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Data Sheet—Thursday, April 16, 2015

April 16, 2015, 12:34 PM UTC

Good morning, Data Sheet readers. Hewlett-Packard CEO Meg Whitman is the richest woman in tech with a net worth of $1.3 billion, although Facebook COO Sheryl Sandberg (who is No. 2) doesn’t have much to complain about. Security and privacy experts are worried that federal efforts to protect consumer data will backfire. Jawbone is talking up two new products. Plus, Workday’s HR customers are buying into its financial management applications. Enjoy a productive Thursday!


How the federal breach notification law could actually discourage disclosure. A national bill that would require businesses to alert customers about personal data leaks within 30 days is progressing in Washington. A draft was just approved by the House Energy and Commerce Committee. Not so fast, urge privacy advocates! They’re worried about a clause that lets businesses off the hook if “there is no reasonable risk of identity theft, economic loss, economic harm, or financial fraud.” That's a pretty large "out" clause.

While I’m on the subject of security, two other developments to share.

First, IBM will open access to its massive database of insights and intelligence about cyber threats. Dubbed X-Force Exchange, it includes malware information from 270 million computers and all manner of other devices.

Second, check out this New York Times report about “ransomware,” an emerging threat generally targeted at smaller companies (at least for more). The term describes a category of attacks in which hackers essentially kidnap important documents, encrypting them so they can’t be read. Want to regain access? You’ll have to pay a ransom or hire a security expert to unlock them.


What Google can learn from Microsoft. The European Union’s decision to pursue antitrust charges against the Internet search giant is hardly surprising. Its rivals, especially 40-year-old Microsoft, have lobbied far more vocally for the past six months. If you use Microsoft's own European antitrust troubles as a guide—it ultimately paid more than $3 billion—we can expect a very long fight. The irony: the pace of technology innovation is far faster than a decade ago. Which begs the question from some experts: what's the point?

Los Angeles schools aren’t happy with their iPads. A $1.3 billion initiative to put a tablet computer in the hands of every student is considered a failure, and the nation’s second-largest school district may want its money back from Apple and controversial curriculum company Pearson. The city's general counsel told the Los Angeles Times that schools were directed to refuse new deliveries. An FBI investigaton into the contract is ongoing.

Brand reveal. Hewlett-Packard CEO Meg Whitman took to the company’s blogosphere to show off the enterprise company’s new logo. It’s simple. It’s got a touch of green. And, there’s no hyphen.

Who’s inclined to buy Apple Watch? Fewer than 10% of U.S. adults, mostly men.

Attention marketers, you may have missed this. The hullabaloo over Google’s antitrust problems overshadowed The Wall Street Journal’s report about a potential new service that would help advertisers target messages to existing customers. Central to the plan: email addresses.


Workday is starting to live up to the entire promise of its name

Many still think of the company first for human resources software, but more than 135 companies have now signed up for Workday’s broader financial management applications. At least half are already up and running, including media disruptor Netflix, travel site TripAdvisor, commercial real estate manager Cushman & Wakefield, and health-club chain Life Time Fitness.

Most of these accounts already use Workday’s payroll and human capital management systems, and hope to drive even more operational efficiency by connecting them. Life Time Fitness, as an example, shaved at least two days off the company’s monthly close, said John Hugo, senior vice president and corporate controller. “The efficiency is really coming into play,” he said.

According to Workday, many businesses that use its financial software together with its HR and payroll applications are speeding quarterly and annual closes an average of 20% to 25%. They also report tighter supplier management efficiencies: reducing operational expenses for this area an average of 1% to 2%.

“It’s always about talent and cost, connected with how much revenue a person can drive,” said Mike Stankey, Workday’s president and COO, told Fortune. “Our strength at Workday is unifying that picture, so people can get an answer with real-time data across all three of those areas.”

For perspective, Workday’s total customer count is 925 companies, so it has a big upselling job ahead.

For the past three years, however, its satisfaction rate has been 97%, which explains its ability to poach marquee Oracle accounts like ING Bank Netherlands. “We put a heavy emphasis on building long-term relationships. … Our customers need to renew with us to make our business model work,” Stankey said.

