Good morning, readers. Welcome to your Monday morning high-tech legal update. Among the highlights: Cisco has asked the ITC to keep rival Arista Networks from selling products while its intellectual property suits are considered, and HP has failed (again) to push through a shareholder settlement related to its massive write-down over Autonomy. Plus, now that TIBCO Software is private, its founder is considering investments in ‘fast data’ companies. Read on for my exit interview with Vivek Ranadive.
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Foreign exchange woes. In case you missed it, Oracle figures the rising dollar dampened its second-quarter revenue by about 7%. Software companies with substantial international sales are feeling similar pain including CA, Microsoft, Salesforce, and Symantec. Note several Jefferies & Co. analysts: "Given recent changes in FX rates, headwinds to top line growth due to the translation of foreign currencies to U.S. dollars for reporting purposes will be greater than they have been in 15 years for the average software company. Barrons
Cisco seeks Arista trade ban. The networking giant has filed an official complaint with the International Trade Commission to keep Arista Networks from selling products Cisco thinks infringe on its intellectual property, while the courts consider its case. Lawyers hope the move will speed up action on the copyright and patent lawsuits it filed against the upstart in early December.
Judge rejects Autonomy accord, again. Hewlett-Packard is trying desperately to put the $8.8 billion write-down related to its ill-fated acquisition of the British software maker in the past. It has bigger concerns, like how to split the company in two. But a California court doesn't think its latest proposal (the second so far) goes far enough to protect investors. Managers from both companies dispute what happened: HP is crying fraud, while Autonomy blames differences in accounting law. Bloomberg
Staples sizes data breach. The office retailer's cyber-attack during the back-to-school shopping season exposed roughly 1.16 million cards. That's still far smaller than the exposure at Home Depot (56 million cards) and Target (40 million). Reuters
More payments for patent, phone policies. Microsoft will fork over another $23 million to patent troll VirnetX Holding. It's to settle a dispute over communications technologies used in the Skype Internet calling service. (Microsoft has already paid out $200 million). A case is still pending against Apple related to several features in FaceTime. Meanwhile, T-Mobile's bill from the FCC for billing mobile phone customers on-the-sly for premium text messages is $90 million. AT&T and Sprint were fined $105 million each to settle similar charges. New York Times
POLICY & STRATEGY
Congressional compromise on net neutrality? A group of Republican lawmakers is preparing industry-backed legislation that could allow the FCC to prevent Internet service providers from charging subscribers for priority access to certain websites. But it would stop short of turning Internet service into a utility, which many tech companies believe would stifle innovation. The bill could be introduced in January. Washington Post
Another ride-sharing controversy: distracted driving. How do drivers for Uber, Lyft or Flywheel know when a fare is available? Through alerts to their smartphones—often viewed while they are on the road behind the wheel. Two lawsuits in California contend that this process is at odds with the state's law against driver use of handheld electronic devices. NYT
STARTUPS & DISRUPTORS
Massive valuation for Chinese smartphone maker Xiaomi. It hasn't been disclosed officially but it became a very public rumor over the weekend. Reports say Xiaomi is raising another $1 billion—making worth more than $45 billion. Among investors who appear to be involved: All-Stars Investment and Yunfeng Capital (affiliated with Alibaba chairman and China's richest man Jack Ma). During the third quarter, Xiaomi was the No. 4 vendor in global smartphone shipments ahead of Lenovo. Wall Street Journal
Vivek Ranadivé, founder, TIBCO Software
In early December, TIBCO Software officially became a private company through a $4.2 billion buyout by Vista Equity Partners—despite a hiccup in the process that overstated the number of shares outstanding. It's one of several software makers to exit the public market this year after pressure from activist shareholders.
That same day, founder Vivek Ranadivé officially handed his CEO title to chief operating officer, Murray Rode. He'll remain a director, with a focus on technology direction. "To make something of value and beauty, you need an irritant, and that is my principal role, to be the irritant," Ranadivé said.
You'll also see him invest in tech companies focused on using real-time data as the catalyst for actionable insights or services—a common refrain throughout the India-born executive's career.
Just three recent examples where Ranadivé said he has already played a role: Sensity Systems (smart LED lighting), Pipedrive (sales pipeline management for small companies), and Gametime (mobile apps for last-minute tickets to sporting events). If probably goes without saying that Ranadivé will also spend considerably more time in Sacramento, Calif., where he is best-known as a managing partner for the Kings NBA basketball team.
I caught up with the software entrepreneur for a brief exit interview one week after the TIBCO transaction was completed. His remarks were edited for clarity and length.
What drove the decision to go private?
