SourceCast: Episode 132: Buying a JEDI
Supplier Report: 9/21/2018
The trade war with China might actually happen. Alibaba is backing off a promise to bring 1 million jobs to the United States due to President Trump’s impending tariffs. Some believe Jack Ma is using this latest news to back out of something he had no intention of delivering on.
Amazon might have a corporate espionage issue, Intel is having a hard time keeping up with demand, and some trendy tech firms are over San Francisco.
Acquisitions
- Time Magazine Sold to Salesforce Founder Marc Benioff for $190 Million
Nearly eight months after Meredith Corp.completed its purchase of Time Inc., the publisher has agreed to sell Time magazine for $190 million to Marc Benioff, co-founder of Salesforce.com , CRM and his wife Lynne Benioff.
The proposed sale is expected to close within 30 days. The Benioffs are buying Time as individuals; the agreement is unrelated to Salesforce.com, where Mr. Benioff also serves as chairman and co-chief executive.
- Adobe Buys Marketing-Automation Firm Marketo for $4.75 Billion
The deal is expected to add scale to Adobe’s existing marketing-technology capabilities. It also will bolster the company’s clout with business-to-business brands, which make up the bulk of Marketo’s customer base. Reuters earlier reported that Adobe and Marketo were in talks.
- MariaDB acquires Clustrix
MariaDB, the company behind the eponymous MySQL drop-in replacement database, today announced that it has acquired Clustrix, which itself is a MySQL drop-in replacement database, but with a focus on scalability. MariaDB will integrate Clustrix’s technology into its own database, which will allow it to offer its users a more scalable database service in the long run.
https://techcrunch.com/2018/09/20/mariadb-acquires-clusterix/
Artificial Intelligence
- Top Healthcare AI Trends To Watch
AI faces both technical and feasibility challenges that are unique to the healthcare industry. For example, there’s no standard format or central repository of patient data in the United States.
When patient files are faxed, emailed as unreadable PDFs, or sent as images of handwritten notes, extracting information poses a unique challenge for AI.
But big tech companies like Apple have an edge here, especially in onboarding a large network of partners, including healthcare providers and EHR vendors.
https://www.cbinsights.com/research/report/ai-trends-healthcare/
Security
- Your Network Has Been Hacked. You Have 72 Hours to Report It.
The fast turnaround creates a challenge for companies. “The biggest challenge is knowing enough about the incident to actually report it,” says Jim Routh, chief security officer at Aetna Inc. AET -0.25% “We have to do some analysis to figure out what the scope or impact is, and it’s often days before we have that identified.”
Aetna meets that challenge by informing regulators almost immediately upon learning of a possible breach and then updating them as the company learns more, Mr. Routh says.
https://www.wsj.com/articles/your-network-has-been-hacked-you-have-72-hours-to-report-it-1537322400
- Amazon Investigates Employees Leaking Data for Bribes
Employees of Amazon, primarily with the aid of intermediaries, are offering internal data and other confidential information that can give an edge to independent merchants selling their products on the site, according to sellers who have been offered and purchased the data, as well as brokers who provide it and people familiar with internal investigations.
The practice, which violates company policy, is particularly pronounced in China, according to some of these people, because the number of sellers there is skyrocketing. As well, Amazon employees in China have relatively small salaries, which might embolden them to take risks.
https://www.wsj.com/articles/amazon-investigates-employees-leaking-data-for-bribes-1537106401
Software/SaaS
- Oracle missed Wall Street revenue targets and the stock is tumbling.
Business software maker Oracle Corp on Monday missed revenue estimates for the first quarter, as sales in its cloud services and license support unit disappointed, sending its shares down 5 percent in extended trading.
Revenue from the unit, its biggest division by sales, rose 3.2 percent to $6.61 billion, missing the average analyst estimate of $6.71 billion, according to Thomson Reuters I/B/E/S.
https://www.businessinsider.com/r-oracle-first-quarter-revenue-up-1-percent-2018-9
- Oracle Buys Its Way to Stability
About $10 billion was spent during the quarter on 212 million shares, the company said in its conference call. That makes for a record amount for the company in a given quarter and brings the total spent on buybacks over the past 12 months to about $21 billion. Oracle has averaged a little more than $7 billion in buybacks on an annual basis over its past nine fiscal years, according to S&P Capital IQ.
https://www.wsj.com/articles/oracle-buys-its-way-to-stability-1537296117
IBM was doing this for years and only just recently stopped.
