Data Sheet—Friday, October 10, 2014

Welcome to Friday, Data Sheet readers. Microsoft CEO Satya Nadella’s misguided career “advice” for women is galvanizing new attention on high-tech diversity and salary gaps. Symantec has joined Hewlett-Packard and eBay in proposing a radical breakup. Plus, GE is making $1 billion in incremental revenue from big data technology, while Johnson&Johnson thinks it could help speed new drug discovery.

The comments that have everyone worked up are at about 1:35:00 in this archived Webcast: “It’s not really about asking for the raise, but knowing and having faith that the system will actually give you the right raises as you go along. That, I think, might be one of the additional superpowers that, quite frankly, women who don’t ask for a raise have. Because that’s good karma. It’ll come back because somebody’s going to know that’s the kind of person that I want to trust."

About 29% of Microsoft's workforce is female, which is about the same ratio as other high-tech giants including Google. The industry knows it needs to change things.

Nadella quickly realized the extent of his gaffe. He sent a Tweet soon after, noting: "Was inarticulate re how women should ask for raise. Our industry must close gender pay gap so a raise is not needed because of a bias."

And, he also sent an email to Microsoft employees, admitting "I answered that question completely wrong. Without a doubt, I wholeheartedly support programs at Microsoft and in the industry that bring more women into technology and close the pay gap."

One good thing to come of this: the coverage of this speech (which would otherwise would have been minimal) should go a long way toward raising awareness.

Symantec suggests super-quick split-up. Echoing similar moves at Hewlett-Packard and eBay, the security software company's management wants to spin off its existing storage technology division in the form of a tax-free distribution to shareholders by the end of December. The rationale? Reduce operational complexity and allow each company to pursue separate growth and "independent M&A strategies." (Hmmm.) CEO Michael Brown will stay with the security company in the same capacity, while Quantum executive John Gannon will lead the new (still unnamed) storage business. Fortune

Icahn pushes for Apple buyback. It's been quite the week for activist investors. First Elliott Management published a letter to EMC's board, outlining why a VMware spinoff makes sense. Now activist investor Carl Icahn is urging Apple CEO Tim Cook to use some of the company's $133 billion in cash to boost its stock price to the $203 per-share range, more than double current levels. Fortune

CLOUD CHATTER

Oracle hires former Google engineer. Larry Ellison won't be the only face for its aggressive cloud services ramp-up. Word has it that Peter Magnusson will lead strategy, reporting both to Ellison and Oracle's executive vice president for product development, Thomas Kurian. Magnusson left his most recent post at mobile communications company Snapchat this summer after just six months. Re/code

STATS & SPECS

All about analytics. One of the most anticipated sessions scheduled for the annual Salesforce customer conference next week will outline its expanded analytics services. Several competitors are using the buildup to steal the thunder. Two highlights:

SAP is formalizing its relationship with Birst to bring business intelligence features to its HANA technology. The smaller company, led by former Jive Software CEO Jay Larson, is backed with $64 million from the likes of Sequoia, Northgate Capital, DAG Ventures and Hummer Winblad Ventures.
Teradata and Cloudera are combining sales resources and getting together on product development and support, making it easier to tease business intelligence out of the information locked up in enterprise data warehouses.

Can big data speed drug development? Johnson&Johnson wants to cut hours of medical research related to preparing new drugs by using IBM's Watson technology to comb and analyze existing genomic data and patient histories. The first project involves J&J diabetes drugs. Fortune

STARTUPS & DISRUPTORS

Strong IPO for online marketing tech company. After being repriced above the initial $19 per-share projection, HubSpot shares jumped even higher in its trading debut to $25. Shares closed 20% higher, just above $30. The company was founded in 2006 to help SMBs automate marketing processes, raising around $100 million before it went public. TechCrunch

Box buys into healthcare collaboration. It is paying an undisclosed sum for MedXT, which sells a cloud service for medical image viewing and sharing. The intention is to make the Box content management platform more practical and secure for hospitals, clinics and other healthcare providers.

