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Data Sheet—Thursday, November 13, 2014

Good morning, Data Sheet readers. Both Cisco and NetApp disappointed investors yesterday, while Twitter used considerably more than 140 characters to spin its value proposition for analysts. Plus, Amazon’s cloud strategy chief says more large businesses are moving mission-critical applications to cloud services as data center leases expire. Read on for more details.

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Profit slips at Cisco, NetApp. Both missed their latest earnings forecasts, even though Cisco managed to post record quarterly revenue of $12.2 billion. “I said the return to growth would be gradual,” Cisco CEO John Chambers told the Wall Street Journal. “It’s a difficult environment.” So tough that the company’s CFO is retiring at the end of the year. The biggest drag for Cisco was lower telecommunication orders, while NetApp is feeling pressure from providers of public cloud storage services. Fortune, WSJ

Tweet this. During its first annual analyst meeting, Twitter CEO Dick Costolo said the social network reaches more than 500 million people every month who aren’t actually logged into accounts. So far, this group has received far less attention that its 284 million active monthly users. Even when you add both numbers together, however, its total audience is still just one one-fifth the size of Facebook’s. Fortune

An ad-free Internet! In an “oops” moment that will cost Google hundreds of thousands of dollars, the company’s DoubleClick service failed for more than one hour. The result: blank spaces where digital advertising usually runs. WSJ

Despite privacy concerns, Americans keep oversharing. A whopping 87% of U.S. adults surveyed by Pew Research Center know (thanks to Edward Snowden) that the government is poking into the public’s phone calls and email. More of them (91%) think there’s nothing we can do about it. Fortune

If you’d love to have an office on Apple’s “spaceship” campus, check out what it’s like to work in Samsung’s “Digital City” spread across more than 389 acres in Suwon, South Korea. “Perks” include 490 sports clubs and free meals (up to 79,000 served daily). ZDNet

Steve Ballmer’s gift to Harvard. The former Microsoft CEO is supporting the addition of 12 new professors to his alma mater’s computer science department. The amount wasn’t disclosed but could be roughly $60 million. The Harvard Crimson

Can you keep a secret? While men outnumber women in most high-tech fields, that’s not the case when it comes to data privacy mavens, where almost half the experts are women. What’s more, they usually take home bigger paychecks. Fortune


Windows tablets rule U.S. workplace. They’re used in about 72% of companies recently surveyed by Harris Interactive on behalf of Dell, edging out iPads (69%) and Android devices (60%). Computerworld

HP: We secure electronic payments. Addressing rampant consumer privacy concerns—and even more rampant data breach occurrences—HP is adding support for Apple Pay and other payment methods to its merchant security services. ZDNet

YouTube adds paid music service. The Music Key offering gives subscribers higher-quality audio and an ad-free browsing experience for $8 per month. It will compete with services such as Apple Beats and Spotify AB. The introduction is the latest signal of the music industry’s desire to move away from free digital music. New York Times, WSJ


Collaboration upstart hires former Zendesk, Salesforce exec. Slack, which sells a group communications app, has hired Bill Macaitis as its first chief marketing officer. The company created by Flickr co-founder Stewart Butterfield has signed up more than 73,000 paid users since launching its technology in February. Last month, it raised $120 million at a $1.12 billion valuation. Business Insider, Fortune


The man behind Nike’s drive to marry style with tech By Daniel Roberts

Using 3-D printing to make jet engines By Ben Geier

Comcast CEO: “I was embarrassed” by customer service debacle By JP Mangalindan

Will Mitch McConnell sabotage Obama’s new climate deal with China? By Brian Dumaine

How BrightRoll bucked a big tech startup trend By Dan Primack

The company that could be Alibaba’s Trojan Horse in the U.S. By Adam Lashinsky

Peter Thiel’s very negative—and very useful—advice for entrepreneurs By Brett Arends

Global directors on what makes a great board By Alyssa Abkowitz

Flip camera founder’s next act: cheeseburgers By JP Mangalindan



How Amazon is turning cloud computing into the ‘new normal’

Amazon cloud strategy chief Andy Jassy opened his keynote address this week at its annual re:Invent conference on the offensive.

