Data Sheet—Wednesday, February 10, 2016

Many executives and entrepreneurs talk about “big data.” Gil Elbaz, founder and CEO of a Los Angeles-based company called Factual, embodies it.

Big data refers to the way companies are using software, computing power, machine learning, and other buzzword technologies to solve previously unsolvable problems. From Elbaz’s perspective, however, even companies that call themselves data experts act on data but don’t provide access to it. His prime examples are data giants Google, Facebook, and Twitter, which say they provide data to other companies but get prickly if partners create products too much like their own. (Yelp, Zynga, and numerous defenestrated Twitter apps tell this story.)

Elbaz calls Factual’s product a “global places database.” Through a vast network of collection mechanisms, Factual provides the data for other companies to incorporate into their mobile applications. Customers include Apple, which used Factual to improve its initially shaky maps. The allure of such data is advertising: Know where a customer is and tell them what’s available, and they are likely to view an ad. The company sells its data as a subscription, which it heavily discounts if a customer agrees to send back the data it collects to help build up Factual’s database.

Factual’s pitch to customers is that it’s not Google and it promises never to build a consumer application that would compete with them. “Our customers are looking over their shoulders at Google,” Elbaz says.

He knows quite well of what he speaks. In 1999 Elbaz co-founded a company called Applied Semantics, which Google bought in 2003. It became AdSense, Google’s highly profitable ad network that funnels advertising revenue to countless web publishers. Elbaz sees Factual, which began its life 2008 but only now is revving up its sales effort, as the mobile equivalent to AdSense.

A soft-spoken engineer, Elbaz envisions Factual as a giant, neutral data provider to every company that needs it, similar to how one particular Silicon Valley icon provided databases to the entire corporate world. “I think we can be at least as large as Oracle,” says Elbaz.

That’s big ambition growing out of big data.


Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com

BITS AND BYTES

IBM's artificial intelligence chief resigns. Stephen Pratt, who was named head of the company's Cognitive Business Solutions Group just a few months ago, has stepped down. The resignation was confirmed, but neither IBM nor Pratt is commenting on the reason. (Wall Street Journal)

EMC execs: Dell merger will close on time. CEO Joe Tucci and lead director William Green reaffirmed the companies' commitment to the deal during remarks at the Goldman Sachs technology conference in San Francisco. Plus, one of its prime software assets, VMware, has added two board members. They are former Skype and GoPro executive Tony Bates and former American Airlines CEO Donald Carty, who (not coincidentally) has been on EMC's board since last year. (Fortune)

Amazon still reigns in cloud services. The company is holding onto its dominant market share, although rival Microsoft is growing fast, according to a highly regarded customer survey. There's one result that should have the Amazon Web Services team particularly cheerful: It is winning over more large corporate accounts entrusting their information technology to the cloud. (Fortune)

Feds probe breaches, as White House ups proposed cybersecurity budget. Personal information for 29,000 Department of Homeland Security and FBI staffers was exposed this week. Meanwhile, the Internal Revenue Service is investigating the attempted theft of electronic filing codes for 464,000 Social Security numbers. Coincidentally, the White House Tuesday requested a big increase for the nation's cybersecurity defenses—another $19 billion, with $3 billion earmarked for better agency systems. (New York Times, Wall Street Journal)

Sanders out-raises Clinton in Silicon Valley. More than half of the top 20 companies donating to Senator Bernie Sanders' presidential campaign in 2015 were technology companies such as Google, Apple and Microsoft. His momentum is growing. In January, Sander out-raised his chief rival, former Secretary State Hillary Clinton, by $5 million. The donors weren't disclosed yet. (Wall Street Journal)

Russia considers higher taxes on Internet companies. German Klimenko, named as the country's Internet czar six weeks ago, wants Google and Apple (among others) to pay more for the money they make in Russia. His motivation is an interest in leveling the playing field for local companies, such as Yandex. Another measure he supports—taking Microsoft Windows off of state-owned computers. (Bloomberg)

THE DOWNLOAD

When software tries to eat regulation. Until Monday night, Zenefits founder and now former-CEO Parker Conrad played the role of the disruptive underdog going after the big, evil corporation. Then, he abruptly left the stage. In a public letter, his replacement David Sacks made this proclamation: “The fact is that many of our internal processes, controls, and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned.”

The message was clear: Zenefits was in legal trouble, and it was Conrad’s fault. He was not given a ceremonial title. He was not given a board seat. He was not spared the blame.

The Zenefits meltdown follows a similar pattern at other startups in highly regulated categories. First a media report raises questions about a company’s business practices. Then regulators take a closer look. Then we find out that the disruption wasn’t quite as magical—or at least, not as legal—as it seemed. Why does Silicon Valley keep letting this happen? (Fortune)

ONE MORE THING

Can't code but want your kids to learn? These web sites, gaming apps and online puzzles use visual learning methods to teach young children programming skills. (New York Times)

This edition of Data Sheet was curated by Heather Clancy:

[ceo_attribution email="heather@heatherclancy.com" twitter="greentechlady"]

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