier Report: 6/30/2017
There is another ransomware threat that has been unleashed upon unsuspecting corporations. “Petya” is even more focused on locking down corporate infrastructure than predecessor “WannaCry”.
IBM is recovering nicely from their WhatsApp loss a few weeks back. They are finally scoring some blockchain wins on Wall Street, they are working on an AI super computer with the Air Force, and they landed (pun intended) a cloud contract with American Airlines.
The EU is hitting Google with a $2.7B fine over anti-trust concerns at the same time the company announced they aren’t scanning your email for personalized ad targeting anymore. Google also announced they are removing medical records from search results because… that was a thing apparently?
Acquisitions
- SoftBank’s $100 billion vision fund eyes quantum computing
SoftBank Group Corp.’s $100 billion Vision Fund is scouting for possible investments in quantum computing, an experimental science being researched by companies such as Google and IBM to succeed current computer processor technology. Shu Nyatta, who helps invest money for the fund, said the group wanted to find and back the company whose quantum computing hardware or software that runs atop it would become the “de facto industry standard.” “We are happy to invest enough to create that standard around which the whole industry can coalesce,” Nyatta said, speaking during a panel discussion at a conference on quantum computing in Munich Thursday.
- Sprint Enters Into Exclusive Talks With Charter, Comcast On Wireless
DealOne arrangement that has been considered is for Charter and Comcast to invest in improving Sprint’s network in exchange for favorable terms to offer wireless service using the carrier’s network, the people said. Such a deal could involve the companies taking an equity stake in Sprint, some of the people said. The cable companies already have such a network-resale agreement with Verizon Communications Inc., but the Sprint deal could provide much better terms.
- Apple acquires SMI eye-tracking company
Apple has acquired SensoMotoric Instruments (SMI), an eye-tracking firm, MacRumors reports.
The German company, which was founded in 1991, has done significant work in eye-tracking research with proprietary eyeglass hardware while also working on consumer-focused applications like eye-tracking for virtual reality. Last year, the company announced it had created an eye-tracking development kit for the HTC Vive VR headset.
https://techcrunch.com/2017/06/26/apple-acquires-smi-eye-tracking-company/?ncid=rss
- Microsoft To Acquire Cloud Cost Optimization Vendor Cloudyn
Microsoft said the acquisition fits with its commitment to provide customers with the tools they need to govern their cloud adoption and realize the strategic benefits of a global, intelligent cloud system.
In April Calcalist, an Israeli business web site, said Microsoft and Cloudyn were discussing an acquisition for between $50 million and $70 million.
Artificial Intelligence
- The Air Force and IBM are building an AI supercomputer
IBM and the USAF announced on Friday that the machine will run on an array of 64 TrueNorth Neurosynaptic chips. The TrueNorth chips are wired together like, and operate in a similar fashion to, the synapses within a biological brain. Each core is part of a distributed network and operate in parallel with one another on an event-driven basis. That is, these chips don’t require a clock, as conventional CPUs do, to function.
https://www.engadget.com/2017/06/23/the-air-force-and-ibm-are-building-an-ai-supercomputer/
- Leveraging cloud for AI success
The cloud can be configured to use GPU accelerators for machine learning algorithms. GPU is a form of accelerated computing that allows graphic processors to supplement traditional processors on complex calculations – such as those involved in machine learning and algorithm training. GPUs break the previous barriers that limited parallel processing of AI applications.
http://www.zdnet.com/article/leveraging-cloud-for-ai-success/
- IBM, Cornell University To Use Artificial Intelligence To Make Dairy Safe
By sequencing and analyzing the DNA and RNA (genetic code) of food microbiomes, researchers plan to create new tools that can help monitor raw milk to detect anomalies that represent food safety hazards and possible fraud.
While many food producers already have rigorous processes in place to ensure food safety hazards are managed appropriately, this pioneering application of genomics will be designed to enable a deeper understanding and characterization of microorganisms on a much larger scale than has previously been possible.
- Microsoft says its AI took a data scientist’s job
Much of the conversation about machine learning taking jobs focuses on the future, but Microsoft boasted its cloud service has already managed to claim one human’s position. The Custom Decision Service, which the company introduced at its Build conference last month, took over at one of Microsoft’s customers, according to Jennifer Chayes, a distinguished scientist at the company’s research arm.
“One of the startups, they were really pressed for funds, got rid of their one data scientist because this worked so much better than their data scientist,” she said during an on stage interview at a Bloomberg event in San Francisco today.
https://venturebeat.com/2017/06/22/microsoft-says-its-ai-took-a-data-scientists-job/
Cloud
- Oracle CEO Mark Hurd: ‘We’re different than Amazon’
“We’re different than Amazon. Amazon offers infrastructure, and they started in infrastructure. We’re a differentiated intellectual property company. We make applications. We make platforms, databases, Java, business intelligence, analytics, machine-to-machine capability embedded in those applications,” he said.
“I would guess a quarter of the world’s infrastructure has a piece of Oracle IP running on top,” said Hurd.
http://www.cnbc.com/2017/06/22/ceo-mark-hurd-oracle-is-different-than-amazon.html
- American Airlines taps IBM once again for ‘massive’ cloud shift
The airline industry has struggled to modernize its infrastructure, and as a result has suffered a number of recent computer failures. By moving to the cloud, AA hopes to avoid similar problems while also improving the customer experience, business processes and communications.