Xero gains on SMB accounting software leader Intuit. Although still much smaller than its rival, New Zealand upstart Xero now has 371,000 "paying" customers and $100 million in monthly "committed" revenue for its online accounting application (compared with 683,000 using QuickBooks Online). Xero posted a 95% growth rate in subscriptions during the first half of 2014. Backed with $244.2 million from investors including Peter Thiel, the company anticipates an IPO in 2015.

FAQ

How GE generates $1 billion from 'big data'

The square, squat robot scuttles across the stage on command, pausing next to a massive model depicting a locomotive engine.

Its sensors probe the surrounding air, collecting and analyzing temperatures. Detecting an unusually high reading, it calls for help from a field service agent. When his human colleague arrives, the robot sends its report to his smart eyeglasses, offering step-by-step repair instructions it downloaded from a cloud database.

Meet the "Guardian," a new breed of service robot known as an autonomous ground vehicle envisioned by General Electric's intelligent systems research laboratory.

The demonstration scenario shared during a New York briefing this week suggests a future in which robots handle dull, dirty and dangerous work across a range of health care, manufacturing and field service applications while humans handle duties requiring more advanced cognitive and fine-motor skills.

For GE, this is the next phase of the "Industrial Internet," its in-house phrase for what others call the Internet of things—the ever-growing collection of connected devices "talking" to businesses with valuable data.

This phenomenon is worth an estimated $1 billion in incremental revenue for the company this year alone, mostly in the form of advanced asset performance management services, according to GE's top executive. (GE's services group generates $45 billion annually.) Last year, the strategy inspired GE's $105 million investment in Pivotal, a data analytics company spun out from EMC.

"If you went to bed last night as an industrial company, you're going to wake up this morning as a software and analytics company," GE Chairman and CEO Jeff Immelt told 100s of customers and analysts attending the third "Minds + Machines" summit. "This change is happening in front of us. GE wants to be your partner."

Using its Predix technology, GE already captures 50 million data points collected and communicated by 10 million sensors installed on $1 trillion worth of equipment ranging from medical imaging systems to locomotives to jet engines, Immelt said.

Right now, that information is helping GE customers drive higher operational efficiencies, predictive maintenance and diagnostics that can reduce downtime, and synchronized fleet management applications.

Kate Johnson, vice president and commercial officer for sales and marketing at GE, offers the example of an offshore oil rig operator that recently averted a potential failure after detecting changes in production performance data. The savings: $7.5 million in lost production by replacing the part proactively.

Elsewhere, wind farm operator E.ON generates 4% more power from turbines it manages in collaboration with GE; and AirAsia Group stands to save up to $10 million in fuel costs this year by using Predix to reroute flight paths and optimize air traffic flow, based (among other things) on the performance data it collects about GE jet engines. "This data has been available for safety applications, now these livestreams could be used for flight planning," said Rajesh Gill, group chief pilot technical and efficiency, AirAsia.

By the end of 2014, there will be more than 40 applications and services based on GE's platform but the company hopes to spur many others by making Predix available to businesses interested in developing industry-specific solutions.

What's more GE is working with Cisco Systems and Intel to make sure support for its technology is included in future routers and other connected devices. To address security concerns, GE's Wurldtech division is testing a firewall designed for the unique protection considerations of sensors, substations, trains and other industrial equipment.

With more than 50 billion connected machines predicted by 2020, the biggest challenge to GE's industrial Internet strategy isn't the technology it’s the processes reengineering that must take place not just to make sense of data but to take meaningful action on it, noted several GE customers during the briefing. "Remember the human interface. All this means nothing if you don't have someone extracting this data to make it reality," AirAsia's Gill said.

ONE MORE THING

A selfie is worth a thousand digital marketing cues. Startups like Ditto Labs can help consumer product companies identify their brands in self-portraits posted on Facebook, Instagram, Tumblr, Twitter and other social commentary and blogging sites. Others, like Piqora, can show marketers what sorts of products are generating the most interest. The photos are posted publicly, so why not, right? The Wall Street Journal reports on the commercial implications and the privacy backlash.