Data Sheet—Friday, November 14, 2014
Good morning, Data Sheet readers! Google CEO and co-founder Larry Page tops Fortune‘s latest “Businessperson of the Year” ranking. His “daring” risks in transportation, medicine and robotics draw comparisons with legendary inventor Thomas Edison. Skeptics are less kind, describing Google’s tactics as “brutish.” Plus, a new analysis finds successful venture-backed startups reach $1 billion valuations three times faster than a decade ago. It’s a matter of survival.
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Larry Page isn’t the next Steve Jobs. He’s far more ambitious. While the late Apple co-founder focused on just one or two things at a time, Page seems to inhabit an alternate universe where everything is possible. Three of the more visible projects at his GoogleX research and development organization: High-tech balloons that extend Internet access to remote rural areas. Ingestible nanoparticles that fight cancers. Autonomous robots that free up humans for more meaningful work. And those are just the ones that have made it into the press.
“We’d like to have a bigger impact on the world by doing more things,” Google’s CEO told Fortune, for the magazine’s “Businessperson of the Year” cover story.
Notes longtime Google analyst Ben Schachter (Macquarie Securities): “They have almost cartoon-like ambitions. Some, including us, think of that as a positive.”
What’s your opinion of Page’s hand-in-everything innovation strategy? Send comments to firstname.lastname@example.org.
Standard & Poor’s isn’t buying Twitter’s business model. It just earned a junk credit rating, while e-commerce mammoth Alibaba Group gets an A+ just in time for its planned $8 billion bond sale. The latter just supported $9 billion in sales for one day. Fortune, Wall Street Journal
SAP, Oracle finally settle lengthy copyright dispute. The $359 million settlement covering illegal software downloads is far smaller than the $1.3 billion award granted by a jury. WSJ
Safer smartphones. Setting aside a long-time rivalry, Samsung will use technology from BlackBerry to protect Android tablets and devices. Meanwhile, the U.S. government is warning iPhone and iPad owners about a vulnerability that could allow hackers to steal log-in credentials and other data. New York Times, Reuters
Here’s the password. Microsoft snapped up Israeli identity management company Aorato for an undisclosed sum, although sources value the transaction at $200 million. The technology offers tighter access controls, especially for cloud services. A better-known company in this space is Okta, which just strengthened its technology for mobile device protection. TechCrunch, eWeek
Impressive debut. The information technology division of Samsung just became one of South Korea’s biggest publicly traded companies, almost doubling its IPO price to $173 per share on the first day. WSJ
It’s Wall Street versus Silicon Valley in the battle to recruit the best data scientists and software programmers. Goldman Sachs now employs 1,223 “strats”—a cross between programmer and banker—and there are 8,000 on its tech team, the firm’s biggest single division. Bonus: six software engineers just made partner (the firm’s highest honor). NYT
Spy in the sky. The Justice Department is using small airplanes equipped with cell-phone transmission equipment to intercept and record thousands of calls per flight. The target is criminal suspects, but your data is probably being collected, too. WSJ
Equal parts startup envy, operational efficiency. As I reported yesterday in my coverage of Amazon’s re:Invent conference, more big companies consider cloud data centers the “new normal” for running mission-critical systems and business processes.
Unlike just two years ago, though, these migrations have just as much to do with innovation and the new to experiment (fast!) as they do with keeping costs low. “Agility is the holy grail, the ability to experiment and deliver new functionality quickly,” said Phil Sant, co-founder and chief engineer of music services company Omnifone, which runs its operations on Amazon Web Services (AWS). “Competition is murderous.”
That refrain was sounded often during the two keynote briefing sessions I attended this week, repeated by the likes of Intuit, Johnson & Johnson. “The focus is on minimizing the time to insight,” said J&J CTO Dan Zelem.
By offloading things like server administration, security updates, provisioning and other management tasks to cloud service providers, businesses can free up application development teams to dream up new products. “Developers are fundamentally content creators, fundamentally authors,” said Ben Golub, co-founder of Docker, which sells technology for distributing software applications across data centers—and as of this week, an AWS strategic partner. “Amazing things happen when you separate authors from concerns about production and distribution.”
Serious need for speed. Over the past two months, the “burn rate” spending habits of venture-based startups have attracted far more attention—and inspired growing concern in the fundraising community. A new revelation underscores the debate: market capitalizations for venture-backed technology startups are reaching the $1 billion milestone three times faster than those created just one decade ago.
That’s according to an analysis of close to 52,000 funding rounds and another 52,000 M&A deals by Silicon Valley advisory firm Play Bigger. (Be forewarned, registration is required to download the report.)
The research suggests the typical consumer tech company is growing its market cap by $600 million per year, compared with $100 million for enterprise tech startups. (Market cap was measured by a company’s public valuation, or its valuation at the time of a takeover, or its valuation following its latest round of funding.) According to Play Bigger, 83 U.S. venture-backed companies founded since 2000 have reached the $1 billion threshold.
Why does this so-called “time to market cap” metric matter? Play Bigger suggests that if a company hasn’t reached a $500 million valuation within six years, the chances of it becoming the dominant company in its category are far slimmer.
The report notes: “Simply stated, winners are winning measurably faster. They are reaching market cap milestones at almost triple the rate of predecessors from just over a decade ago. At the same time, losers are losing more quickly than ever. This has been a widespread gut feeling in technology circles, but now it is provably true, with a number of surprising ramifications.”
Given this metric, who’s toast and who should we toast? Share your opinions at email@example.com.
MY FORTUNE.COM BOOKMARKS
Sony debuts PlayStation Vue, a cloud-based TV service By John Gaudiosi
Reddit’s new CEO may not be ‘interim’ for long By Dan Primack
Amazon goes to war again (and again) By Adam Lashinsky
For women, being rich is not a priority By Caroline Fairchild
Taylor Swift on why she ditched streaming music service Spotify By Benjamin Snyder
ONE MORE THING
Robots on parade, er patrol! What looks kind of like R2-D2 from the “Star Wars” movie franchise and is designed to do the work of a human security guard, scaring off unwelcome visitors on your corporate campus? It’s the K5 from Silicon Vaelly startup Knightscope, being tested by the likes of Microsoft. MIT Technology Review
MARK YOUR CALENDAR
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)