Once the airline is migrated off its legacy infrastructure, it can rely on IBM as its services provider to ensure applications stay running. With more bandwidth, and dedicated infrastructure staff, AA will hopefully not have to deal with large-scale and damaging outages.
http://www.ciodive.com/news/american-airlines-taps-ibm-once-again-for-massive-cloud-shift/445876/
Datacenter
- IBM: Is The Cloud Swallowing the Mainframe?
“A key near-term debate among investors is whether the anticipated release of a new mainframe can help IBM achieve a back-end-loaded second half.”
Mainframes are just 3% of total revenue, and 2% of profit, he notes, annually, but the whole “platform” of a mainframe, including storage, software, support contracts, and services that go with it, were nearly a quarter of IBM’s revenue last year, and 40% of profits.
If mainframe sales “decline steadily” in coming years,” it could hurt profit: “if mainframe is ~40% of company profits, and mainframe hardware falls in half over the next 15 years (about a 4% decline per year), this would negatively impacting IBM’s installed base of mainframes by about 25%, and impact mainframe profits by potentially 30%.”
http://www.barrons.com/articles/ibm-is-the-cloud-swallowing-the-mainframe-asks-bernstein-1498251908
Software/SaaS/Security
- ‘Petya’ Ransomware Hits At Least 65 Countries; Microsoft Traces It To Tax Software
Like WannaCry, the Petya ransomware demands a $300 bitcoin payment to retrieve encrypted files and hard drives. As of Wednesday morning Eastern time, the account had received around $10,000. But in a move that has caused some controversy, German email company Posteo blocked the email address the Petya hackers were using to confirm ransom payments. While some cybersecurity experts have praised the approach, others note that users whose files are held hostage have now lost their sole point of contact.
WannaCry was largely undone by the discovery of a “kill switch” that could shut it down. No such kill switch has been found so far with Petya, and experts are still working to find a way to stop it.
- IBM landed a big win in the race to sell blockchain to Wall Street
IBM has been selected to build a new blockchain-based international trading system for a consortium of global banks, a major win for the tech giant in the race to sell blockchain to Wall Street.
The contract is a significant win for IBM as it means the tech company’s blockchain platform — dubbed Hyperledger Fabric — will be used to build the system. That likely means lucrative servicing contracts for IBM and may make banking execs more likely to commission more Hyperledger-based products and services once they’re familiar with the system.
- Box, Microsoft announce partnership to co-sell products
The companies will cooperate to co-sell Box with Azure and will work to integrate Azure’s AI and machine learning tech with Box’s content management platform.
Box’s document storage service competes with some Microsoft Office 365 products and uses Amazon Web Services, Azure’s competitor, as a backup.
https://seekingalpha.com/news/3275746-box-microsoft-announce-partnership-co-sell-products
Wait… doesn’t IBM have a strategic partnership with Box to do the same exact thing? Box must be doing something right to have all these companies doing their sales work for them.
Other (aka the Google section)
- Google Slapped With $2.7 Billion EU Fine Over Search Results
Antitrust experts and tech executives say that question arises in areas where tech giants have introduced major innovations—like Google’s search engine—that become gateways to the internet. EU regulators worry that tech firms, by inserting themselves into such a key role of funneling and directing consumer traffic, could take unfair advantage.
https://www.wsj.com/articles/google-slapped-with-2-7-billion-eu-fine-over-search-results-1498556971
Yelp, Oracle and News Corp have signed a letter supporting EU action against GoogleSeven U.S. companies and industry groups have signed a letter in support of the European Union fining Google more than $1 billion for allegedly favoring its own shopping service over others in search results.
https://www.recode.net/2017/6/26/15878518/yelp-oracle-news-corp-letter-supporting-eu-action-against-google-antitrust
Of course Oracle signed the letter… - Google begins removing private medical records from search results
The leaking of private medical records can be extremely damaging to the victims, both financially and emotionally, with future prospects affected and private lives of the vulnerable exposed. Given that Google’s indexing system will capture anything that’s publicly accessible on the internet, leaks such as those created by an Indian pathology lab which uploaded more than 43,000 patient records in December, including names and HIV blood test results, can be particularly damaging.
- Google now has all the data it needs, will stop scanning Gmail inboxes for ad personalization
Google won’t stop showing ads in Gmail, though, and it’s worth noting that given how much the company already knows about all of its users, it just might not need these additional signals from Gmail. And maybe they even turned out to be relatively useless or even detrimental for ad performance.
- Toshiba misses self-imposed deadline for chip unit sale, sues Western Digital
On one hand, Tsunakawa lambasted the Western Digital at the shareholders meeting, saying it had been interfering in the sale. But the head of Toshiba’s chip unit also said the Japanese company was prepared to make concessions and hoped to resolve the dispute as soon as possible.
Toshiba argues that Western Digital’s bid for the memory unit presents anti-trust issues and is too low in price.
Western Digital has said it offer meets the 2 trillion yen ($18 billion) minimum demanded by Toshiba – a figure that appears to match the amount offered by the preferred bidder.
http://www.reuters.com/article/us-toshiba-accounting-idUSKBN19I308
Photo: Stephanie McCabe