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Data Sheet—Thursday, November 20, 2014

Good morning, Data Sheet readers! Salesforce expects slower sales for its next fiscal year. Everyone’s favorite geek, Steve Wozniak, just joined another storage technology startup. Plus, more than 40 members of the Fortune 500 now use technology from Castlight Health to scrutinize healthcare costs. Should your company?

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Cisco scrutiny. Looks like it will take a $188 million charge to settle a lawsuit with Rockstar, the holding company that bought most of the patents owned by now-defunct telecommunications company Nortel. (Rockstar was created by Apple, Microsoft, BlackBerry, Ericsson, and Sony to outbid Google for the ownership.) The money is expected to cover service providers like Time Warner Cable that use Cisco equipment for Internet services.

Plus, Cisco has been big on diversity for a long time. It began disclosing employee demographic data in 2005—long before many peers in Silicon Valley. The numbers have barely budged, although last week Cisco named a woman (Kelly Kramer) as its new CFO. Here’s how it’s trying to change things. Ars Technica, Fortune

Senator questions Uber’s privacy principles. As if the fervor over the company’s plan to “investigate” less than friendly journalists wasn’t enough now Minnesota’s Al Franken is asking for a detailed explanation of the ride-sharing company’s consumer privacy policy. New York Times

Salesforce reduces FY 2016 forecast. Yes, it reported a whopping 29% gain in third-quarter revenue (reaching $1.38 billion). Yes, its losses are narrowing (just $38.9 million compared with $124.4 last year). But, the company’s updated annual forecast for 20% to 21% in sales growth for fiscal 2016, represents a slower pace than analysts were expecting. Fortune

Koch brothers buy optical networking company. Their acquisition of Oplink Communications is valued at $445 million. After the deal closes, the organization will become part of Molex (which supplies electronic components to companies including Apple). Wall Street Journal

Why are Cisco and IBM embracing the “freemium” pricing model for some of their software applications? It’s all about appealing to the next generation of white-collar workers. ZDNet

Qualcomm cautious. China’s antitrust investigation is a drag on the wireless chipmaker’s five-year revenue outlook. Re/code

Concur shareholders concur. They’ve approved SAP’s proposed $8.3 billion takeover of the business expense software company. The deal could close by Dec. 4. And now, it’s “all about execution,” based on five-year-outlook comments made Wednesday by CEO Bill McDermott. ZDNet

Santa has elves. Amazon has robots. The retailer is using an automated army to move items around more quickly in its massive merchandise warehouses. WSJ


Mobile strategy moves way too slow. For more than half the companies writing mobile apps to automate a business process or improve customer outreach, the gestation period is seven months to one year. That’s stifling innovation and pushing average project costs to $270,000, according to research published today by Kinvey (a company that specializes in mobile development technology).

What lurks beneath. At least one-third of the U.S. workers surveyed by security technology GFI Software admitted they wouldn’t hesitate to download confidential documents, email messages and other intellectual property if they were to leave their employer—even though they understood it was illegal.


Woz joins new storage company. Apple co-founder Steve Wozniak is now chief scientist for Primary Data. The company has so far raised $63 million to develop a new approach to storage management in data centers. The founders are from the company that Woz used to advise, Fusion-io—acquired earlier this year by SanDisk for $1.1 billion. Gigaom

GE Ventures gets drone religion. It just invested an undisclosed sum in Airware, which makes unmanned aerial vehicles for commercial applications. GE sees the technology as vital for data collection tasks that are too “dull, dirty or dangerous” for humans.

Death to PowerPoint. Prezi has been loosening Microsoft’s hold on the business presentation software market for several years. It just disclosed a $57 million round from Spectrum Equity and Accel Partners to move things along. The number of people using the Prezi software just passed 50 million, double last year’s total. High-profile customers: Salesforce, Marriott and Lufthansa. TechCrunch


Time to ditch your desktop? Starwoods CEO Frits van Paasschen uses just a smartphone and a tablet—in part so he can build more empathy with traveling execs whom frequent his company’s hotels. Wall Street Journal 

Don’t forget to protect your “master” password. If your team uses special applications to manage log-in information for applications or online services, pay attention. New research suggests they are increasingly the focus of targeted attacks. Ars Technica



Staples still fighting to stay relevant in the digital age By Laura Lorenzetti

Finding innovative ideas in unexpected places By Anne Fisher

GoDaddy slows its IPO roll By Dan Primack

Alibaba debuts bonds to raise billions more post IPO By Laura Lorenzetti

20 great workplaces in retail By Christopher Tkaczyk

Your pharmacist called. You owe $1.3 trillion. By Erika Fry

These 7 companies spent more on CEO pay than federal taxes By Laura Lorenzetti


Ah, November, that special time of year when Americans get to re-enroll for health insurance and find out whether their costs will go up “just” 5% or whether they face a double-digit increase for the year to come.

This year, technology’s potential role in controlling seemingly unjustifiable increases is getting more attention than ever—in part because of wildly optimistic expectations surrounding consumer gadgets such as fitness bracelets.

Two illustrative examples from this month alone: Xerox’s unprecedented investment in telemedicine company HealthSpot, which plans to install its kiosks not just at medical facilities but also at big companies; and pharmaceutical giant Novartis AG’s growing interest in wearable technologies that can track the effectiveness of its drugs.

Another indicator is the customer traction being reported this autumn by Castlight Health, which made its rather controversial IPO in March. (The company debuted with a market cap of almost $3 billion, but its value currently stands around $1.01 billion.)

Every year, U.S. employers spend a whopping $620 billion on healthcare benefits with very little visibility into where that money goes. Castlight puts those costs under the microscope for at least 40 Fortune 500 companies including Google, Kraft Foods Group, Microsoft, and Wal-Mart.

Its service, called Enterprise Health Cloud, shows the prices a company’s employees pay for everything from cholesterol tests to magnetic resonance imaging (MRI) scans to wellness visits to their doctor. The vision is to help employers better understand these costs and to let employees make more informed decisions about what they can expect to pay and about the quality of care they will receive.

“They have a cockpit where they get a ton of analytics about where the money is spent,” said Castlight CEO and co-founder Giovanni (Gio) Colella, whose previous company, RelayHealth, was acquired by McKesson in 2006. Collela’s co-founders were Todd Park (co-founder of Athenahealth and the tech guru who helped fix the troubled site) and venture capitalist Bryan Roberts (Venrock).

Read my complete story on Castlight and digital healthcare.


Fidelity visualizes stock portfolios as virtual skyscrapers. When you plug in your information, it turns that data into models of buildings depicted on an urban landscape. You can see at a glance whether your Microsoft investment, for example, is worth from than your Procter & Gamble position. New York Times



Facebook bus drivers vote to unionize. Many Silicon Valley companies employee private transportation companies to shuttle employees around sprawling campuses, and the development sets a new precedent. Watch out, Google, you’re next on the list. New York Times


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)