I believe that in the current public context we couldn't really make the kind of long-term commitments we needed in order to fully exploit the opportunity ahead, and that it would be better for our customers and our employees to do that as a private company. We also wanted to pivot in certain parts of our business into a cloud model. We wanted to invest in certain products in terms of R&D. We wanted to do certain kinds of deals. As a public company, that was all very difficult to do. I believe that there will be more and more companies that will take this path. Michael Dell did it before me. … There's a hole in the public markets right now, and [activist investors] are going to drive out really good companies.
Now that the transaction is complete, what is priority one?
Now [TIBCO is] able to basically break out business into a high-touch model with a lot of sales and service, and a low-touch model where we do the business in a very cloud-based model. We are able to also invest in products over the long term. We are able to hire salespeople to expand in certain areas.
There are a number of things we can do, both in terms of investments but also in terms of business model that were hard to do as a public company. So, the top priority is really to make sure that we are able to give our customers options in terms of how they want to consume our innovation. They should be able to consume it through a high-touch model or just over the cloud, and try it out. We are able to do all of these things that we couldn't do as a public company.
Explain for the non-technical businessperson what TIBCO's software does.
TIBCO is probably the most sophisticated and well-known and biggest big data company. We are able to look at large, large quantities of data. Not just old data, but new data, real-time data. We call that data 'fast data'. We are able to look at that and find patterns—you are about to lose a customer, the power is about to go out, you might have a network outage. Then, we can take actions based on that. All of that is what we call a fast data platform, where you can basically look at different kinds of data, connect them, come to actionable insights, and then take actions.
Explain your 'Civilization 3.0' concept, which you use to advocate TIBCO's data integration software.
In Civilization 3.0 every business is really a social network on one hand, through its customers, and it's got perishable inventory on the other hand. Whether you are selling tickets to a basketball game or hotel rooms or hospital beds or consumer electronics or clothes—these [things] all decline in value over time, they are all perishable. So, what you need to do is merge or map or marry that perishable inventory with information about your social network. That is the very definition of the modern business. And, in order to do that, you need to have a fast data platform.
Where do you go from here?
I'm very excited about the next 15 years. During the last 15 years, we saw some change. The next 15 years will bring even more dramatic change. It's the age where math will trump science, where you will see the extreme rise of mobility. … I believe the next 15 years are going to make the world a better place in a way that no 15-year span ever has. We are going to wipe out many diseases. The world will be lit up with LEDs, we will use energy much more efficiently, big data is going to apply to agriculture, to medicine, to just about every field. I'm hoping that I will be involved with a lot of those companies.
Do you explicitly fund or focus on fast data companies?
I have been investing as an individual, but as time evolves I will probably create a more formal fund to do that. Right now, I invest with other people, and I've invested in some big companies. I just see the next 15 years as very exciting years to be in the technology space. At the end of the day, I'm a technologist, and that's what I love.
MY FORTUNE.COM BOOKMARKS
Why the next world war will be fought over food By Mark Koba
By cyber warfare is so attractive to small nations By Peter Suciu
Turning girls of color into robot-obsessed techies By Shalene Gupta
Sony's conundrum: Whether to release 'The Interview' online By Robert Hackett
Rent the Runway raises $60 million By Erin Griffith
FOR YOUR INNER TECHNOPHILE
This smartphone will self-destruct. In its earnings call late last week, BlackBerry revealed it's working on an Android mobile device that will automatically erase all the data if someone tries to take it apart. The technology is being developed for defense contractor Boeing as part of a project initially announced two years ago. No one is publicly discussing a release data, although the fact that BlackBerry is now able to announce its participation suggests it's coming soon. Re/code, The Verge
ONE MORE THING
Instagram worth more than Twitter. The photo-sharing network was bought two years ago by Facebook for $1 billion. Now it has 300 million monthly active users and (according to a new estimate by Citibank) it's worth about $35 billion. By comparison, Twitter's user count is about 284 million and its public market capitalization is around $23 billion. Wired
MARK YOUR CALENDAR
IBM Interconnect 2015: Cloud and mobile strategy. (Feb. 22 – 26, 2015; Las Vegas)
Gartner CIO Leadership Forum: Digital business strategy. (March 1 – 3, 2015; Phoenix)
Microsoft Convergence 2015: Dynamics solutions. (March 16 – 19, 2015; Atlanta)
Gartner Business Intelligence & Analytics Summit: Crossing the divide. (March 30 – April 1, 2015; Las Vegas)
Knowledge15: Automate enterprise IT services. (April 19 – 24, 2015; Las Vegas)
RSA Conference 2015: The world talks security. (April 20 – 24, 2015; San Francisco)
MicrosoftIgnite: Enterprise tech extravaganza. (May 4 – 8, 2015; Chicago)
NetSuite SuiteWorld: Cloud ERP strategy. (May 4 – 7, 2015; San Jose, Calif.)
SAPPHIRE NOW: The SAP universe. (May 5 – 7, 2015; Orlando, Fla.)
Gartner Digital Marketing Conference 2015: Reach your destination faster. (May 5 – 7; San Diego)