Data Sheet—Friday, November 21, 2014
Good morning, Data Sheet readers. Google is experimenting with a service that lets web site visitors pay a fee to eliminate ads. Intel predicts profits for its mobile chip business in early 2016. Plus, scientist Jack Dangermond, founder of 45-year-old software company Esri, explains why geographic information—in the form of interactive maps—informs better business decisions.
Share Data Sheet with every person you know who has an interest in the business of technology. They can sign up here. I’m constantly evolving what I include (and don’t include) in this newsletter. Please send your feedback and coverage suggestions to the “tips” box. And have a super weekend!
Optimistic Intel. The chipmaker finally expects positive margins for its tablet business—which has been running at a loss to gain marketshare—in the first half of 2016. For next year, it’s expecting revenue growth in the mid-single digits. Intel also is merging its personal computer and mobile businesses to improve efficiencies, which should help.
Chairman Andy Bryant told attendees at the company’s annual analyst meeting: “I’m not going to tell you I’m proud of losing the kind of money we’re losing, but I’m also going to tell you I’m not embarrassed by it like I was a year ago about where we were. This is the price you pay for sitting on the sidelines for a number of years and then fighting your way back into the market.”
Intel’s outlook—and an unexpected 6 cents-per-share dividend increase to 96 cents—cheered investors: its shares reached almost $36 on Thursday, the highest level in 16 years. Reuters, San Jose Mercury News
A welcome end to the smartphone patent wars? Google has reached a deal to clear up its smartphone patent dispute with Rockstar Consortium, the group created by Apple, BlackBerry, Ericsson, Microsoft, and Sony. Terms weren’t disclosed. Rockstar is also settling a separate suit with Cisco for $188 million. Wall Street Journal
Beginning of the mobile malware invasion? Researchers say at least 4 million Android phones and devices are infected with a sophisticated rogue software program called NotCompatible. The technology can be used to send emails or steal passwords. It also eats up your battery life and data plan. New York Times
Alibaba’s treasure. The Chinese e-commerce giant Thursday sold $8 billion in bonds in a sale led by Morgan Stanley. Between that offering, and its recent IPO, the company has paid at least $291 million this year in fees to Wall Street underwriters. WSJ
POLICY & STRATEGY
Google thinks you’ll pay to kill Internet ads. The model is similar to public radio, where listener donations help pay for content. The new service, called Google Contributor, asks visitors to pay a set monthly fee to get rid of advertisements. It’s being tested with a small number of niche online publishers including The Onion, ScienceDaily, Urban Dictionary, and Mashable. Wired
Facebook’s flight plan. The social network is hiring engineers with aerospace-related experience to champion its mysterious drone project, intended to expand rural Internet service. Meanwhile, there’s been a worrisome increase in unmanned aircraft incidents near New York airports. Re/code, NYT
A quick thanks for the tips and comments making their way into the Data Sheet mailbox. Here are observations three readers allowed me to share.
On yesterday’s item about the resurgence of digital healthcare investments, Thomas Dooley of Sage Partners writes: “Excellent note on Castlight. … As one of the VCs we’ve visited (we’re working with a young company SnapHealth) said, ‘Someone will build a big business in this space.’ Castlight is early, but so were many search engines. See Yahoo, but the winner, Google, came later—think the same thing will happen here.”
Chas Glazer from California wishes tech billionaires like Steve Ballmer would give their money to students: “Instead of Steve Ballmer endowing $60 million for just 12 new professors (does not say how many years, it covers only that endowment is $5 million per professor) why not make scholarships available for the incoming students—full ride for the most financial hardship and 50% for others?”
Another reader, Tim Meyer, thinks Google’s Larry Page (Fortune’s “Businessperson of the Year”) should take a cue from the late Steve Jobs and say “No” more often to outrageous research projects: “Consider me a skeptic, but I am struggling to figure out what all these hobbies have to do with making money. … No one seems to point out the essential meaning of strategy, which is to make choices, which was what Jobs meant. Even now, many consider Android to be a failure, as it is largely out of Google’s control, and [the company] fails to leverage crucial links in the value chain such as mobile payment (this can only be done when you have both hardware and software control).”
Feeling passionate about something? Send comments to email@example.com. A note to the PR world: With rare exception, Data Sheet doesn’t cover product updates du jour.
MY FORTUNE.COM BOOKMARKS
Meet Airbnb’s hospitality guru By JP Mangalindan
The five countries with the highest corporate tax rates By Brian Dumaine
Top restaurants to spot a Fortune 500 CEO By Anne VanderMey
Executive jobs are making women depressed By Ben Geier
The MBA scholarship wars By Ethan Baron, Nathan Allen
Why Caterina Fake has no problem finding female engineers By Andrew Zaleski
HOW’S YOUR GEOSPATIAL LITERACY?
