Data Sheet—Wednesday, February 25, 2015

Feb 25, 2015

Good morning, Data Sheet readers! Apple owes big in its iTunes patent case. Currency woes are making Hewlett-Packard's separation planning trickier. Plus, mobile payments technology is the rage with Google and Apple. But what do consumers really want?

Share this daily newsletter with other technophiles, and tell them to sign up: http://fortune.com/2015/02/24/data-sheet-wednesday-february-25-2015/.

Finally, did you know Apple co-founder Steve Jobs would have turned 60 this week? Apple CEO Tim Cook remembered him yesterday on Twitter by sharing a classic Jobs sentiment: "The only way to do great work is to love what you do." Knock ‘em dead today, Data Sheet readers!

TRENDING

Just what HP doesn’t need, currency problems. The strong dollar will whack almost $3.3 billion off the high-tech giant’s revenue projections this year. If you take the dollar out of the equation, growth is still slower way than expected—mainly due to sales shortfalls for enterprise software and PCs. Also included in the first-quarter results: $80 million in expenses for the upcoming corporate separation. HP's management doesn't need this sort of distraction ahead of the proposed breakup, which likely will come later this year.

Big patent bill for Apple. It was ordered to pay roughly $533 million related to software in iTunes. That’s less than the $852 million requested by Smartflash, the Texas intellectual property firm behind the suit.

Facebook adds way more “active” advertisers. It just topped 2 million, up 33% from its last count in July 2014. The secret is simplicity, says Sheryl Sandberg. She told Time: “A couple years ago, our offering was, ‘Do you want to become a Facebook advertiser?’ That sounds complicated. Now you do a post, and we ask, ‘Do you want to promote this post?’ That’s a pretty easy on-ramp to being an advertiser.”

Juniper Networks appeases activist investor with two new board members. Last December, Elliott Management negotiated the addition of two new directors at EMC. Now, it has pulled off something similar at the networking equipment company, where it owns an 8.7% stake. The additions are Jim Dolce (CEO of mobile security startup Lookout) and Rahul Merchant (who was previously the CIO for New York City and Merrill Lynch, among other organizations).

No big surprises from Hortonworks. The big data company, which went public last December, managed revenue of $46 million for its 2014 fiscal year and its net loss was $177.4 million. It would rather have you consider its “billings” numbers, which include the services it offers to get its software up and running. Those were $87.1 million, up 134% from the prior year. I’ll be speaking with Hortonworks CEO Rob Bearden this afternoon, so expect more after that conversation.

Remember this name. Xero, a New Zealand cloud accounting software company that loves to beat Intuit, just raised a whopping $111 million from Accel Partners and Matrix Capital Management. It also hired a new U.S. president, Russell Fujioka, who used to be the CFO for Salesforce.

SCUTTLEBUTT

Google wants to take over Mountain View, California. It leases more than 7.3 million square feet of office space in the San Jose suburb. Now, it’s proposing a sprawling new headquarters campus. The most controversial part of the plan: how much new housing to add.

Looks like the net neutrality vote will happen Thursday, after one of the biggest Congressional corporate lobbying efforts ever—ranging from telecos like Verizon to content provider Netflix to e-commerce marketplace Etsy. Right now, odds are the measure will pass.

Anthem data breach exposes non-customers. The health insurer figures that records for up to 8.8 million customers of partner Blue Cross Blue Shield are at risk after its massive network break-in. On a brighter note, the FBI may be close to identifying the culprits.

Eric Schmidt heads to Brussels, where Reuters reports Google’s executive chairman will meet next week with Europe’s antitrust chief. On the agenda: the four-year investigation related to its online travel and price-shopping services.

Computer Sciences may be in play, now that talks with Cap Gemini and Carlyle Group have fizzled. The big government tech consulting firm has a market cap of approximately $10 billion.

Don’t worry so much. Dutch maker Gemalto confirms internal network hack, but says the breach didn’t expose encryption keys for millions of mobile SIM cards—as originally feared.

U.S. welcomes high-tech spouses. A new immigration policy could make it simpler for those married to H-1B visa holders to apply for jobs of their own.

Two more shareholder lawsuits were filed over Lenovo’s adware-preloading-incident-gone-bad, which left certain notebooks open to security breaches. The original idea was to offer targeting marketing, and the company’s tone has become far more conciliatory.

While we’re talking things legal, arguments began yesterday in a gender discrimination case involving legendary Silicon Valley venture capital firm, Kleiner Perkins. The irony: Kleiner Perkins is actually a leader among its peers when it comes to hiring women.

UP-AND-COMERS

One way to thwart insider threats. Australian cybersecurity player Dtex Systems closed a $15 million Series A round led by Norwest Venture Partners and Wing Ventures. The money will fund the 15-year-old company’s push into the U.S. market. It has a presence internationally with companies such as Allianz, T-Mobile, and Vodafone Group.

More technology for Google’s marketing toolkit. It confirmed the acquisition of Toro, a specialist in mobile apps promotion on Facebook (at least right now).

ServiceNow snaps up services skills. The cloud service management company is paying an undisclosed sum for one of its partners, Intreis, which specializes in corporate governance, risk and compliance. ServiceNow signed 40 new public sector and government clients in the third quarter of 2014 alone.

