Data Sheet—Monday, September 22, 2014

Good morning Data Sheet readers. Reports about EMC’s potential future are stealing headlines again, but a resolution seems no nearer. Alibaba’s market cap now mushrooms those of Intel and Oracle. Meanwhile, Ericsson is making another cloud-software investment just one week after announcing plans to get out of the wireless modem business. Enjoy your Monday!

EMC discussed mergers with Hewlett-Packard, Dell. For weeks, we've been puzzling over whether the company might sell off a stake in its VMware virtualization technology unit to appease hedge fund Elliott Management (which owns more than 2% of EMC). News reports citing unnamed sources suggest the company has mulled more radical options, including separate deals to sell all or part of the company to two of its biggest legacy hardware rivals. No one's talking, but the rumors have been great for EMC's stock, up 10% since mid-July to around $30 last Friday. WSJ

When will John Chambers call it quits? While Larry Ellison's not-quite retirement announcement last week caught many people offguard, a CEO transition for Cisco would be less surprising. Two years ago, Chambers sounded his intention to leave in two to four years (he's been there since 1995 and just celebrated his 65^th birthday), so the countdown has officially begun with three insiders poised to step up. Fortune

Intel plans $6 billion investment in Israeli chip plant. Government officials just approved a plan for the country's biggest-ever foreign investment in a facility that will produce Intel's most sophisticated technology to date. In exchange, Intel will get a $300 million grant over five years, plus its corporate tax rate there will be just 5% over 10 years. Reuters

CLOUD CHATTER

SAP's McDermott: We help businesses keep control. With its $8.3 billion takeover of business expense management company Concur, SAP is creating a massive services network that also helps with procurement (via the earlier Ariba buyout) and managing contract employees (from the Fieldglass acquisition). SAP already manages $600 billion in annual transaction volume and corporate expense management is worth another $1.2 billion. Computerworld

STATS & SPECS

Will Avon Ladies embrace e-commerce? The giant beauty company needs its famous network of sales representatives (which has shrunk by half since 2007 to about 300,000 in North America) to embrace social media, mobile technology and personalized online selling. So it just finished a web overhaul to supplement door-to-door methods. "We are going digital. We think that's the future. That's where direct selling needs to go," says CEO Sheri McCoy. Yes, but Avon really should have figured this out five years ago. Fortune

STARTUPS & DISRUPTORS

Add another layer of security. Duo Security's technology makes it tougher for hackers to intercept log-ins for enterprise applications—its 5,000 customers include Facebook, Etsy, Box and Yelp. It just raised another $12 million in Series B financing from Benchmark; early funding ($5 million) came from Google Ventures. TechCrunch

FAQ

Ericsson's emerging focus: helping build cloud services

Ericsson, which you probably think of first as a mobile network equipment company, is buying a majority stake in cloud computing startup Apcera.

The disclosure this morning comes days after it announced plans to shut down its wireless modem business (a move that will cost 1,000 of its 110,000-person workforce their jobs and transfer some others to radio network development).

This is Ericsson's fourth move in the past two months focused on helping network operators build and secure cloud services. About two weeks ago, it paid $95 million for Fabrix Systems, which develops technology for streaming video. In July, it acquired MetraTech to manage billing; and in early September, it announced a pact with Guardtime to address security concerns.

Terms of the Apcera deal announced this morning weren't revealed, but the transaction is expected to close in the fourth quarter. According to Crunchbase, the two-year-old company Apcera has raised about $7.2 million in venture capital from True Ventures, Kleiner Perkins Caufield & Byers, Rakuten, Andreessen Horowitz, and Data Collective. Ericsson is also committing to future development support.

Apcera's technology, called Continuum, helps companies apply management policies to software applications running on cloud services (such as when to let someone log into the systems). It's about control: allowing a company to apply the same discipline it would if the software was loaded on in-house servers, Apcera founder and CEO Derek Collison told Data Sheet. Plus it helps businesses connect applications that are spread across cloud services and legacy data centers. The technology is meant to appease security, governance and compliance concerns. "If you cannot trust the system beneath an application, the ability to drive value for the business is limited," Collison says.

Notes True Ventures partner Puneet Agarwal: "Developers want to move with lightning speed, but their progress often comes to a screeching halt once the app reaches the operations team, which needs to ensure that the new app works properly and adheres to policy within the current IT environment."

Collison previously held executive posts at TIBCO Software, Google and VMware, where he was responsible for creating Cloud Foundry, a platform for speeding development and deployment of applications. The company's head of sales, Mark Coffman, used to lead strategic accounts at Apptio, another developer focused on technology management solutions.

ONE MORE THING ...

It's official: Alibaba just held the biggest IPO ever. After accounting for some additional shares, the debut is valued at $25 billion—which means underwriters netted almost $300 million. The Chinese e-commerce giant recorded a 38% jump during its first day, closing at just under $100 per share compared with the offering price of $68. That makes its value bigger than either Oracle or Intel. Fortune