Data Sheet—Tuesday, March 31, 2015

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TOP OF MIND

IBM’s latest big bet: $3 billion on the Internet of things. Imagine adjusting store merchandising based on whether it will rain or snow over the next 48 hours. Alerting auto insurance policy holders to find shelter as a hailstorm approaches. Or anticipating spikes in electricity demand, using temperature and humidity metrics to consider historical data.

Those are just three scenarios made possible through a new global, strategic relationship between IBM and The Weather Company, parent of the Weather Channel and WSI, which licenses forecast information to businesses.

Under the deal, WSI will move most of its massive weather data service—which collects information from more than 100,000 sensors, aircraft and drones, and millions of smartphones—into IBM’s cloud service. The data involved supports more than 26 billion forecasts daily. Up until now, the Weather Company has been an oft-cited Amazon Web Services reference account.

IBM plans to use the WSI platform as the foundation for industry-specific analytics services for retailers, utility companies and insurers, as a start. The data will also be available to entrepreneurial software developers that want to use it to drive new applications and services delivered via IBM’s cloud. “Fundamentally, our mission is to help businesses anticipate weather and take action,” said Mark Gildersleeve, president of the organization, when we discussed the partnership.

As just one example of the business impact, the insurance scenario described above could save up to $25 per policy per year in regions where hail is prevalent. That works out to millions of dollars per year.

The WSI alliance will be shepherded by IBM’s new Internet of Things business unit, in which the giant tech company plans to invest $3 billion over the next four years.

Right now, IBM figures up to 90% of data generated by devices such as appliances, connected vehicles, smartphones and other connected devices is never analyzed.

Read the rest of my report about IBM’s new Internet of things division.

TRENDING

Meet the latest digital marketing unicorn, Sprinklr. The New York-based software company, which sells software for managing social media campaigns, has raised another $42 million from Intel Capital, Battery Ventures and Iconiq Capital. That brings its total to $123.5 million, and values the company around $1.17 billion. Sprinklr’s customers include McDonald’s, Verizon, Samsung, Intel, and Nike.

China delays bank technology crackdown. It is “suspending” regulations that would have required state-owned institutions to buy from domestic suppliers.

Wearables scenario. A new forecast predicts shipments of 45.7 million watches, bands, clothing sensors, eyewear and earwear this year. That’s up 133.4% from 19.6 million in 2014. The not-so-surprising catalyst: the “symbolic” Apple Watch launch next month.

THE DOWNLOAD

Why this security upstart aligned exclusively with one venture capital firm. Tanium co-founder Orion Hindawi took his first meeting with Andreessen Horowitz because to refuse would have seemed rude.

These days, he is far friendlier—the fast-growing, profitable security startup today disclosed its second substantial infusion from the firm, $52 million to be exact. Along with its $90 million mega-round announced in May 2014, that brings the total raised exclusively from Andreessen Horowitz to $142 million.

Why did Tanium cave? In short, the VC firm’s connections. “The reason you take their money is because of their executive briefing center. … It has been, by far, our most effective lead-generation engine to date,” Hindawi said, attributing at least half of the company’s business to the relationship.

It doesn’t hurt that Tanium also scored former Microsoft executive Steven Sinofsky as an “exceptionally smart” board member as a funding condition or that both of the VC firm’s co-founders have relevant knowledge in data center management, courtesy of their experience with Opsware. (The two main pieces of that company were acquired by EDS and Hewlett-Packard in 2002 and 2007, respectively.)

Tanium’s co-founders aren’t exactly slouches. Orion and his father David (the startup’s CEO) were able to bootstrap their latest venture with the money they made from the sale of their previous venture, patch management software company BigFix, to IBM in 2010. (The two left before the sale; Tanium was founded in 2007.)

What makes Tanium unique is its ability to detect and remediate security threats far more quickly than rival technologies, across both traditional computing infrastructure and systems that make up the Internet of things, like heart-rate monitors. Along with the funding, the company is updating its software with support for natural language queries and more connections to other big data platforms, such as analytics software from Palantir and Splunk.

“Tanium’s capability to navigate, interrogate, and act on even the largest enterprise network in seconds is the magic that fires up customers—networks compromised of millions of endpoints made up of PCs, servers, [virtual machines], and embedded devices,” Sinofsky wrote in a blog discussing its latest investment. “This 15-second capability is the foundation of Tanium magic and is unprecedented for large-scale environments.”

So far, Tanium has signed contracts with 50 of the Fortune 100, including five of the top U.S. banks and four of the top 10 retailers. Some of its biggest accounts are managing upwards of 500,000 devices, Orion Hindawi said.

The main motivation for this latest funding is to provide a “cushion” as Tanium ramps up its sales organization, he said. The company only hired its first enterprise sales representatives in January, but they have already managed to close at least two multimillion-dollar contracts.

At the beginning of 2014, Tanium employed only 25 or so people. Now it’s up to 175 and could reach 700 employees by the end of 2015. The company, which has been profitable since 2012, also quadrupled its growth in billings in 2014 and ended the year with approximately $100 million in cash. “We want to keep the company profitable as we grow,” Hindawi said.

As you might expect, Hindawi declined to disclose Tanium’s valuation after this “significant up round” or offer hints about initial public offering plans. He says the company feels “zero pressure” to make a move in the near future.

ALSO WORTH SHARING

Kleiner Perkins’ first post-trial investment, a mobile telemedicine app. It is part of a $15 million round for Spruce, a startup that connects dermatologists with patients for remote consultations about conditions like psoriasis or aging skin. Spruce’s founder, Ray Bradford, was a former investment partner at the firm.

Would you want to work here? Here’s a peek inside Facebook’s new, green-roofed headquarters—inside a 430,000-square-foot warehouse.

Uber leaps legal hurdle in France. The ride-sharing company is allowed to continue its low-cost UberPop service while courts consider the constitutional challenge to its vague new transportation law. One piece of the law, which fines unlicensed drivers, could accidentally have made even carpools illegal.

What keeps Google employees happy. The Internet giant’s policies have been copied by big companies like Costco and Wegman’s. So head of human resources Laszlo Brock is sharing his secrets in a new book, Work Rules!

MY FORTUNE BOOKMARKS

The surprising place where Amazon is testing its drones by Ben Geier

A big, untapped pool of potential tech talent by Anne Fisher

Bitcoin’s first criminal goes to prison today by Daniel Roberts

Apple accepting rival smartphones as part of its trade-in program by Jason Cipriani

Amazon wants to help you find a plumber by Ben Geier

ONE MORE THING

No more booth babes. Starting with next month’s event, organizers for the venerable RSA security confab have banned suggestive or revealing attire on the exhibit floor.

MARK YOUR CALENDAR

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)

Cornerstone Convergence: Connect, collaborate. (May 11 - 13; Los Angeles)

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

Signal: The modern communications conference. (May 19 - 20; San Francisco)

MongoDB World: Scale the universe. (June 1 - 2; New York)

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

Hadoop Summit San Jose: Mainstreaming adoption. (June 9 - 11; San Jose, California)

Red Hat Summit: Energize your enterprise. (June 23 - 26; Boston)

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)

BoxWorks 2015: Cloud collaboration solutions. (Sept. 28 - 30; San Francisco)

Workday Rising: Meet and share. (Sept. 28 - Oct. 1; Las Vegas)

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

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