Datacenter/Hardware
- Intel’s Shortages Chip Away at Micron
Intel, in other words, has many demanding customers competing for a finite amount of manufacturing capacity. And while the company has already boosted its planned capital expenditure for the year by $1 billion, such facilities can’t be expanded quickly—especially while the company is struggling to shift some of its production to a new, more advanced 10-nanometer process. That makes it difficult to respond to rapid changes in the market, like the recent surprising jump in PC demand. Second quarter PC shipments grew globally for the first time in six years, according to Gartner.
https://www.wsj.com/articles/intels-shortages-chip-away-at-micron-1537512343?ns=prod/accounts-wsj
Other
- Trump Hits China With Tariffs on $200 Billion in Goods, Escalating Trade War
The tariffs on $200 billion worth of products comes on top of the $50 billion worth already taxed earlier this year, meaning nearly half of all Chinese imports into the United States will soon face levies. The next wave of tariffs, which are scheduled to go into effect on Sept. 24, will start at 10 percent before climbing to 25 percent on Jan. 1. The timing of the staggered increase will partially reduce the toll of price increases for holiday shoppers buying Chinese imports in the coming months.
https://www.nytimes.com/2018/09/17/us/politics/trump-china-tariffs-trade.html
Alibaba will no longer bring 1 million jobs to the US, citing tariffsMa told Chinese state-run news outlet Xinhua today that his promise was based on the assumption that the US and China would have “rational trade relations,” which is no longer the case. “This promise was based on friendly US-China partnership and rational trade relations,” Ma said. “The current situation has already ruined that. There is no way to complete the promise now, but we won’t stop working hard to promote the healthy development of China-US trade.” Last week, Ma announced his plans to retire this year and hand over the company to its current CEO. He denied rumors that he was being forced out.
https://www.theverge.com/2018/9/19/17879844/alibaba-us-jobs-tariffs
- Tech expansion: Up and out of SF
The unemployment and office vacancy rates in San Francisco are near historic lows, while tech stocks, including Salesforce, have set new highs. Housing prices continue to soar, with few homes coming on the market. For San Francisco’s fastest-growing businesses, there are two places to put employees: up or out. The answer is often both, with software engineers more typically getting the pricey space in new towers at headquarters and support and sales going to cheaper, roomier cities.
https://www.sfchronicle.com/business/article/For-San-Francisco-s-fast-growing-tech-13227433.php
- Google Employees Are Quitting Over The Company’s Secretive China Search Project
When Poulson resigned in August, he said he only planned to share his concerns about Dragonfly with those inside Google. But when Google didn’t respond to a group of human rights organizations that presented it with a letter arguing that Dragonfly is unethical and asking the company to kill the project, Poulson felt compelled to share his opinion with the public.
“I’m offended that no weight has been given to the human rights community having a consensus,” he said. “If you have coalition letter from 14 human rights organizations, and that can’t even make it into the discussions on the ethics behind a decision, I’d rather stand with the human rights organizations in this dispute.”
https://www.buzzfeednews.com/article/carolineodonovan/google-project-dragonfly-employees-quitting
Supplier Report: 9/14/2018
Microsoft acquired Lobe, a company to help advance their AI strategy and make it accessible to the masses. Making AI easier is critical as there are reports that companies need to start investing in AI now to just keep up with competition in the next 5-10 years.
Companies also need to invest in software developers as CNBC reports that developers are more valuable to corporations than money…
Acquisitions
- Microsoft acquires Lobe, a drag-and-drop AI tool
Microsoft today announced that is has acquired Lobe, a startup that lets you build machine learning models with the help of a simple drag-and-drop interface. Microsoft plans to use Lobe, which only launched into beta earlier this year, to build upon its own efforts to make building AI models easier, though, for the time being, Lobe will operate as before.
“As part of Microsoft, Lobe will be able to leverage world-class AI research, global infrastructure, and decades of experience building developer tools,” the team writes. “We plan to continue developing Lobe as a standalone service, supporting open source standards and multiple platforms.”
https://techcrunch.com/2018/09/13/microsoft-acquires-lobe-a-drag-and-drop-ai-tool/
- Intel acquires NetSpeed Systems to boost its system-on-a-chip business
The company has acquired NetSpeed Systems, a startup that makes system-on-chip (SoC) design tools and interconnect fabric intellectual property (IP). The company will be joining Intel’s Silicon Engineering Group, and its co-founder and CEO, Sundari Mitra, herself an Intel vet, will be coming on as a VP at Intel where she will continue to lead her team.
