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Data Sheet—Friday, March 6, 2015

Good morning, Data Sheet readers! Caterpillar has invested in an analytics technology company started by Groupon’s co-founder Brad Keywell. Like GE, it envisions substantial revenue from predictive maintenance. New research suggests self-driving cars could reduce healthcare and damage costs related to accidents. Plus, does your human resources software put employees or company processes first? It matters to Millennials.

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TOP OF MIND

What information can Caterpillar excavate from its massive machines? A better question, perhaps, is how can it make more money from same? To find the answer, the giant equipment company is investing in data analytics company Uptake—the latest company created by Groupon co-founder Brad Keywell. Its first focus is “predictive diagnostics.”

“Customers use our current technology for fleet monitoring and to track fuel efficiency, idle times, location and more,” said Doug Oberhelman, Chairman and CEO of Caterpillar, commenting on the investment. “Our existing solutions are effective, but it’s time we take it to the next level.

The two companies have collaborated since last year on a pilot project involving Caterpillar’s locomotive division. The success of that experiment inspired the investment. The services that Caterpillar develops will cover its own equipment, but they will also be available to other manufacturers and partners.

A similar predictive analytics initiative at GE already generates at least $1 billion annually in incremental services revenue.

TRENDING

Privacy vs. cybersecurity, redux. Many big businesses including Lockheed Martin and 3M support proposed federal legislation that would make it simpler for the corporate world and government agencies to share information about threats, new malware, and network break-ins. A first draft of the Senate bill is raising concerns over the potential for unauthorized government surveillance, reports The Wall Street Journal.

Google’s latest competition: insurance insurance brokers. California is the first market for Google Compare, essentially a price-shopping search engine for insurance quotes. So far, its partners include insurers MetLife and Mercury Insurance, along with two established sites, CoverHound and CompareNow.com.

You can drive my car. While we’re on the topic of auto insurance, consulting firm McKinsey estimates up to $190 billion in annual healthcare and damage costs could be eliminated through the use of self-driving vehicles. How good they will be at asking for directions remains to be seen.

The $80 billion jet engine made possible through 3-D printing. General Electric’s new Leap technology relies on fuel nozzles product through additive manufacturing technologies. Not only is the part stronger than past generations, but it can be produced far more cost-effectively. No wonder GE will invest $3.5 billion to scale the process.

Apple’s own stores hit with mobile payment fraud. Concerns were raised early this week about potential weaknesses in Apple Pay, so banks are making verification tougher. Apple’s retail operation has been a particular target: some fraudsters are using credit card information stolen through the Home Depot and Target data breaches to complete bogus transactions, reports WSJ.

Here’s the first official challenge to net neutrality. A group of Congressional Republicans has filed the “Internet Freedom Act,” legislation that would both block the FCC’s new rules and prevent it from trying to enact similar ones. The main sponsor, Marsha Blackburn (R-TN) wants to “protect our innovators.”

Big job cuts for SAP. Approximately 2,250 positions, or 3% of its total workforce, were eliminated to make way for almost the same number of new hires this year dedicated to its cloud services.

THE DOWNLOAD

The secret to talent management? Put employees, not employers first

It stands to reason that technology companies selling human resources software should know a thing or two about nurturing corporate culture.

Two prominent ones, Ultimate Software and Workday, both earned credible spots this week on the newly published 2015 Fortune “Best Places To Work For” ranking”. They were No. 21 and No. 22, respectively. This was Workday’s first time on the list; it is Ultimate’s fourth consecutive year.

For Ultimate founder and CEO Scott Scherr, culture is the ultimate differentiator. There are no non-competes, no employment contracts at his 25-year-old company. Every new employee receives equity, everyone can recite its business goals, and the company covers 100% of healthcare and dental premiums. “The true measure of a company is how they treat their lowest paid employee,” reads a prominent slogan posted in the Weston, Florida company’s lobby.

Likewise, it is Ultimate’s mission to help customers like Elizabeth Arden, Nikon and Herman Miller “do everything they can to keep their people first,” Scherr said.

The company’s original offering centered on payroll management (still its flagship service), but now Ultimate sells cloud software subscriptions to manage everything from recruiting to onboarding to benefits and time-tracking. During 2014, total revenue rose 23% to $506 million—net income reached $45 million. Looking ahead, Ultimate expects $600 million in revenue this year and $1 billion by 2018. With a customer retention rate of 96%, that doesn’t seem unrealistic.

Scherr believes talent management systems should put employees, not employers, first. Fresh research on workforce dynamics (sponsored by his company) drives this point home: one-third of new hires can predict whether they’ll stay with a company long-term within two weeks of being on the job. Millennials are particularly impatient: 42% would love some sort of weekly feedback.

“Employees across all generations now have the expectation that HR and payroll systems are extremely fast and efficient,” said Ultimate’s chief technology officer, Adam Rogers, commenting on the data. “They don’t expect to be asked to enter the same piece of information more than once, and they expect the system to be as easy to navigate as a consumer application.”

Of course, managers are employees, too. That’s why Ultimate includes analytics reports that help identify high performers or that predict which offices or facilities might be at risk of higher turnover. It does this by correlating data about overtime, gender, age, and geography.

In today’s culture of job hopping, Scherr is a bit of an anomaly. This is only his third company: his previous employers were ADP (hence his expertise in payroll) and his father’s company in Bronx, New York, where he developed the philosophy that shapes Ultimate today: “The only thing I knew was that business was there to take care of the people, and the people were there to take care of customers.”

ALSO WORTH SHARING

Misplaced hopes for mobile banking? There’s been much ado over the past decade about the potential for cell phones to change economies in emerging nations. Progress has been slower than anticipated: many people have accounts, but few are actively used, reports Reuters.

Shazam flirts with image recognition. Close to 100 million people use its mobile app to “listen” to songs and identify them. Now, the company is extending its reach to provide information about other things, such as a product on a store shelf.

The pre-IPO CFO hires continue. Evernote’s choice is Jeff Shotts, who previously guided finances at eBay and online retailer ModCloth. Cloud software companies Zscaler and Dropbox have also recently tapped outsiders with public company experience.

More apps for wearables maker Fitbit. It bought FitStar, which specials in producing personal training videos that run on mobile devices. The transaction value wasn’t disclosed, but TechCrunch reported it was $25 million to $40 million.

Want to use Google’s new wireless service? You’ll have to use its latest Nexus smartphone.

MY FORTUNE BOOKMARKS

Work-life balance is dead—here’s why that might be a good thing by Laura Vanderkam

Cisco’s plan to solve tech’s diversity problem: Start from the top by Caroline Fairchild

The race to the Internet of things by Michal Lev-Ram

Many scientists dismiss the fear of robots—here’s why by Erik Sherman

Here are the 10 highest-grossing sci-fi movies of all time by Daniel Bukszpan

ONE MORE THING

Google’s robotics team apparently wants little to do with military applications, to the chagrin of the Pentagon, reports The Wall Street Journal. It just bought one of the finalists in the Darpa Robotics Challenge and pulled its entry. What do you expect from a company that still preaches the motto: “You can make money without doing evil?”

MARK YOUR CALENDAR

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)