An easier way to explain employee benefits. GuideSpark, which makes video communications technology for human resources teams, has raised a $22.2 million Series C round led by Meritech Capital Partners. Big clients include Bausch+Lomb, Farmers Insurance, Toys ‘R Us, and Workday.

$19 million more for Mavenlink. The cloud project management software company’s new funding was led by Carrick Capital Partners and Silicon Valley Bank. It includes a $4 million credit facility.

PEOPLE ON THE MOVE

Intel security exec heads for startup. Mike DeCesare, now CEO of ForeScout, was one of the few remaining strategists who joined the chip giant after the $7.2 billion McAfee takeover.

MakerBot CEO moves to corporate parent. Jenny Lawton is now executive vice president for Special Projects at Stratasys. Her replacement at the 3D printer company is Jonathan Jaglom, currently running the Stratasys Asia Pacific region.

Twitter developer relations chief exits. Former Microsoft executive Jeff Sandquist was in his role for just 18 months. No word on where he’s going or a replacement.

WHAT PEOPLE REALLY WANT FROM MOBILE WALLETS

You can credit Apple Pay with dramatically raising the visibility of mobile payments technology over the past four months.

In reality, Google apparently still holds a larger market share—and it just signed some formidable partners to build it, AT&T, T-Mobile and Verizon.

Plus, you shouldn’t discount the influence of the world’s biggest smartphone maker, Samsung. Last week, it bought LoopPay, a technology that doesn’t require massive upgrades of point-of-sale technology.

Nor should you overlook PayPal, which processed approximately $46 billion in mobile payments during 2014. That was 20% of its total.

Why the fuss? The answer lies in the success of the Starbuck mobile app, which supports at least 7 million mobile transactions per week. An impressive digital payment vehicle? Certainly. But that understates the app’s powerful influence as a marketing tool. It’s already used liberally to distribute third-party software, digital music, and promotional offers. A valuable marketing channel that is underused.

“Access to loyalty rewards from brands is the most wanted features from consumers, and it’s the one least integrated in mobile payments today,” notes Forrester Research analyst Thomas Husson, in a recent blog about this topic. Indeed, approximately 57% of U.S. adult smartphone users want access to loyalty programs and rewards through mobile wallets, according to his firm’s ongoing Consumer Technographics surveys.

Three other tidbits to consider:

  1. Don’t forget price comparison information. It was only slightly behind loyalty programs as a desired feature for mobile wallets.
  2. Consumers may be slow to trust. They’re more likely to consider mobile wallets from banks and credit card processors than from technology companies or retailers. PayPal stands out as an exception.
  3. Dramatic three-year increase anticipated. According to Forrester, just 3% of consumers have used a mobile wallet in the past three months. By 2018, adoption should reach 15-20% of smartphone users.

ONE MORE THING

A harbinger for Apple Watch? Pebble’s latest smartwatch easily crushed the record for Kickstarter project funding, generating $1 million after just one hour.

MARK YOUR CALENDAR

Gartner CIO Leadership Forum: Digital business strategy. (March 1 – 3; Phoenix)

DocuSign Momentum. E-signatures and digital transactions. (March 10 – 12; San Francisco)

Microsoft Convergence: Dynamics solutions. (March 16 – 19; Atlanta)

IDC Directions 2015: Innovation in the 3rd Platform era. (March 18; Boston)

Cisco Leadership Council: CIO-CEO thought leadership. (March 18 - 20; Kiawah Island, South Carolina)

Technomy Bio: The big picture on transformation. (March 25; Mountain View, California)

Gartner Business Intelligence & Analytics Summit: Crossing the divide. (March 30 – April 1; Las Vegas)

AWS Summit. First in a series of cloud strategy briefings. (April 9; San Francisco)

Knowledge15: Automate IT services. (April 19 – 24; Las Vegas)

RSA Conference: The world talks security. (April 20 – 24; San Francisco)

Forrester’s Forum for Technology Leaders: Win in the age of the customer. (April 27 - 28; Orlando, Fla.)

MicrosoftIgnite: Business tech extravaganza. (May 4 – 8; Chicago)

NetSuite SuiteWorld: Cloud ERP strategy. (May 4 – 7; San Jose, California)

EMC World: Data strategy. (May 4 - 7; Las Vegas)

SAPPHIRE NOW: The SAP universe. (May 5 – 7; Orlando, Florida)

Gartner Digital Marketing Conference: Reach your destination faster. (May 5 – 7; San Diego)

Annual Global Technology, Media and Telecom Conference: JP Morgan’s 43rd invite-only event. (May 18 - 20; Boston)

HP Discover: Trends and technologies. (June 2 - 4; Las Vegas)

Brainstorm Tech: Fortune’s invite-only gathering of thinkers, influencers and entrepreneurs. (July 13 - 15; Aspen, Colorado)

VMworld: The virtualization ecosystem. (Aug. 30 – Sept. 3, 2015; San Francisco)

Dreamforce: The Salesforce community. (Sept. 15 - 18; San Francisco)

Gartner Symposium ITxpo: CIOs and senior IT executives. (Oct. 4 - 8; Orlando, Florida)

Oracle OpenWorld: Customer and partner conference. (Oct. 25 - 29; San Francisco)

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