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Data Sheet—Tuesday, March 3, 2015

March 3, 2015, 1:56 PM UTC

Good morning, Data Sheet readers. PayPal staked its claim in mobile payments. Apple beat out Samsung in fourth-quarter smartphone sales. The bill for safer credit-card transactions: $8.65 billion and climbing. Plus, why the flap over Hillary Clinton’s email account should be a wake-up call to businesses.

Mea culpa: it was actually Reuters (not Re/code) that broke yesterday’s item about EMC’s board deciding not to sell its VMware stake.

Thanks to everyone who sent feedback so far about the organizational structure and timing of this newsletter. Keep comments coming to Enjoy your Tuesday.


Hillary Clinton had no official government email address. Instead, the former Secretary of State's aides recently turned over 55,000 pages of records to the federal archive—after they filtered them. Clinton is not the first government official to use a personal email for official business, but security experts are questioning why her account wasn't automatically archived. And whether it was really secure.

Politics aside, the ensuing debate should prompt some corporate soul-searching. Remember those embarrassing emails sent by former Sony Pictures chief Amy Pascal—shared with the public by hackers? How much of your own company's communication happens outside official channels that could present a compliance or intellectual property issue? With more employees using notebooks, smartphones and tablets for both their personal and professional lives, those lines are apt to blur.


Retailers face big bill to make transactions safer. The cost of shifting to cards with embedded computer chips—far tougher to use in person—could reach an estimated $8.65 billion by October. The problem is this step only addresses about one-third of fraud incidents. Thieves can still use stolen numbers for online purchases.

That means retailers face a second wave of security updates after getting ready to handle the new cards effectively. “When banks and card companies are only concerned about shifting the liability to the retailer, you have to comply first,” Brooks Brothers CEO Claudio Del Vecchio told Reuters. “And then think of solutions to fix your problems.”

Watch out Apple, here comes Huawei. If you had any doubt about the Chinese company’s intent to dominate the global smartphone market, set them aside. “In the future, our main competition will be from Western companies, not Chinese companies,” Huawei’s consumer technology chief Richard Yu told the Wall Street Journal. “Most Chinese smartphone vendors will disappear in three to five years, and we’ll be the leading ones.”

Incidentally, according to Gartner research released Tuesday, Apple was the fast-growing smartphone company during the fourth quarter of 2014. It edged out Samsung—which has held that distinction since 2011. Huawei was No. 4, just behind Lenovo.

It’s PayPal’s turn to reach for its wallet. The soon-to-be-ex eBay business unit is buying mobile payments company Paydiant for an undisclosed sum. Its technology is used by merchants such as Subway, Target, Wal-Mart Stores, and Sears. The move follows new strategy declarations by rivals Google and Samsung.

Google, Facebook execs talk up wireless services. Their own. Both Internet giants are dabbling with ways to expand access, but both want telecommunications as partners not competitors.

Google is pitching its plan (confirmed during a Mobile World Congress speech) as a way to test innovative mobile applications. Later at the same conference, Facebook co-founder and CEO Mark Zuckerberg urged telecos not to worry about his company’s initiative to reach more places using drones, satellites and balloons. “The only way to accelerate is to grow the operator business faster,” he said during an on-stage interview with Wired.

Here’s the real reason investors are excited about Bitcoin startups. The underlying encryption technology for the digital currency could be useful for all manner of traditional transactions such as property title transfers, patents, stock certificates, and so on.


The quest to make mobile security innate

Passwords are easy to break and easy to forget. Smartphones, tablets and other mobile gadgets are easy to steal.

That’s why embedding tighter security into mobile devices through both biometrics and software to separate employees’ personal and professional lives is a key theme this week at the Mobile World Conference—with the likes of Intel, Qualcomm, BlackBerry, and upstart Blackphone leading the way.

Qualcomm, for example, is devising a way for fingerprints to be read through glass, plastic and metal using ultrasonics. That makes them harder to counterfeit, plus its approach could even be used to set different access levels for different applications.

Intel’s approach called TrueKey uses a device’s camera to create a two-step form of authentication that involves facial recognition. That’s especially useful when someone is outside wearing gloves or using their hands for some other task. Fujitsu is experimenting with similar biometrics.

All of these technologies should be on the market commercially this year; Intel will be the first mover.