Terms of the deal are not being disclosed, but for some context, during NetSpeed’s last fundraise in 2016 (a $10 million Series C) it had a post-money valuation of $60 million, according to data from PitchBook.
Artificial Intelligence
- The devilishly quiet age of AI
The era’s winners will be those who are not fooled by the absence of visible change from AI over the next 5-7 years. By the time the fruits of AI investment become clear — after 2025 — it will be extremely difficult to compete with the leading players, says Jacques Bughin and Jeongmin Seong, two co-authors of the report.
AI adoption will add $13 trillion a year to global production, the report said, and an average of 1.2% to global GDP growth per year.
- Google Cloud’s new AI chief is on a task force for AI military uses and believes we could monitor ‘pretty much the whole world’ with drones
Google’s decision to hire Moore was greeted with displeasure by at least one former Googler who objected to Project Maven.
“It’s worrisome to note after the widespread internal dissent against Maven that Google would hire Andrew Moore,” said one former Google employee. “Googlers want less alignment with the military-industrial complex, not more. This hire is like a punch in the face to the over 4,000 Googlers who signed the Cancel Maven letter.”
A Google spokesman declined to comment.
Cloud
- Oracle’s Kurian Is Said to Be at Odds With Ellison on Cloud
The growing strife between Kurian, president of product development, and Executive Chairman Ellison culminated in Kurian’s announcement on Sept. 5 that he’s taking a break, said the people, who asked not to be identified discussing a private matter. Kurian wants Oracle to make more of its software available to run on public clouds from chief rivals Amazon.com Inc. and Microsoft Corp. as a way to diversify from its own struggling infrastructure, a view opposed by Ellison, one of the people said.
https://www.datacenterknowledge.com/oracle/oracles-kurian-said-be-odds-ellison-cloud
Security
- A year later, Equifax lost your data but faced little fallout
“There was a failure of the company, but also of lawmakers,” said Mark Warner, a Democratic senator, in a call with TechCrunch. Warner, who serves Virginia, was one of the first lawmakers to file new legislation after the breach. Alongside his Democratic colleague, Sen. Elizabeth Warren, the two senators said their bill, if passed, would hold credit agencies accountable for data breaches.
“The message sent to the market is ‘if you can endure some media blowback, you can get through this without serious long-term ramifications’, and that’s totally unacceptable,” he said.
https://techcrunch.com/2018/09/08/equifax-one-year-later-unscathed/
Software/SaaS
- Software developers are now more valuable to companies than money: Survey
And yet, despite being many corporations’ most precious resource, developer talents are all too often squandered. Collectively, companies today lose upward of $300 billion a year paying down “technical debt,” as developers pour time into maintaining legacy systems or dealing with the ramifications of bad software.
This is especially worrisome, given the outsized impact developers have on companies’ chances of success. Software developers don’t have a monopoly on good ideas, but their skill set makes them a uniquely deep source of innovation, productivity and new economic connections. When deployed correctly, developers can be economic multipliers — coefficients that dramatically ratchet up the output of the teams and companies of which they’re a part.
- What you need to know ahead of the EU copyright vote
European lawmakers want to extend digital copyright to also cover the ledes of news stories which aggregators such as Google News typically ingest and display — because, again, the likes of Alphabet is profiting off of bits of others’ professional work without paying them to do so. And, on the flip side, media firms have seen their profits hammered by the Internet serving up free content.
The reforms would seek to compensate publishers for their investment in journalism by letting them charge for use of these text snippets — instead of only being ‘paid’ in traffic (i.e. by becoming yet more eyeball fodder in Alphabet’s aggregators).
https://techcrunch.com/2018/09/08/what-you-need-to-know-ahead-of-the-eu-copyright-vote/
- Burger King selects SAP solutions to support growth
The chain will use Cloud-based procurement applications and a business network from SAP Ariba and SAP S/4HANA from SAP to expand its presence and increase revenue.These solutions will assist the restaurant chain to create a digital process to fuel savings, efficiencies and business growth.