For its fiscal year ended Jan. 31, 2015, Workday recorded revenue of almost $790 million, up about 65% from the prior year. Its operating loss was $215.7 million. That translated into a net loss of $1.35 per basic and diluted share.

“In the year ahead, we will focus on strategic initiatives including continued investment in our financial management product, growth of our presence in the education and government industries, and expansion of the business globally,” said Workday co-founder and CEO Aneel Bhusri, commenting on the results.

Indeed, as part of its update for investors, Workday revealed it appointed former PeopleSoft co-president Phil Wilmington (most recently at cloud financial software company Tidemark) to build its sales presence in fast-growing markets such as Germany and Japan. You’ll also hear Workday talk up its success among manufacturers and materials-intensive businesses. High-profile references already include Flextronics, Hewlett-Packard, Philips Electronics, and Unilever.

“Even a manufacturer spends 30% to 50% [of all operational expenses] on people,” Stankey said. “There hasn’t been as much science and discipline applied to the optimization of the human capital supply chain. So, large-sized organizations and medium-sized organizations are now changing their spend, their investment in IT for the optimization of people. We’ve benefitted from that greatly.”

In early April, Workday delivered two new products with widespread appeal.

The first, a predictive analytics dashboard called Workday Talent Insights, identifies which employees are underperforming or, conversely, which top performers might present retention risks.

“If I can predict with a high level of certainty who might leave and, as importantly, if I can prescribe actions to keep them in place, suddenly I have a very valuable piece of insight that I can offer my customers,” Stankey said.

The other offering, Workday PSA (Professional Services Automation) is meant to help managers make more informed decisions about which employees to assign to certain projects. That could be based on everything from geographic location to skills and hourly billing rates to how effectively someone has worked with other members of the team in the past. Alternatively, the application could alert qualified employees about potential new roles—another twist on retention.

“If you know, as an employee, that you might have interesting opportunities, you might be more inclined to stay with a company,” Stankey said.


Jawbone flexes its muscle. The fitness wearables company hopes two new products (UP2 and UP4, which can accept mobile payments) will help consumers forget about recent troubles. It is also finally ready to deliver the delayed UP3 edition, which includes heart sensors but isn’t water-resistant as originally promised.

Record signups for Netflix. The media company topped 60 million subscribers during its first quarter, which buoyed revenue by 24%. But profits were down for a now-familiar reason: the strong dollar.

This does not bode well. SanDisk just logged its first down quarter in two years, after losing a customer. While the results weren’t a total surprise, the computer memory company also dramatically reduced its full-year guidance.

This startup prioritizes your big data projects. Pepperdata’s software speeds and balances analytics jobs running across Hadoop clusters. The company just closed $15 million in Series B funding led by Wing Ventures. “Their technology powers some of the largest Hadoop installations across a range of industries, and we are excited to explore its application within Citi's Big Data environments,” said Ramneek Gupta, managing director at Citi Ventures, which also invested in this latest round.

Recharge for Segway? Chinese rival Ninebot just bought the iconic gyroscopic scooter company for an undisclosed sum. The two have been embroiled in a patent dispute.


In the EU, Google’s idealism meets its match by Verne Kopytoff

Etsy prices IPO at $16 per share, valuing company at $1.78 billion by Erin Griffith

Acorns, the app that automatically invests your spare change, raises $23 million by Kia Kokalitcheva

How this Google executive handles stress at work by Margo Georgiadis

Exclusive: Tech publisher Purch raising up to $60 million by Erin Griffith

This limited batch cognac from Hennessy only costs $600 a bottle by Shivani Vora

Meet the woman behind GE’s new TV show by Patricia Sellers

Could these apps solve America’s huge food waste problem? by Colleen Kane


A mobile approach to wage garnishment. Xerox is working on an app that helps employers withhold child support payments.


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)

Cloud Foundry Summit: Open source development. (May 11 - 12; Santa Clara, California)

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)

MuleSoft Connect: Tie together apps, data and devices. (May 27 - 29; San Francisco)

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

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

Apple Worldwide Developers Conference: Future of iOS and OS X. (June 8 - 12; San Francisco)

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)

LinuxCon North America: All about open source. (Aug. 17 - 19; Seattle)

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)

HP Engage: Big data, big engagement. (Oct. 4 - 6; San Diego)

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

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