In Jack Dangermond’s world, an interactive map is worth 100 charts.
He’s biased, of course. The privately held geographic information systems (GIS) company Dangermond founded 45 years ago with his wife—Esri (or Environmental Systems Research Institute if you want to be all formal about it)—happens to be the market leader in this particular software category. Its technology is used by more than 350,000 organizations worldwide, including more than two-thirds of the Fortune 500.
Growth in the commercial sector is exploding, more government agencies and research organizations publish reams of historical data about communities around the world, including images, geographic information, and pretty much any sort of database you can imagine. “Executives are waking up to realize that they can do a lot better, save money, make better decisions if they optimize and start thinking geographically and have a location strategy,” Dangermond said.
Another major driver has been the uptick in mobile technology. “The app revolution is allowing the concepts we conceived of 50 years ago to come alive in consumer-like apps and consumer-like devices,” he observed.
Esri’s recent growth outside its traditional government stronghold is being driven largely by its ArcGIS service, which houses literally millions of maps available to any company that wants to overlay them with its own proprietary information. One example is a solar development site selection resource created by National Land Realty—which helps the real estate broker qualify sites far more quickly than previously possible. “We are able to do a much higher level of due diligence,” NLR’s chief operating officer, Dean Sinatra, told me earlier this year.
I spoke with Dangermond about his company’s growth potential among businesses and why you should paid far more attention in geography class. Here are excerpts of our conversation, edited for length and clarity.
What’s the competitive landscape?
The way I see the world is that there fantastic maps being created by Apple and Google and Bing and others that are in the simple mapping [category] embedded into consumer experiences, the search kind of experience, the location-based services kind of experience. Then there is the GIS world that is largely managing authoritative data sources, supporting geocentric workflows like fixing roads, making cities more livable through better planning, environmental management, forest management, drilling in the right location for oil, managing assets and utilities. Once you’ve distinguished those two different markets, then you can drill into competitive plays.
We aren’t into the consumer space because that space is largely dominated by search and advertising, and it has a consumer face to it. Our space has technology that faces the consumer, like a business-to-consumer map service or a citizen-facing application that a city government is using.
Why is ArcGIS such a big deal?
This is really about democratizing mapping and location analytics. This is best told by use cases. The city of Boston had about 120 GIS specialists, now they have several thousand web map users on our platform. … The city provides web mapping for all Excel users or for those that want to do self-service mapping. A large oil company in Europe used to have 400 of our GIS workflow users along with big database servers. Now they have more than 12,000 users using ArcGIS. Their executives are looking at what is going on in their own businesses. They are also able to drag and drop spreadsheets onto their map to see what the data tells them, live. Or they can use them for presentations.
From our perspective is best to support these markets with one platform: the best geocentric workflow stuff, plus the best web mapping. This stuff that can be embedded into other apps like SAP or SharePoint or Office or business intelligence platforms from SAP, Cognos, and IBM.
What do you believe are the most relevant applications for the Fortune 500?
Traditionally, GIS has been very strong in government. Local government, state government, national government. It has helped them improve things in four areas. It’s helped them communicate stories. It’s helped them make better decisions by doing spatial analytics. It’s been able to provide documentation of record, like parcel maps and inventory maps. And it’s been big in educational science. But in the last four years, our biggest growth in GIS applications has been the commercial sector, growing 30 percent year on year. Some of it is this new mapping platform.
Big companies are starting to look at a ‘locational’ strategy, and a mapping platform can help that quite a bit. Just simple maps across the whole enterprise and sharing maps between different groups. This is just exploding. They are looking at consumer maps like the Google Map, but then they look at their own data on their own platform and they just go crazy.
It takes a while for executives to understand that every company is a spatial company, fundamentally: where are our assets, where are our customers, where are our sales. But when they get it, they light up and say, ‘I want to get the geographic advantage.’
It doesn’t matter whether it’s small retailers or big retailers. It doesn’t whether it’s in transportation or logistics optimization. It’s right across the board. Even wholesalers, supply chain logistics. All these things are spatial, fundamentally.
FOR YOUR INNER TECHNOPHILE
Better than a Post-it note. Fitness tracking gadgets from Everykey and Bionym don’t just store data about your workout, they can be used to save encrypted passwords for software applications and web sites. WSJ
ONE MORE THING
Oh, the perks you’ll know. Martial arts classes. Whiskey tastings. Arts-and-crafts nights. High-tech companies are getting far more creative in their quest to lure (and retain) scare talent. WSJ
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)