Data Sheet—Wednesday, October 15, 2014

Good morning, Data Sheet readers. The good news: Intel is making headway in the tablet market. The bad news: it’s losing money to do so. Read on for more details about its biggest quarter ever. Plus, SAP and IBM are getting closer to accelerate cloud computing revenue for both companies.

Intel Q3 revenue breaks record, but mobile sales slip. The chipmaker posted the biggest quarter in its 46-year history with $14.6 billion in sales, an 8% jump over the year-ago period fueled by this year's personal computer revival. But because of the way it subsidizes its tablet chip sales, Intel's mobile chip unit generated just $1 million on about 15 million shipments and recorded an operating loss of $1.04 billion. That loss was expected, as Intel seeks to drive its chips into 40 million tablets by the end of the year. Fortune

Qualcomm bets $2.5 billion on automotive and wearable chips. It will pay a 56.5% per-share premium for British company CSR, beating out a competitive offer by rival Microchip Technology. CSR's name is short for Cambridge Silicon Radio, and it specializes in applications enabled by Bluetooth wireless connections—a big deal for the "Internet of things." Reuters

Tech analyst floats Microsoft breakup idea. Both eBay and Hewlett-Packard are splitting up to improve shareholder value, so it stands to reason that tongues will wag about other big legacy tech companies. Exhibit A: Colin Gillis with BGC Financial published a research note Tuesday suggesting that Microsoft investors might be "best served by the company splitting into three businesses: hardware, software and enterprise." The big beneficiary: Microsoft's "robust" enterprise business. But is it really necessary? Yahoo! Finance

CLOUD CHATTER

EMC's me-too takeover. What to do when your biggest competitors in data center technology invest in cloud computing startups? Follow suit, of course. EMC's acquisition this week of Cloudscaling echoes similar moves last month by Hewlett-Packard (Eucalyptus) and Cisco Systems (Metacloud). All three buyouts were motivated the companies' quests to earn cloud credibility more quickly. Gigaom

STATS & SPECS

Extensive Cloudera overhaul. The enterprise data management company is improving security and allowing for larger queries in existing products. Even more notable, it introduced new technology, called Cloudera Director, that will help enterprises set up Hadoop clusters on cloud-hosted servers and storage equipment—starting with Amazon Web Services. InformationWeek

Feedback on retail "beacon" experiments. As I reported earlier this year, several high-profile retailers launched marketing experiments involving technology that detects when smartphone-wielding customers enter a store and personalizes mobile messages accordingly. One of them, American Eagle Outfitters, shares this revelation from its experiment with shopkick across 100 locations: the percentage of walk-in shoppers who tried on an article of clothing after receiving a message with a related promotional incentive was double that of those who didn't get the offer. There are more than 7,500 shopkick beacons being used in 3,000 retail locations, including Best Buy, Macy's, and Target stores.

STARTUPS & DISRUPTORS

MongoDB prepares to fend off IBM, Microsoft. The company is used to pitting its database management technology against smaller rivals. Now the two software giants are hawking competitive products. So MongoDB is taking preemptive measures to protect its turf with an upgrade that runs across a broader range of cloud computing services, and new pricing that includes deeper support options and guaranteed services levels. InformationWeek

FAQ

With IBM by its side, SAP reenergizes cloud strategy

With much of the high-tech industry's attention focused on the Salesforce conference in San Francisco this week, SAP sure picked a strange time to issue a barrage of software as a service (SaaS) news.

But that's exactly what it has done. The centerpiece is a new partnership: SAP will use IBM's data centers to run its expanding SaaS applications portfolio, which collectively fall under the HANA Enterprise Cloud umbrella. It's hoping to "build global scale instantaneously."

“We look forward to extending one of the longest and most successful partnerships in the IT industry,” said SAP CEO Bill McDermott in a statement about the development. “The demand for SAP HANA and SAP Business Suite on SAP HANA in the cloud is tremendous, and this global agreement with IBM heralds a new era of cloud collaboration. We anticipate customers will benefit from this collaboration and expansion of SAP HANA Enterprise Cloud."

That suite includes both SAP's own applications plus services it acquired from Ariba (procurement), SuccessFactors (human capital management), and soon, Concur (travel and business expenses). This week, SAP also announced another cloud-first product intended to "simplify" financial planning and analysis, aptly called SAP Cloud for Planning. It would be even more interesting if there was a release date.

SAP's strategy of using someone else's cloud servers and storage capacity is the exact opposite of rival Oracle, which is building its own data centers to support its own metamorphosis away from on-site applications. Its idea is to reach scale more quickly—40 data centers within the year. IBM, meanwhile, gets a high-profile cloud data center customer at the expense of both Amazon Web Services and Microsoft.

Click here for Fortune's full coverage of the SAP-IBM deal.

ONE MORE THING

Why Hillary isn't a fan of videoconferencing. Recall that infamous image of a sunglasses-wearing Secretary of State Clinton consulting her BlackBerry? On Tuesday she bemoaned technology's toll on thoughtful decision-making, saying most of us have become too reactive—in politics, in business and in our personal lives. "Technology has put higher premium on face-to-face," Clinton remarked on stage an Salesforce's annual Dreamforce conference, explaining her record-breaking travel schedule while serving in the Obama administration. Fortune