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Data Sheet—Friday, April 17, 2015

Good morning, Data Sheet readers. First, a public service announcement: the speaker lineup for this year’s Brainstorm Tech is ready! Among those prepping for main-stage appearance’s at Fortune’s 14th annual conference: GE CEO Jeff Immelt, Pixar President Ed Catmull, and Dion Weisler, who will head Hewlett-Packard’s personal computer spinout.

And now, the news. Apple is building solar plants in China, part of its quest for carbon neutrality. Yahoo and Microsoft amended their search relationship, which will let Marissa Mayer pursue her mobile dreams. Plus, some insight into new big-ticket funding rounds for collaboration startup Slack and “container” company Docker. Read on to get your Friday started. Wishing you all a great weekend!

TOP OF MIND

Yahoo and Microsoft come to terms on search. For the past five years, Yahoo has delivered Bing results for all of the searches completed by those visiting its site using a desktop browser. It got a big portion of that revenue, but still. This arrangement was part of the bargain when Yahoo sold its search technology to Microsoft in the first place. That deal was brokered by both companies’ CEOs, however, and the new ones are ready to move on.

The new agreement is less restrictive, plus it gives Yahoo’s sales team a chance to focus exclusively on their company’s own technology. All this gives Yahoo incentive to invest more heavily in personalization and other innovative digital advertising services.

Yahoo CEO Marissa Mayer, who once ran the search business for Google, has been itching to catch up in mobile. “This renewed agreement opens up significant opportunities in our partnership that I’m very excited to explore,” she said, commenting on the deal.

By the way, Microsoft forged another strategic relationship this week that could prove very strategic for its search business. The Bing services will be part of a bundling relationship with Cyanogen, which sells an open source version of the Android mobile operating system. If you’re not familiar with Cyanogen, it just raised another $80 million in funding.

TRENDING

Is Slack really worth $2.8 billion? Fortune’s Dan Primack demystifies the collaboration startup’s stunning valuation after a venture round it didn’t really need.

China backs off on banks, for now. Regulators temporarily suspended tougher security rules that made it far tougher for foreign technology suppliers—pretty much every legacy server and enterprise software company you can name—to sell into financial services. This doesn’t mean the regulation is gone, it’s just being “amended,” reports Reuters.

AMD CEO: PC market is “challenging.” Intel’s long-time rival also posted a weaker-than-expected first quarter for many of the same reasons Intel cited earlier this week. Plus, the company plans to sell off its “dense server” line, typically sold into data centers with space and power constraints.

In cloud data centers, custom hardware is winning out. Service providers spent approximately $24 billion on servers, storage and network gear for private and public clouds last year. The biggest chunk didn’t go to familiar tech titans. It went to original design manufacturers, companies building bespoke equipment: they accounted for almost 24% of the overall market, up 37.3% over the previous year. The only other company to post growth almost that dramatic was EMC, its cloud-related revenue was up 34.3%.

THE DOWNLOAD

Why Docker and its ‘containers’ are hot with investors

Today’s item comes from Fortune writer Jonathan Vanian, who specializes in coverage of transformative data center technologies. Stay tuned for more additions to our technology coverage team in the coming weeks.

This week, hot cloud company Docker landed a massive $95 million funding round led by the investment firm Insight Venture Partners that, according to a source, values the business at nearly $1 billion. Nevermind that Docker has yet to come up with a sustainable way to make money as its core product is open source — meaning no one has to pay to use it.

So what is it about Docker that has investors keen on breaking out their wallets?

“Momentum,” said Jeff Horing, managing director of Insight Venture Partners. “For a business-use case, it looks like it has a consumer-like adoption rate.”

Translation: Although focused on corporate customers, the business is quickly adding users like buzzy startups Snapchat, Uber and Pinterest.

Docker specializes in what’s known as “containers,” a suddenly trendy tech niche that promises to make it easier for businesses to develop software and operate data centers. The company is such a Silicon Valley celebrity now that legacy technology companies like Red Hat, Microsoft, and cloud computing providers like Amazon Web Services have partnered with it.

Developers can go to Docker’s website and download software to help them create sophisticated programs that require multiple databases and multiple servers. According to Docker, users have downloaded its service 300 million times.

Eventually, the company has to figure out a way to make money. Horing seems confident that it can, pointing to the growing number of coders who use its services across the globe. He acknowledged that the open source nature of its product complicates matters. But Horing said Docker’s early efforts at creating a paid service version of its product is a step in the right direction

“Definitely it has got a bit more risk on the business model,” Horing said about the challenge the company faces.

Right now, Horing agrees with Docker CEO Ben Golub, who told Fortune this week that the company wants to make sure it spreads the word and attracts more users rather than focus on steady revenue.

It’s a “if you build it, they will come” approach that sort of parallels one of Insight Venture Partners’s previously funded startups: Twitter. When Insight Venture Partners led a $100 million investment in Twitter roughly two years ago that valued the business at $1 billion, the tech community was a bit aghast because the company didn’t make much money at all.

When asked whether Docker can be compared to an enterprise-version of Twitter in terms of fast growth with little revenue, Horing agreed that there’s a “little bit of an analogy” between the two. Both companies created products that people are clearly using.

But Horing said Docker, based in San Francisco, has a clear business model based on developing products that lure more companies to consider purchasing paid accounts, like security features that are part of its paid services.

Investing in companies whose core technology is open-source is definitely more risky than plowing money into a business with proprietary technology. But it’s also a sign of the times.

Read the rest of Vanian’s perspective.

ALSO WORTH SHARING

$42.8 million for vertical cloud apps specialist. Vlocity was founded by former executives from Siebel Systems, Veeva, and NetSuite. The company sells industry-specific software (right now for telecommunications companies and insurers) that run on the Salesforce cloud. In fact, the cloud CRM giant’s venture arm is the lead investor in this found, along with consulting firm Accenture.

Has Meerkat already had its 15 minutes? In the battle of live video streaming apps, Periscope now has top billing. This analytics firm has the data to prove it.

A matter of timing. Here’s when you can really get your hands on an Apple Watch.

Instagram crackdown. The social photo-sharing service published stricter, far more explicit posting guidelines—primarily intended to discourage pornography and harassment.

Haven’t optimized your website for mobile visitors yet? You have until Tuesday to finish or your company’s Google search results could suffer.

Consolidation among rugged tablet makers. Even though IBM and Apple are pushing the iPad for corporate applications, most consumer tablets still aren’t suitable for harsh field, supply chain and medical applications. Motion Computing, the No. 2 supplier of purpose-built systems for that market, was just acquired by one of its competitors, Xplore Technologies. The biggest player (by far) in this market is Panasonic.

 

MY FORTUNE BOOKMARKS

Nosebleed territory: Apple gets its second $1 trillion valuation by Philip Elmer-DeWitt

Google’s legal woes in Europe might only just be beginning by Vivienne Walt

Spring, a mobile shopping app, raises $25 million by Leena Rao

Navdy, on the road to putting sci-fi screens in cars, raises $20 million by Kia Kokalitcheva

This is the year consumer drones get serious by Clay Dillow

How one company is using artificial intelligence to develop a cure for cancer by Cyrus Sanati

EyeEm, with latest funding, zooms in on its photo marketplace by Kia Kokalitcheva

 

ONE MORE THING

Downplay the melodrama. For those times when emoji are TOO LOUD, there are now “introji,” for more complicated mood statements within messaging apps.

MARK YOUR CALENDAR

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)

Grace Hopper Celebration of Women in Computing: World’s largest gather of women technologists. (Oct. 14 – 16; Houston)

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