Leveraging both solutions, the company will gain insights from the data stored in its supply chains and use them to grow further.
https://www.verdictfoodservice.com/news/burger-king-sap-solutions-growth/
Datacenter/Hardware
- Apple raised the price of its best phone by $330, and no one cares
Two years ago, a brand-new flagship Apple smartphone started at $650. Now, the a compromised version of Apple’s vision will set you back $750. Even though the Xr will likely be more than enough iPhone for most customers, the iPhone X proved that there are loads of people out there willing to pay $999 and up for a truly premium device.
And this year, those with lots of money have even more opportunity to spend: the iPhone Xs Max starts at $1,099 and goes up to an insane $1,449 with 512GB of storage. In 2016, the top-of-the-line iPhone 7 Plus with 256GB of storage cost $929. Not only has Apple raised the cost of a flagship device, it expanded the pricing window for its highest-end phones by more than $500.
https://www.engadget.com/2018/09/13/apple-iphone-xs-xr-price-increases/
Other
- Trump renews call for Apple to make its products in the US
But while moving its manufacturing operations to the US would allow it to skip the tariffs, Apple’s products likely wouldn’t be any cheaper. China is an attractive to tech manufacturing because its workforce is cheaper and the plants that produce individual components are in close proximity to one another. Moving that manufacturing infrastructure would be costly. On Twitter, Trade lawyer Scott Lincicome pointed out that an iPhone would be more expensive to manufacture here in the US, citing a Marketplace report from 2014 that suggested that the component cost of an iPhone in China was around $190 per phone. In the US, that price jumps up to around $600, pushing the device — at the time — to a predicted price of $2000, far more than what would be seen under the tariffs.
https://www.theverge.com/2018/9/8/17835158/trump-twitter-apple-manufacturing-tariffs
- Tough Days for China’s Tech Giants
For Tencent, which makes over 90% of its revenue in China, more government scrutiny has become a reality. Beijing has been holding up approvals for new games and sales of in-game items like virtual weapons—Tencent makes around half its annual revenue from the latter. The freeze caused the company’s first year-over-year profit decline since the last quarter in 2005.
This doesn’t seem like a hiccup. Beijing last week said it will continue limiting videogame releases and set restrictions on young people’s playing time, while state media has been repeatedly lambasting game companies for creating social problems. Nasdaq-listed Baidu, too, has been reprimanded for hosting content that threatens China’s “social order.”
https://www.wsj.com/articles/tough-days-for-chinas-tech-giants-1536312601?ns=prod/accounts-wsj
- Tim Armstrong to depart as CEO of Verizon’s Oath
Verizon’s head of media and advertising Tim Armstrong will leave at the end of the year, the company announced Wednesday. CNBC reported Armstrong was in talks to leave as of Sept. 7.
Armstrong came to Verizon in 2015 as part of the acquisition of AOL, where he was CEO. The company later bought Yahoo and combined the two divisions into a digital advertising unit called Oath but those efforts have yet to produce significant growth. Verizon has decided to integrate Oath more fully with the rest of the company’s operations, according to a recent Wall Street Journal report, despite recent discussions about spinning off Oath into a separate business.
Oath president and COO K. Guru Gowrappan will “assume all management responsibilities” as chief executive effective Oct. 1, the company said in a release.
https://www.cnbc.com/2018/09/12/tim-armstrong-out-at-verizons-oath.html
Photo by Jason Leung on Unsplash
Supplier Report: 9/1/2018
The fight between Oracle and Google isn’t over… according to Google. The company vows to fight the most recent software ruling (in favor of Oracle) all the way to the Supreme Court.
Apple bought a company focused on AR lenses. Will the company release “Apple Glass” and pretend they were first and everyone wearing AR glasses looks cool?
Microsoft is requiring suppliers in their supply chain to give employees paid family leave. This is another example (after Apple) of how a large company can promote benefits and well being outside of their organization.
Acquisitions
- Apple buys startup focused on lenses for AR glasses
Apple confirmed it acquired Longmont, Colorado-based Akonia Holographics. “Apple buys smaller companies from time to time, and we generally don’t discuss our purpose or plans,” the iPhone maker said in a statement.
Akonia could not immediately be reached for comment. The company was founded in 2012 by a group of holography scientists and had originally focused on holographic data storage before shifting its efforts to creating displays for augmented reality glasses, according to its website.
