Supplier Report: 10/29/2016

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IBM had a big week due to their World of Watson conference. As one would imagine, an event called the World of Watson was heavily focused on AI and how it will integrate into our lives. They also used the event to announce the acquisition of another cloud-focused company.  But IBM better watch out because Google’s Deepmind created an encryption protocol by itself.

There was also an OpenStack conference this week for cloud services. The event tested the ability to easily switch between 16 different cloud providers.

IBM announced it was much cheaper to support Macs over Window machines (which is actually old news), but Microsoft introduced some beautiful new desktops.

Acquisitions

  • IBM To Acquire Sanovi Technologies For Hybrid Clouding

    The announcement for the procurement event held on October 27, 2016, carried off with a deal which would help IBM to enhance its elasticity capabilities. It would further support to meet the complexities of the hybrid environment through advanced analytics. The following deal would help IBM to boost its Software Defined Resiliency strategy, delivering Business Continuity, along with providing Disaster Recovery services for its clients who are in the middle of hybrid and digital cloud transformation.

    http://www.investopedia.com/stock-analysis/102816/ibm-buys-another-hybrid-cloud-specialist-ibm.aspx
    Also:

    US software giant IBM on Thursday announced that it has signed a deal to acquire Bengaluru-based Sanovi Technologies for an undisclosed sum. The deal would enable IBM to bolster its Software Defined Resiliency strategy, delivery of Business Continuity and Disaster Recovery services for clients who are undergoing digital and hybrid cloud transformation.

    http://www.ibtimes.co.in/ibm-buys-bengaluru-based-hybrid-cloud-firm-sanovi-technologies-701488

  • AT&T’s Time Warner Deal Comes at a Huge Cost

    AT&T’s deal values Time Warner at 22 times the cash it generated from its operations. That seems high. When Comcast bought NBCUniversal in 2013 it paid around 8 times operating cash flow. WhenVerizon bought AOL in 2015, a number of commentators suggested that it had paid through the roof for the former Internet whiz kid. But even in that deal, Verizon only paid about 9 times AOL’s adjusted operating income.

    http://fortune.com/2016/10/24/att-time-warner-deal-share-price/

  • Who Will Win This $9 Billion Game Of Chicken?

    Who, if anyone, will blink? NetSuite’s weak quarter make it decreasingly likely that Oracle’s Larry Ellison will blink first. As for T. Rowe, they might not either. They opposed the Dell LBO and intended to vote against it (their shares were mistakenly voted for it, so perhaps they will tender to Oracle by accident). But with no available alternative to realize more value than the current deal, both NetSuite and T. Rowe holders will quickly regret it.

    http://seekingalpha.com/article/4014664-will-win-9-billion-game-chicken

  • Oracle CEO Hurd Says NetSuite Deal ‘Done from Our Perspective’

    “Well it’s done from our perspective. We had special boards, special committees of both boards negotiate the transaction. We think we’ve made a fair offer of $109 a share,” he said.

    https://www.thestreet.com/story/13868773/1/oracle-orcl-ceo-hurd-says-netsuite-deal-done-from-our-perspective.html

Artificial Intelligence

  • The World of Watson
    Talking points from the 2 hour video:

    1. Watson will be almost everywhere in 5 years.  It will be in doctors offices and assist companies with M&A (it will have profiles on every company on the planet).
    2. John Kelly predicts that due to Watson’s modeling abilities, it will be able to predict future events in medical applications.
    3. Tom Friedman states that 2008 was a milestone year in technology, in part due to Watson and the advent of cloud technology (high speed internet, cheaper storage) and we missed it for what it really is and society has been stuck not taking advantage of it.
    4. Due to this technology, human interaction and sharing ideas has never been higher and the potential for quicker social change is more possible.
    5. Friedman goes down an interesting path of how people (not nations) have the ability to destroy and also repair everything (you just have to watch it).
    6. The video then shifts to new speakers doing their best Steve Jobs impressions talking about managing data via AI (nothing we haven’t discussed here already).

  • IBM, Teva to Use A.I. for Drug Repurposing Program

    First, the companies formed a three-year research collaboration aimed at using human input, real-world data, and machine learning algorithms to support drug repurposing efforts, wrote FierceBiotech.

