Data Sheet—Wednesday, October 8, 2014

Good morning, Data Sheet readers. IBM CEO Ginny Rometty spends every day prioritizing decisions only she can make. How about you? Plus, entire industries are being redefined by mobile apps. CA Technologies wants to play a central role in their development and management. In an exclusive interview, CEO Mike Gregoire explains why being a mainframe pioneer is one of his company’s biggest advantages.

Rometty: Change is uncomfortable. Speaking at the Fortune Most Powerful Women Summit, the IBM CEO challenged her peers to fight the urge to micromanage by focusing only on decisions no one else in their organization can handle. Plus, here are the three rules guiding her end-to-end IBM turnaround strategy outlined in Fortune's recent cover story: don't protect the past, don't define yourself by either a single product or by your competition, and embrace perpetual reinvention. Fortune

Twitter takes U.S. to court over data disclosure. Has the National Security Agency requested information about your email, Internet search history or social network posts? Right now, you don't know because the U.S. government limits what service providers are able to reveal when they receive federal requests for personal information. That's why you've seen companies like Google, Facebook and Twitter start publishing "transparency" reports. Twitter thinks the limited disclosure policy violates the First Amendment. New York Times

Symantec next to split? Once upon a time, Symantec was "just" a security software company. Then, 10 years ago, it paid $13.5 billion for Veritas Software to establish a foothold in data management. Now, Bloomberg reports the company is considering a breakup. The rumor emerged just days after Hewlett-Packard's planned breakup sparked speculation about high-tech industry fallout, and just two weeks after top executive Michael Brown removed the word "interim" from his CEO job title. Apparently he's a supporter of the idea. Bloomberg

CLOUD CHATTER

Salesforce spruces up leadership team, key products. On the eve of its mammoth annual customer conference, Salesforce has hired Cisco Systems sales executive Daniel Smoot as its new executive vice president for "customer readiness." His duties aren't spelled out, but there's been heightened attention among many enterprise software companies on making technology far easier to use (like a consumer product). Speaking of which, Salesforce is making over the look of its flagship customer relationship management (CRM) technology and adding more mobile features to its customer service platform. Re/code, TechCrunch

STATS & SPECS

Refreshing new perspective on videoconferencing. Let's be frank, most of the videoconferencing or collaboration systems sold by the likes of market leaders like Cisco Systems or Polycom are a hassle to use, not to mention super expensive: $20,000 a room isn't unusual.

Startup Highfive (founded by former Google executives) has already signed up more than 100 companies for its $799 plug-and-play product, including HotelTonight and Warby Parker. One of the coolest features: you can start a video call on a smartphone, and then "transfer" it over to a room system when you arrive at the office. Highfive has raised $14 million in funding from Andreessen Horowitz, General Catalyst and Marc Benioff.

Also this week: another upstart, Blue Jeans, which offers on-demand video collaboration services, just signed up AT&T as a sales partner. Both the Highfive and Blue Jeans technologies work with pretty much any desktop computer or vide-enabled smartphone.

STARTUPS & DISRUPTORS

Square valued at almost $6 billion. In mid-September, Fortune reported on the mobile payments company's quest for more up to $200 million in new backing. The new Series E infusion for $150 million is led by new investor Singapore Investment Corp. along with Goldman Sachs and Rizvi Traverse (both previous backers). Although it gets first-mover respect, Square now faces much more serious competition from three well-funded rivals: Amazon, Apple and PayPal. Fortune

$82 million for flash storage company. SolidFire's technology speeds the performance of database applications or virtual desktop services, compared with lower-cost hard-disk drives may be inexpensive. The new round is led by Greenspring Associates and brings total funding to $150 million. Competitor Pure Storage has raised almost $500 million, but it looks like its initial public offering will be delayed. Gigaom

CONNECTED

Why mainframe pioneer CA loves mobile apps

These days, there's an app for almost everything or there will be soon.

"Think of the Internet of things," urges Mike Gregoire, CEO of CA Technologies, which hopes to play a central role (albeit behind the scenes) in this disruption. "How many IP addresses are out there? A car is now just an IP address. An MRI machine is just an IP address. A refrigerator is just an IP address, it's running applications.

By the end of 2014, there will be an estimated 1.75 billion smartphone users globally, driving what some analysts have dubbed an "application economy" worth an estimated $25 billion. Add the roughly 250 million machine-to-machine connections that could be in place by the same timeframe, and it's easy to see why major companies from the automotive, financial services, healthcare, transportation and retail industries are racing to participate. The challenge is many companies are ill-equipped develop secure, reliable and compelling apps at the pace demanded by the mobile world—measured in hours or days rather than months, Gregoire says.

"What happens if you have a car, and you allow third parties to put their applications into your car? Who's responsible if that application corrupts the application by the car manufacturer? These are all of the incomplete, unintended consequences of this application architecture that I think we have a great brand permission to help our clients solve," he says.

That's where CA comes in. Gregoire believes the company's portfolio of security, operations management, project and application performance technology, which already generates close to $5 billion in annual revenue, can bring much needed adult supervision. Its influence starts with application design but it doesn't end there. It also reaches back into the massive data centers used to run mobile apps, a place where CA's mainframe legacy will be crucial.

Immediately prior to joining CA in January 2013, Gregoire shepherded HR and talent management software company Taleo (since swallowed by Oracle) through its initial public offering. Fortune spoke with him about where mobile apps will play a role in every company's future, and how CA is managing this transition.

Define application.

Any piece of software that you're using. The target for that has changed considerably. In automotive, it's not the car alone, it's the software being shipped with it. It used to be a car was bought for convenience, style, speed, safety, fuel economy. Today, if you're going to buy a new car, one of the criteria you're going to look at is is how technical the equipment is. Will you buy a car that doesn't have hand-free [features] anymore? Will you buy a car that doesn't have satellite radio? Will you buy a car that doesn't have navigation with traffic updates? They are things that are becoming very sophisticated.

Retailers used to be focused on location. Today, their future depends on applications that reach customers in new ways, expanding their reach. They also completely change the notion of customer service and loyalty. There's also another thing that comes along with that: massive responsibility. If you are trying to engage with customers, especially in retail, and you put an application out there and that user experience is poor, that's a reflection of your brand. That's a reflection of the quality of your product, the quality of your company.

In CA's investor presentation, you list being a leader in mainframe software as a differentiator in the app economy. Why?

Mainframe applications are complex. They were built to solve some of the world's most complex problems. Keeping those applications up and running all of the infrastructure around those applications, on a global scale, is a sophisticated business. You have to have technical chops to run an environment that has no patience for downtime.

Connected is an interview series with leaders of innovative organizations. A longer version of this conversation will appear online.

ONE MORE THING

New York nixes unauthorized sensor network. The number of cameras, microphones and other data-tracking devices watching over city streets grows every day, primarily justified by public safety concerns. But marketing company Titan360's experiment using wireless "beacons" to display targeted advertising on old public payphone booths ran afoul of city officials because it didn't get the right approvals. Titan360 was using location information collected from pedestrian smartphones to send promotional coupons for nearby retailers. Wall Street Journal