Also worth serious consideration is BlackBerry’s plan to release versions of its highly respected security and management software for smartphones from its major competitors. After all, this is the reason its smartphone used to be wildly popular.

"I figured there was really a hidden gem and that we could build a good book of business," CEO John Chen told reporters in Barcelona. "People are still very much in love with our software capabilities and our robustness and our privacy and security" strengths, he said. "It all validated my idea that we should make our know-how there into a business."

Blackphone has built an entire company on developing tablets and smartphones that prioritize privacy. Along with its partner Silent Circle, it is talking up a new model that will allow users to create “spaces” that have different security levels. Your texting apps, for example, might include automatic encryption while games might be handled differently.

Samsung’s new Galaxy S6 includes a similar feature. The high-level benefit: it becomes far easier to segregate personal and professional information on a single device you probably use in both lives.


Need a smartphone charge? Just set it on that IKEA table. The furniture company now embeds wireless charging technology in one of its furniture lines.

Big-time disconnect on digital strategy. It’s not unusual for CIOs and CMOs to disagree on priorities, but nowhere is the divide bigger than in big pharma, according to a recent Accenture survey. “The reasons for the difference are steeped in traditional structures, cultures and sales representative-led commercial models,” notes Anne O’Riordan, senior managing director for Accenture’s Life Sciences industry group.

Can this software help close sales faster? Startup ToutApp has raised $15 million in Series B funding led by Andreessen Horowitz. Its service plugs into email systems (Gmail or Outlook) or customer relationship management applications (Salesforce and Microsoft Dynamics) to track and analyze interactions. Among the fast-growing companies using it: Atlassian, Dropbox, and Zenefits.

Well-funded cybersecurity startup Veracode is planning an IPO in the May timeframe, reports Fortune’s Dan Primack.

Attention retail, airline and banking execs. Three new mobile apps from the IBM-Apple partnership are out.

Windows Phone on hold. You won’t see Microsoft try really hard again with smartphones until late 2015, when it releases its next big operating system update. But partners like Acer are pretty busy outside the United States.


How the protections of net neutrality could create the next Google by Nicholas Economides

Here’s the new camera that could kill GoPro by Jack Linshy/Time

Why Paydiant is selling to PayPal by Dan Primack

Here’s what people hate about the glorious new Samsung phone by Ben Geier

5 of the most gorgeous smartwatches that are not made by Apple by Benjamin Snyder


Get ready for the ethics debate over “full-body transplants,” a gut-churning topic explored by Wired. Hasn’t this Italian neurosurgeon read Frankenstein?


DocuSign Momentum. E-signatures and digital transactions. (March 10 – 12; San Francisco)

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

IDC Directions 2015: Innovation in the 3rd Platform era. (March 18; Boston)

Cisco Leadership Council: CIO-CEO thought leadership. (March 18 - 20; Kiawah Island, South Carolina)

Technomy Bio: The big picture on transformation. (March 25; Mountain View, California)

Gartner Business Intelligence & Analytics Summit: Crossing the divide. (March 30 – April 1; Las Vegas)

AWS Summit. First in a series of cloud strategy briefings. (April 9; San Francisco)

Knowledge15: Automate IT services. (April 19 – 24; Las Vegas)

RSA Conference: The world talks security. (April 20 – 24; San Francisco)

Forrester’s Forum for Technology Leaders: Win in the age of the customer. (April 27 - 28; Orlando, Fla.)

MicrosoftIgnite: Business tech extravaganza. (May 4 – 8; Chicago)

NetSuite SuiteWorld: Cloud ERP strategy. (May 4 – 7; San Jose, California)

EMC World: Data strategy. (May 4 - 7; Las Vegas)

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

Gartner Digital Marketing Conference: Reach your destination faster. (May 5 – 7; San Diego)

Annual Global Technology, Media and Telecom Conference: JP Morgan’s 43rd invite-only event. (May 18 - 20; Boston)

HP Discover: Trends and technologies. (June 2 - 4; Las Vegas)

Brainstorm Tech: Fortune’s invite-only gathering of thinkers, influencers and entrepreneurs. (July 13 - 15; Aspen, Colorado)

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

Dreamforce: The Salesforce community. (Sept. 15 - 18; San Francisco)

Gartner Symposium ITxpo: CIOs and senior IT executives. (Oct. 4 - 8; Orlando, Florida)

Oracle OpenWorld: Customer and partner conference. (Oct. 25 - 29; San Francisco)