    Watson will sift through all of this information to try and find relationships between drug molecules and certain diseases. A successful initiative like this could install an efficient, cost-effective process that the entire pharmaceutical industry can adopt to help bring new therapies to market.

    https://www.rdmag.com/article/2016/10/ibm-teva-use-ai-drug-repurposing-program

  • Google’s AI created its own form of encryption

    As the New Scientist reports, Abadi and Andersen assigned each AI a task: Alice had to send a secret message that only Bob could read, while Eve would try to figure out how to eavesdrop and decode the message herself. The experiment started with a plain-text message that Alice converted into unreadable gibberish, which Bob could decode using cipher key. At first, Alice and Bob were apparently bad at hiding their secrets, but over the course of 15,000 attempts Alice worked out her own encryption strategy and Bob simultaneously figured out how to decrypt it. The message was only 16 bits long, with each bit being a 1 or a 0, so the fact that Eve was only able to guess half of the bits in the message means she was basically just flipping a coin or guessing at random.

    https://www.engadget.com/2016/10/28/google-ai-created-its-own-form-of-encryption/

Cloud

  • ‘Unprecedented’ cyberattack involved tens of millions of IP addresses

    The attackers took advantage of traffic-routing services such as those offered by Alphabet Inc’s Google and Cisco Systems Inc’s OpenDNS to make it hard for Dyn to root out bad traffic without also interfering with legitimate inquiries, Drew said.

    But hundreds of thousands, and maybe millions, of those security cameras and other devices have been infected with a fairly simple program that guessed at their factory-set passwords – often “admin” or “12345” or even, yes, “password” – and, once inside, turned them into an army of simple robots. The company also has offices in England and Singapore, and field operations across several USA cities, including San Francisco and Seattle.

    http://crcconnection.com/2016/10/24/unprecedented-cyberattack-involved-tens-of-millions-of-ip.html

  • Switching clouds: What Spotify learned when it swapped AWS for Google’s cloud

    “Now that we’ve done the move, we are generally really happy but we have some wishes for the future.

    We would love to see cross-continental replication, like the fact we now run in a US Central regional bucket, that causes a slight latency for our European users.

    We ideally would like to have another bucket in Asia. At the moment, the GCS does not allow cross-continental replication.

    We’re also seeing slightly lower cold read latencies than with S3, the good news is that Google has improvements upcoming and we’ve worked with them to shear off 30ms.”

    http://www.techrepublic.com/article/switching-clouds-what-spotify-learned-when-it-swapped-aws-for-googles-cloud/

  • IBM’s cloud move: New unified platform buries SoftLayer under Bluemix brand

    As part of that shift, IBM today also announced its unified cloud platform, allowing customers to manage all Bluemix and SoftLayer assets from a single console using an IBM ID.

    IBM isn’t planning on changing the substance of SoftLayer’s systems, products, services, and support, but it will phase the name out as it moves everything, including the SoftLayer blog over to Bluemix domains.

    http://www.zdnet.com/article/ibms-cloud-move-new-unified-platform-buries-softlayer-under-bluemix-brand/
    Smart. Every time I mention SoftLayer, people ask “what is that?”

  • You can run the same programs on 16 different OpenStack clouds

    Sixteen different vendors did a live demo at OpenStack Summit showing that you could run the same software stack on 16 separate OpenStack platforms.

    Here’s the amazing part. All 16 vendors had the program running on their platforms in under 10 minutes. Try moving your application from say Amazon Web Services (AWS) to Microsoft Azure that easily.

    Don Rippert, IBM’s general manager of cloud strategy, explained, “Yes all 16 companies will compete, but interoperability is a rising tide. It makes things better for all of us.” Jonathan Bryce, the OpenStack Foundation’s executive director, added “SUSE, Canonical, Red Hat, you all hate each other right? But, the program works on all your systems.”

    http://www.zdnet.com/article/you-can-run-the-same-programs-on-16-different-openstack-clouds/

Datacenter/Desktop

  • NetApp boss not deterred by Dell EMC

    When asked whether Dell EMC’s extended reach in the industry would hurt NetApp’s business, Kurian took the stance that bigger wasn’t always better.

    “Very simply, we’re taking share from EMC today. We’re the fastest growing SAN vendor in the market. We’re the fastest growing all-flash array vendor in the market. And despite their reach, we have better solutions,” he said.

    http://www.crn.com.au/news/netapp-boss-not-deterred-by-dell-emc-440089

  • The New Microsoft Surface Studio

Software/SaaS

  • Slack Announces Partnership With IBM

    Watson will be available to Slack’s developers and enterprise users, will work to develop new communication tools, and will be incorporated into Slack’s Slackbot; the customer relations account for the service.

    “Making Watson’s capabilities and Slack’s capabilities available to third-party developers to make those more intelligent,” Slack CEO Stewart Butterfield said about the partnership during Wednesday afternoon’s “Power Lunch” on CNBC.

    https://www.thestreet.com/story/13868522/1/slack-announces-partnership-with-ibm.html

Other

  • IBM official says Macs much cheaper to own than Windows PCs

    Previn also said that while a Mac initially cost from US$117 to US$454 more than a Windows PC that had similar specs, IBM was able to save between US$273 and US$543 over four years per Mac compared to a similarly configured Windows PC.