“More and more companies are moving their computing workloads to Amazon Web Services,” the Amazon Web Services (AWS) senior vice president declared from the Las Vegas stage, pointing to fast-growing digital businesses such as Airbnb or Pinterest and venerable Fortune 500 companies like Bristol Myers Squibb, Johnson & Johnson, and Merck & Co.

Certainly, according to an oft-quoted “magic quadrant” evaluation cooked up by research firm Gartner, the sheer computing capacity in active use on AWS server and storage hardware is roughly five times what’s available in aggregate from its 14 closest cloud computing competitors. AWS services are used by more 1 million active monthly customers, Jassy estimated.

Much of that lead is due to first-mover advantage, however, and new offerings from Google, Microsoft and Oracle are giving large businesses far broader options for moving mission-critical business applications out of on-site data centers and into the cloud.

So AWS is launching several new products due early in 2015 year intended to solidify its lead. They include a speedy new database (called Aurora), better encryption, business process management services, and additional technical support options. The common thread: all were developed in collaboration with existing customers that are migrating far more strategic applications and completely new digital services into cloud data centers.

“You can have different opinions about how complete and how fast this transition is going to happen, but it also seems apparent at this point that the cloud is becoming the new normal,” Jassy said.

During the first wave of adoption, many large companies dabbled with cloud services to development and testing of new applications—but few actually used cloud service providers to run the finished software, he noted.

Much of the current cloud transition centers on web site migrations (Unilever has moved more than 170), along with sophisticated analytics services (like ones for clinical data created by Pfizer) and mobile apps (such one created by Qantas for its flight attendants).

Philips Healthcare turned to the Amazon cloud to create its informatics and analytics because of the massive amount of data it needed to manage—it adds almost 1 petabyte of information every month. (For perspective, a petabyte is equivalent to about 1,000 terabyte and is enough memory to store the DNA of the entire U.S. population—and clone it twice.)

“Data alone is not enough, we needed to make it actionable. … There is only one company that could give us that scale,” said Philips Healthcare CEO Jeroen Tas, one of several AWS customers who showed up as on-stage references.

Another high-profile thumbs-up came from business software company Intuit. It is moving all its services and applications to AWS over the next several years. “It will help us speed development, innovate faster, and address our customers’ problems faster,” said Tayloe Stansbury, Intuit’s CTO. A big motivator: its experience with 10 acquisitions of smaller companies running IT operations on AWS. Intuit already moved one of its most strategic consumer products, the Mint personal financial service, to AWS.

Johnson & Johnson is also preparing to be more “bold” with its cloud computing investments. In large part, this is so it can introduce new products and services as quickly as smaller, more agile competitors. Right now, the pharmaceutical giant runs approximately 120 applications using cloud services. That number will triple over the next three years, according to J&J CTO Dan Zelem.

The company’s aim is to create “the borderless data center,” so that the experience for J&J employees, customers and business partners is seamless regardless the service or application they use. “This is a model that larger enterprises will face as a reality,” Zelem said.


Smartphone app uses pattern recognition to spot the fake. Product counterfeiters are so skillful that NEC has created a service—intended for retailers—that uses special imagery and analytics to verify whether luxury goods such as handbags or wallets are authentic. WSJ


Gartner Data Center Conference: Ideas for operations and management. (Dec. 2 – 5, Las Vegas)

IBM Interconnect 2015: Cloud and mobile strategy. (Feb. 22 – 26, 2015; Las Vegas)

Microsoft Convergence 2015: Dynamics solutions. (March 16 – 19, 2015; Atlanta)

Knowledge15: Automate enterprise IT services. (April 19-24, 2015; Las Vegas)

MicrosoftIgnite: Enterprise tech extravangaza. (May 4 – 8, 2015; Chicago)

SAPPHIRE NOW: The SAP universe. (May 5 – 7, 2015; Orlando, Fla.)

VMworld: The virtualization ecosystem. (Aug. 30 – Sept. 3, 2015; San Francisco)