Data Sheet—Monday, March 20, 2017
Welcome to another Monday. This is Heather Clancy filling in for your regular host Adam Lashinsky, who will return tomorrow. While you were enjoying your weekend, Apple CEO Tim Cook was making headlines with a rare public appearance in China—his first-ever speech at the government’s annual World Development Forum—where he reaffirmed the tech giant’s commitment to globalization. “I think the worst thing would be to—because it didn’t help everyone—is to say it’s bad and do less of that,” Cook told attendees. Countries that isolate themselves, he warned, do so to the detriment of their people.
His comments were directed as much, of course, to Apple’s hometown audience in America as they were to Chinese officials leery of President Trump’s frequent criticism of the country’s economic policies and worried about the impact the new President’s still-undefined policies might have on the strategy of U.S. companies.
China remains Apple’s second-most important market outside the United States (although India is rising fast), so Cook’s diplomatic mission makes sense. The company continues to make big investments in the country despite political pressure to bring more of its manufacturing activities back to the United States. On the day before Cook’s speech, Apple said it would build two more research and development centers there in Shanghai and Suzhou. That makes four so far, at a cost of about $500 million.
IBM’s CEO Ginni Rometty was also in Beijing Sunday, where she signed her company’s new partnership with a division of a huge local conglomerate, Wanda Group. This is IBM’s second big foray into China’s cloud services market, which is tightly controlled from a regulatory standpoint. Few details were disclosed about the new alliance, but IBM will share revenue with its new ally.
Apple and IBM are far from alone in their need to strengthen their friendships in China, ahead of possible changes to the U.S.-Chinese trade relationship. Cisco pledged $10 billion to the market back in 2015, so it also has plenty at stake. During remarks last month at another conference outside the United States, the Mobile World Congress in Barcelona, Cisco CEO Chuck Robbins sounded a positive note about what he believes will eventually go down. “I think the policies and the things that will be rolled out will ultimately enhance the opportunity for the global economy to grow as well as the U.S. economy to grow,” he said during a media briefing. “I think most people actually share the belief.”
Let’s hope his optimism isn’t misplaced.
BITS AND BYTES
Another high-ranking Uber executive is resigning. Jeff Jones, a former Target marketing exec who joined just seven months ago as president, has been handling some of the duties that will fall to the new chief operating officer the ride-sharing upstart hopes to hire in the near future. His departure is the fourth high-level resignation in the past month as Uber damage-controls the fallout from several embarrassing revelations about its culture and business practices. (Reuters, Recode)
Intel wants a bigger piece of computer memory business. The company has started shipping a new data storage technology, called 3D XPoint, that it’s billing as a hybrid between dynamic random-access memory and flash memory. It’s pitching the approach as much faster than conventional memory for applications such as fraud detection or, ultimately, self-driving vehicles. By next year, the new product could be a big boost for Intel’s memory business, which pulled in $2.6 billion last year. (Wall Street Journal)
Southwest Airlines is investing $500 million in a technology overhaul. For such an efficient airline, many of its processes are still very manual, such as the communications between luggage handlers and gate attendants. The changes, which include issuing tablet computers to ground personnel, are intended to help Southwest handle more passengers and do away with paper tickets entirely. United and Delta are also boosting their IT budgets substantially. (Fortune, Bloomberg, Wall Street Journal)
Newly public MuleSoft wants to become the ‘Salesforce of software integration.’ The San Francisco-based company’s software helps corporate users tie together different applications without having to write a whole lot of custom code themselves. Is technology, for example, underlies a new mobile ordering app from McDonald’s. MuleSoft soared in its IPO last Friday: priced above its suggested range at $17, its shares soared 45% to close at $24.75. As Barb Darrow reports, its debut should galvanize focus on this “middleware” software category, which could surpass $27 billion in revenue this year.
SURVEYS AND STUDIES
More Fortune 100 companies are adding CIOs as directors. Only one-third of the world’s biggest companies have added someone with experience as a chief information officer to their boards. But that’s changing quickly. The number of CIO appointments jumped 74% in just the past two years as more organizations start viewing technology as a potential driver of new revenue and not just a cost center, according to data from recruiting firm Korn Ferry. (Harvard Business Review)
IN CASE YOU MISSED IT
Bitcoin Prepares for an Ugly Breakup, by David Z. Morris
Apple May Have Started a New ‘Underpricing’ Strategy, by Don Reisinger
Expedia Names Chelsea Clinton to Its Board, by Aric Jenkins
ONE MORE THING
Walmart is studying ways to use drones indoors. The giant retailer was last week granted a patent for a system that would use them as flying couriers to shuttle items from department to department in stores. (Fortune)