    When one added up all the software that one had to buy from Microsoft to run and manage IBM’s Windows devices, Windows PCs were thrice as expensive as Macs, he said.

    “It ends up being US$57.3 million more expensive per 100,000 Windows machines, or exactly three times the cost,” he said. “And this is a conservative number. This represents the best pricing we’ve ever gotten from Microsoft.”

    http://www.itwire.com/business-software/75376-ibm-official-says-macs-much-cheaper-to-own-than-windows-pcs.html

  • Microsoft hikes prices for British businesses in wake of Brexit vote

    The tech giant announced in a blog post that it would be raising fees for its UK business clients in order to “realign close to euro levels,” and harmonise prices across the EU.

    “We periodically assess the impact of local pricing of our products and services to ensure there is reasonable alignment across the region and this change is an outcome of this assessment,” Microsoft said.

    While enterprise software prices will increase by 13%, cloud prices will jump by as much as 22% for clients paying in pounds.

    http://www.mirror.co.uk/tech/microsoft-reveals-british-businesses-pay-9116171

  • IBM board approves additional $3 billion stock buyback

    The board today also authorized $3 billion in additional funds for use in the company’s stock repurchase program. IBM said it will repurchase shares on the open market or in private transactions from time to time, depending on market conditions.

    http://www.businesswire.com/news/home/20161025006267/en/IBM-Board-Approves-Quarterly-Cash-Dividend-Authorizes

  • “Dirty COW”, the most dangerous Linux Bug for the last 9 years

    Talking to Ars Technica, Senior Security Researcher at Azimuth Security, Dan Rosenberg states that this particular bug is so far the most serious of all bugs ever found in Linux systems. The fact that this bug has been there for the last 9 years makes the situation even more concerning.

    “It’s probably the most serious Linux local privilege escalation ever. The nature of the vulnerability lends itself to extremely reliable exploitation. This vulnerability has been present for nine years, which is an extremely long period of time,” said Rosenberg.

    https://www.hackread.com/dirty-cow-the-most-linux-bug/

  • Google Jamboard:

    Yeah, this product really doesn’t have a place on this post, but I really want one!

Photo: Robson Hatsukami Morgan

Supplier Report: 10/8/2016

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Nobody wants to buy Twitter, but that isn’t stopping SalesForce, Google, and Microsoft with moving forward with their long term plans.

Internet of Things is trending this week as Microsoft is quietly shutting down their fitness band division, but will they buy FitBit (and what would they do with all of that data)? IBM is dropping $200M on a new IoT HQ in Germany.

There were also a few interesting team-ups this week: VMWare and Amazon on some potential VMWare options on AWS and IBM and AT&T deepening their relationship via cloud services.

Acquisitions

  • Plat.One acquisition marks start of $2B IoT investment plan for SAP

    SAP has bought IoT software developer Plat.One, marking the start of a plan to invest US$2 billion in the internet of things over the next five years.

    Some of those billions will be spent on the creation of IoT development labs around the world, SAP said Wednesday. It already has plans for such labs in Berlin, Johannesburg, Munich, Palo Alto, Shanghai and São Leopoldo in Brazil.

    The company is also rolling out a series of “jump-start” and “accelerator” IoT software packages for particular industries, to help them monitor and control equipment.

    http://www.pcworld.com/article/3124442/internet-of-things/platone-acquisition-marks-start-of-2b-iot-investment-plan-for-sap.html#tk.rss_all

  • Salesforce snaps up Krux for $700M on eve of Dreamforce

    On the eve of Dreamforce, his company’s annual developers shindig, Salesforce agreed on Monday to acquire Krux, a marketing-data start-up, for $700 million in stock and cash. Krux, which already has a partnership with Salesforce, is expected to bolster Salesforce’s ability to better identify and serve its cloud-software customers.

    http://www.usatoday.com/story/tech/2016/10/03/salesforce-snaps-up-krux-700m-eve-dreamforce/91490708/

  • Salesforce Investors Could Derail a Potential Deal for Twitter

    During a CNBC interview on Wednesday with Jim Cramer, Benioff neither confirmed nor denied Salesforce’s interest in Twitter, but didn’t exactly sound as if a deal is certain. “We have to look at everything, we’re going to pass on most things,” he said. Salesforce, which was down over 7% at one point, pared its losses a little following Benioff’s remarks.