- Cognizant to Acquire SaaSfocus to Expand Salesforce Cloud Consulting Capabilities
Cognizant (Nasdaq : CTSH ) today announced it has agreed to acquire SaaSfocus, a privately-held consulting firm specializing in digital transformation, leveraging the Salesforce Platform. The transaction is expected to close in the fourth quarter of 2018, subject to certain closing conditions. Financial details were not disclosed.
SaaSfocus is one of the largest independent Salesforce Platinum consulting partners in the Asia-Pacific (APAC) region with operations across Australia and India. The acquisition will expand Cognizant’s end-to-end digital transformation services and Salesforce cloud capabilities in these growing markets.
- Trump says Amazon, Facebook, and Google represent a ‘very antitrust situation’
“I won’t comment on the breaking up, of whether it’s that or Amazon or Facebook,” Trump said, replying to a question on whether tech companies like Facebook and Google should be regulated and potentially broken up by the US government. “As you know, many people think it is a very antitrust situation, the three of them. But I just, I won’t comment on that.” Trump reiterated his claim that “conservatives have been treated very unfairly” by Google. “I tell you there are some moments where we say, ’Wow that really is bad, what they’re doing,’” he added.
It is not clear why Amazon is included in this latest round of criticism, as it does not operate a communications platform, but it’s likely because Trump personally dislikes Amazon CEO Jeff Bezos and The Washington Post, which Bezos owns, and has criticized Amazon frequently in the past over apparent tax issues.
Cloud
- Thailand is becoming a critical country for blockchain
To understand how a small country like Thailand can move so quickly in the blockchain space, it’s crucial to understand the strategy of regulators and local companies. Unlike their U.S. peers, most Asian blockchain companies and exchanges work with local regulators right from the beginning, even as they are first building their products and growing their communities. These teams use formal and informal relationships to get buy-in from their respective local governments in order to bolster their credibility. This pattern is particularly true for Southeast Asian countries such as Thailand.
Security
- Yahoo, Bucking Industry, Scans Emails for Data to Sell Advertisers
Yahoo’s owner, the Oath unit of Verizon Communications Inc has been pitching a service to advertisers that analyzes more than 200 million Yahoo Mail inboxes and the rich user data they contain, searching for clues about what products those users might buy, said people who have attended Oath’s presentations as well as current and former employees of the company.
Oath said the practice extends to AOL Mail, which it also owns. Together, they constitute the only major U.S. email provider that scans user inboxes for marketing purposes.
Software/SaaS
- Oracle v. Google ain’t over yet — Google vows it’ll appeal to Supreme Court
The search giant said Tuesday that it’ll appeal the case to the Supreme Court, after a federal appeals court declined to rehear the case in which it determined the company’s use of Java software from Oracle went beyond the bounds of fair use. Oracle had previously asked for $8.8 billion in damages.
“We are disappointed that the Federal Circuit overturned the jury finding that Java is open and free for everyone,” a Google spokeswoman said in a statement. “We will appeal to the Supreme Court to defend this principle against companies like Oracle, whose restrictive practices threaten to stifle the work of new generations of tech developers.”
https://www.cnet.com/news/oracle-v-google-aint-over-yet-google-vows-itll-appeal-to-supreme-court/
Other
- Amazon Is Beefing With Bernie Sanders Over Its Treatment of Employees
Even Amazon’s attempt to quell concerns about its employees using the SNAP program fell flat. It starts by giving Sanders grief for referring to the program as food stamps, and then states that those numbers “include people who only worked for Amazon for a short period of time and/or chose to work part-time,” implying that part-time employees needing to rely on food stamps is reasonable.
Sanders used Amazon’s rebuttals to fuel his fire, tweeting on Wednesday that the company should “prove” its claims by “mak[ing] public the number of people you hire through temporary staffing agencies like Integrity Staffing Solutions and make public the hourly rate and benefits those workers earn.”
- Microsoft to Require Its Suppliers, Contractors to Give Paid Family Leave
The policy applies to Microsoft vendors with more than 50 employees and covers workers given substantial assignments for Microsoft. For example, a staffing agency that provides information-technology professionals to Microsoft and other clients would only have to cover employees assigned to Microsoft. It will impact thousands of workers around the country, the company said.
The paid leave benefit requirement will be capped at $1,000 a week in compensation, and Microsoft suppliers have 12 months to implement the change.
Photo by Jack Antal on Unsplash