Happy Thursday, readers. Advanced Micro Devices hopes to reverses its losses by the end of 2015. Giant Chinese e-commerce company is getting a new CEO. Social analytics startup Banjo is obviously striking a chord with investors: it just snagged another $100 million. Plus, Cisco’s new CEO Chuck Robbins doesn’t have much time to get up to speed. One of the first challenges he faces: how to create a credible strategy in software-defined networking. If you find Data Sheet useful, share this link for today’s edition and encourage your colleagues to subscribe.
TOP OF MIND
AMD CEO Lisa Su predicts return to profitability later this year. The chipmaker’s plan is to prioritize market segments where people are willing to pay a premium for advanced technology such as "immersive" virtual reality systems and commercial applications where high-end graphics are appreciated. Despite recently selling its custom server chip business, AMD also has big data center aspirations. It only generates $300 million in annual sales on this area now, but Su thinks it's a $15 billion opportunity.
Social analytics startup Banjo gets $100 million to go on hiring spree. Softbank and BlueRun are making a big bet on the four-year-old company, which uses big data to gather insights about locations all over the world. CEO Damien Patton didn't take the biggest offer; he just needs enough to "hire the smartest data engineers on the planet to solve the hardest problem on the planet today."
Giant Chinese drone maker DJI Technology just got a $75 million infusion. Reports from Reuters and The Wall Street Journal list Accel Partners as the investor, but they disagree on valuation: $10 billion versus $8 billion, respectively. Naturally, neither the round nor the mammoth valuation was disclosed officially.
Meanwhile, the FAA is easing up on one of its drone restrictions. It will allow two companies, PrecisionHawk and BNSF Railway, to test unmanned aircraft that don’t have to be in the operator’s line of sight. That bodes well for Amazon's package delivery scheme and for agricultural applications, such as crop dusting.
Storage giant EMC is finally becoming a fan of open source technology. Now, it just has to convince rivals it is serious. By the way, Dell just seriously slashed the price for its entry-level corporate storage offering. That could inspire the likes of EMC, Hewlett-Packard and Oracle to do the same.
Alibaba swaps CEOs. The company’s chief operating officer, Daniel Zhang, will take over May 10. Its current CEO, Jonathan Lu, will become vice chairman. That news, along with a better first quarter than expected, pushed the company’s U.S. stock up 7.5% in premarket trading.
Here’s how GE use cloud services to develop and release new business applications quickly, without sacrificing corporate security protocol: software “bots” that automate the process.
Robinhood rakes in another $50 million. The no-fee stock trading app has attracted “hundreds of thousands” of registered users since December.
This networking tech could erode Cisco’s dominance
What’s one immediate challenge for new CEO Chuck Robbins? Advancing a credible strategy for software-defined networking, reports Fortune’s Jonathan Vanian.
Networking giant Cisco is at a turning point.
Earlier this week, the company announced that longtime CEO John Chambers would be relinquishing his title and handing over the reigns to Chuck Robbins, Cisco’s senior vice president of worldwide field operations.
On a conference call with reporters explaining the leadership transition, Chambers reportedly said of his successor, “He’ll make the changes that need to be made.”
His comments couldn’t be clearer. Over the past few years, Cisco has been feeling the pressure from a wave of networking startups and emerging companies developing technology that could threaten Cisco’s dominance in networking.
These companies, many of which are comprised of former Cisco employees as well as former staff from legacy networking big wigs like Juniper Networks, have been picking up steam and landing massive funding rounds as of late. In January, Palo Alto-based Pluribus Networks raked in $50 million and just this week, a startup called CloudGenix brought in $25 million. Both CEOs of those two startups held leadership positions at Cisco before founding their respective companies.
The startups seem to be following in the footsteps of Arista Networks, which raised $226 million in its 2014 IPO and maintains customers like Morgan Stanley and Microsoft. It should be noted that in December, Cisco sued Arista Networks for patent and copyright infringement and Arista’s CEO, Jayshree Ullal, is a former Cisco veteran as well.
The common thread that binds all these businesses together is a type of technology known as software-defined networking (SDN). The startups developing this networking technology promise companies that they won’t be forced to buy proprietary networking gear like switches and routers from Goliaths like Cisco who have long dominated the space.
Instead of buying expensive routers from the traditional hardware vendors, these startups claim that you can instead install their own versions of specialized networking software into cheaper, commodity servers, like those sold by the Taiwan-based manufacturer Quanta. Through the power of software, one can supposedly program these commodity servers with the ability to take on the tasks of conventional networking gear.
Want to route the traffic in your data center without actually using an expensive router? Now you can by essentially bundling in software into a commodity server that morphs it into a data-routing machine.
Using software to program those commodity boxes also lets people create new features to make the machines more powerful.
Last fall, Facebook showed the world new networking software that coordinates all the web traffic that bounces throughout its brand new data center in Altoona, Iowa. With the software plugged into non-proprietary networking gear, Facebook can monitor when one of those devices fails and the software brains that coordinate the data center traffic can basically resurrect whichever machine went down. Facebook has long supported the idea of using customized software to optimize its data center and claims that by doing so, the company has saved a lot of money.
Of course, Cisco and other big networking companies are not oblivious to the flexibility of using software to coordinate networking.
Cisco has been busy creating its own lineup of products that the company claims gives consumers as many options as the products sold by competitors. However, Cisco is still fighting off the feeling that buying a Cisco product means you have to always buy Cisco gear and be locked into their world.
CloudGenix CEO Kumar Ramachandran said in an interview with Fortune that the reason he could not develop the type of product his team is making during his stint at Cisco was because of the nature of the product being software. Selling software ultimately undercuts cuts Cisco’s ability to sell more hardware gear, which still generates the bulk of its profits.
Still, Cisco does have an important advantage. Visit Fortune.com for the rest of Vanian’s analysis.
ALSO WORTH SHARING
Officially coming to virtual reality enthusiasts in Q1 2016, the Oculus Rift headset.
Here’s how livestreaming app Meerkat plans to fight back against Twitter. For one thing, it now works on Facebook. For another, it is encouraging other developers to create complementary apps for its platforms.
Home Depot plans to use Apple Pay in more than 2,000 stores. That would make it the largest retailer so far to support the mobile payments platform. But a deal isn’t final yet, reports Bloomberg.
Another acquisition for Atlassian. This time, the collaboration software company is buying some group chat technology. It’s part of a quest to score more fans among non-technical teams.
More job cuts for game maker Zynga. The plan could save $100 million on an annualized, pre-tax basis by cutting approximately 18% of its workforce. The revelation came as Zynga’s first-quarter financial report beat forecasts.
Square hires key Amazon payments executive. Mary Kay Bowman’s switch was first noticed by Re/code through an update to her LinkedIn resume. Her departure calls the future of Amazon Local Register into questions.
Tesla’s losses accelerate. The electric car company’s first-quarter revenue grew by 50% to just shy of $1 billion. However, it lost three times as much money ($154 million) as it did last year.
MY FORTUNE BOOKMARKS
Why GE is sponsoring a 22-year-old British YouTube star by Jaclyn Trop
Asians hit a glass ceiling in Silicon Valley by Erik Sherman
Jennifer Lopez makes a sales pitch to Silicon Valley by Verne Kopytoff
David Rubenstein was right about SunGard by Dan Primack
Apple is suddenly spending way more on R&D by Ben Geier
ONE MORE THING
Google won’t be building that massive headquarters campus, at least not in its hometown of Mountain View, California. Just one building of its proposal was approved. Instead, LinkedIn gets to develop the other 1.5 million square feet that Google was seeking.
MARK YOUR CALENDAR
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)