Data Sheet—Monday, November 3, 2014

Good morning, Data Sheet readers! Let’s get to work.

(Reminder: Heather Clancy is on vacation this week. Tips, feedback, or just hello? @editorialiste.)

WHAT YOU NEED TO KNOW TODAY

Publicis will buy Sapient for $3.7 billion, and digital advertising is the name of the game. The deal follows this year's failed merger attempt between Publicis and Omnicom. Fortune

Red Hat introduces its new cloud infrastructure platform at the OpenStack Summit in Paris. Gigaom

Investors want a dividend from Google. It's sitting on an "embarrassing" amount upwards of $100 billion. WSJ

IBM and Repsol, the Spanish oil and gas company, partner on cognitive computing research for that industry. eWeek

More machine learning for health care. Butterfly Network launches with $100 million in funding to make faster mobile medical imaging devices. Re/code

Microsoft continues pruning its workforce under Satya Nadella. This time, ad sales get the knife; the number of cuts is unclear. Business Insider

Panasonic is on the hunt for mergers, acquisitions, and partnerships. In recent years, the company has scaled its television and phone businesses in favor of products and services for corporate and government clients.

RTL Group, the European TV firm, will buy StyleHaul, a YouTube fashion network, for at least $107 million. The deal follows Disney-Maker Studios and Otter Media-Fullscreen, and as they say, three's a trend. Re/code

PEOPLE ARE TALKING ABOUT

Slack. The communications and collaboration tool raised $120 million on Friday but most businesses still haven't figured out how to kick e-mail to the curb. Investors don't seem to mind. TechCrunch

Amazon's diversity numbers: about the same as the rest of the tech industry, at 63% male globally and 75% male among managers. Wired

Cyber security is top of mind for Michael Dell as his company heads into its annual customer conference, Dell World, this week. It's also the one-year anniversary of the company's move to go private. CRN, NYTimes

Self-driving cars have become a political issue in Florida. Fortune

LinkedIn versus Salesforce. The former's acquisition of the Bizo marketing platform show a hunger to build tools for sales teams, the latter's core competency. TechCrunch

"Eventually the core profit centers of even the best high tech companies will run out of steam." Even Apple. Fortune

Halloween is over, but this roundup of scary IT stories reveals what really puts the fear in your company's tech guy. Ars Technica

STATS & SPECS

Windows XP market share is 17.2%, and Windows 8 variants are poised to overcome it. Yes, really. ZDNet

Semiconductor revenue for the so-called Internet of Things will grow 36.2% next year, driven by automotive use, LED lighting, and "smart" home applications. Gartner

The IT vendor pecking order: Microsoft, VMware, Cisco, Google are up; EMC, Dell, IBM, Red Hat, Salesforce are down. ZDNet

RHAPSODY IN BLUE

Last week, IBM and Twitter announced a data analytics deal that in essence allows the former to incorporate the latter's data into its products for businesses. They're unlikely bedfellows to say the least, but there's a method to the madness, says IBM's Alistair Rennie, general manager of the company's Business Analytics group, and Twitter's Chris Moody, its vice president of data strategy.

They called me from the Mandalay Bay casino and hotel in Las Vegas. Here's what they said, edited and condensed for clarity.

Rennie: There are three basic elements. First, we are going to integrate Twitter data with our cloud analytics tool to make it easy for customers to reach it. The second is we'll team up to make solutions for very specific business needs, such as marketing and customer care. Lastly, IBM will train and certify 10,000 consultants on a global basis to be experts of the Twitter platform.

Moody: Twitter has a lot of relationships with a lot of executives. We have big brand relationships with companies advertising on Twitter. Executives ask how they can be more innovative. We can provide them with data but it's just that—very large volumes of raw data, so it's not actually useful to them. How do we get started? How do we get there? That's not an easy question to answer. Our data is useful, we need someone to come along and build value on top of it and combine it with other data sources.

Twitter is ultimately the most important archive of human thought that has ever existed. It really does represent the voice of the planet. The question I would pose to business leaders is, if you were thinking of a particular business decision, would you want the world to weigh in? If I'm a retailer and my inventory system says 15 items are out of stock, my system can't tell me which to restock and which to stop carrying. If we ask customers, they could be upset or not talking about it at all. It's an additional lens into a human decision.

An example on a more macro scale would be: You manufacture computers. Your big challenge is figuring out what to make and how much to make of it. For the former, you can figure out what people are talking about that they most value and what the weaknesses are in a competing product. You can also talk about what you're building and get a reaction from consumers.

Rennie: Like any application of analytics, the driver is never technology—it's business outcome. The more data you can bring to that problem, especially when it's an incredibly unique dataset like Twitter, the analytics become better and the decisions become clearer.

Moody: Customer service probably had its last big revolution in the 1950s and 1960s when call centers were introduced. That opened up a channel for customers to reach out when they had a need. Fundamentally it hasn't changed—it's a very reactionary business. Consumer companies are often finding that they're spending time dragging themselves out of a hole to get the customer back to being okay with their service. If you think about Twitter as a platform, people are openly sharing their experiences with products. So you can really take a new look around doing service with your products and how they're thinking about your products. If they're really frustrated with battery life, instead of waiting for them to call you to cancel their contract, you can talk to them proactively and even tie that back into product development.

Rennie: We're very early in using these platforms at scale. There's a whole set of interesting use cases: research and development, pharmaceuticals and introducing a new protocol, fine-tuning a supply chain and looking for global disruption of it. Marketing, logistics, human resources, and well beyond.

Moody: At Twitter, it is not uncommon to start a conversation around data and an executive says hey, I keep hearing things I can do with Twitter data, tell me more, and I say, well what are your top five problems, and then we talk about how our data can be informative. We're talking about high-volume raw data. There's lots of information in the payload of a tweet, much more than 140 characters.

The benefits for Twitter fall into a couple buckets. Number one, the most important, is that we believe as companies start to run their business operations on Twitter they will naturally understand the platform better and will be more likely to engage on the platform. All kinds of good things happen for Twitter when that happens. It gets our data more deeply distributed inside of enterprises, which we believe will have real benefits in terms of future engagement with our platform, whether through adoption or advertising.

Rennie: From an IBM perspective, we think having this data is a big differentiator in terms of our ability to attract clients.