    The fact that Twitter is already often used as a marketing and customer service vehicle by many companies — including, presumably, many Salesforce clients — probably isn’t lost on Benioff. Salesforce likely sees value in integrating Twitter with its Marketing Cloud (online marketing automation) and Service Cloud (customer service and enterprise collaboration) software. It also could leverage data on Twitter activity to give clients a better understanding of their customers, as well as engage with them more effectively.

    https://www.thestreet.com/story/13843028/1/salesforce-investors-could-derail-a-potential-deal-for-twitter.html
    Salesforce Should Leave This Bird in the Bush

    A Wall Street Journal report late Tuesday makes clear that Salesforce is still very interested. CEO Marc Benioff has reportedly been talking up Twitter behind closed doors—going so far as to describe the troubled microblogging service an “unpolished gem” at one gathering. Salesforce shares fell another 5% as a result. In all, the prospect of buying Twitter has erased nearly $5 billion in Salesforce’s market value.

    http://www.wsj.com/articles/salesforce-should-leave-this-bird-in-the-bush-1475696224

  • Should Microsoft Buy Fitbit?

    Fitbit isn’t for sale, but that doesn’t mean it can’t be bought. There wasn’t a “For Sale” sign hanging on Skype, Yammer, and more recently LinkedIn when Microsoft cracked open its huge pocketbook to snap up niche leaders. This makes Fitbit a logical target for a company with a history of multi-billion dollar purchases and a market leader that is attainable. Fitbit’s present enterprise value of $2.5 billion would be a light bite for Microsoft, even with a reasonable premium on top of that.

    http://www.fool.com/investing/2016/10/06/should-microsoft-buy-fitbit.aspx

  • Oracle Threatens to End NetSuite Deal

    On Friday, Oracle announced that it extended the expiration data of its tender offer for NetSuite to Nov. 4, having already extended the date to Oct. 6 last month “to facilitate the completion of outstanding antitrust reviews.” In September, Oracle received the final antitrust clearance needed, from the U.S. Department of Justice.

    http://www.wsj.com/articles/oracle-to-call-off-netsuite-deal-unless-shareholder-support-increases-1475849434

Artificial Intelligence

Cloud

Datacenter

  • The Job Cuts Begin: Dell Confirms Layoffs

    “Most cuts are overlap, none strategic and/or not part of the new Dell EMC program. To me very normal and a must once the two firms begin to integrate, gel, morph and then execute as a new technology powerhouse with a focused team that [has] the ‘right’ skill sets to address this new world,” Shepard wrote.

    http://www.crn.com/news/channel-programs/300082351/the-job-cuts-begin-dell-confirms-layoffs.htm

  • Why Red Hat, Inc. Gained 11% in September

    The open-source software specialist saw second-quarter earnings rise 17% year over year, based on 17% stronger sales. Both of these figures were above Wall Street’s consensus estimates. Application development tools led the way with 33% higher sales, and Red Hat customers’ adoption of long-term support subscriptions is pacing ahead of the basic revenue growth.

    http://www.fool.com/investing/2016/10/07/why-red-hat-inc-gained-11-in-september.aspx

Software/SaaS

  • Oracle Will Keep Posting Growth in the SaaS Space

    As we discussed earlier in this series, Microsoft (MSFT) emerged as the leader of overall enterprise SaaS (software-as-a-service) space, and Salesforce (CRM) continues to rule the CRM (customer relationship management) space. It was the Oracle’s dominance in ERP (enterprise resource planning), the segment that grew the most in the SaaS space, that led it to register the highest growth in the SaaS space in 2Q16.

    http://marketrealist.com/2016/10/oracle-will-continue-post-growth-saas-space/

Other

  • IBM Brand Value Collapses 19%

    The failure of IBM’s turnaround continues to smother the business. IBM’s shares are off 17% in the past two years, against a 9% improvement in the S&P 500. IBM’s revenue in 2011 was $106.9 billion. In 2015, the figure fell to $81.7 billion.

    http://247wallst.com/technology-3/2016/10/05/ibm-brand-value-collapses-19/

  • SAS CEO Dr Jim Goodnight on the power of big data, literacy and philanthropy

    “We spend 25 per cent of our revenues on R and D every year, which is more than any other major software company,” says Goodnight, who was a statistics professor at the North Caroline State University when he started working on software for agriculture.

    http://www.cio.co.nz/article/607926/sas-ceo-dr-jim-goodnight-on-the-power-of-big-data-literacy-and-philanthropy/

  • Coupa up 87% in software IPO

    But they’re still not profitable. For the six months ending in July, Coupa lost $24.3 million, which compares to a loss of $25.1 million in the same period last year. Yet revenue is growing, up to $53.2 million from $31.6 million in the same time frames.

    CEO Rob Bernshteyn tells us they are more focused on their margins than profitability right now. “For every dollar we burned, we created well over a dollar in recurring revenue,” he told TechCrunch. He says he’s looking to “build this business for the long-term.”

    https://techcrunch.com/2016/10/06/coupa-up-87-in-software-ipo/?ncid=rss