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Data Sheet—Wednesday, May 20, 2015

May 20, 2015, 12:15 PM UTC
Fortune

Good morning, Data Sheet readers. First, a public service announcement. Thanks to everyone who completed our first-ever feedback survey earlier this week. We’re looking for more responses, which will guide topics and delivery times. Thanks for taking a few minutes to improve this week-daily newsletter!

What’s up today? After four years of estrangement, Google and Twitter are taking steps to strengthen their relationship. PayPal faces a $25 million bill related to its consumer credit services, and Yahoo’s spinout of Alibaba just got more complicated.

By the way, Salesforce reports its first fiscal quarter this afternoon. Let’s see how management addresses ongoing takeover speculation. Enjoy your Wednesday!

TOP OF MIND

Google and Twitter make up. The social network’s entire “firehose” of a half-billion daily tweets is about to start showing up in the search giant’s results again. The first place people will see them is on mobile devices. The two haven’t had an official deal for four years. But now that Google is downplaying its own social network, Google+, a closer relationship makes sense.

TRENDING

Proposed U.S. tax changes may complicate Yahoo’s Alibaba spinout, and investors are none too happy.

Feds: PayPal should pay up. The digital payments company signed up “tens of thousands” of consumers for its credit services without their knowledge, according to the U.S. consumer financial protection bureau. The feds want PayPal to pay them back, to the tune of $15 million. The company could also be fined $10 million.

Amazon’s leadership confirmed. It’s still head and shoulders above fast-growing rivals Google and Microsoft in Gartner’s latest cloud services market snapshot. Just as intriguing: Hewlett-Packard fell off the list.

Pinterest is expanding its options for advertisers. The additions include new mobile formats and more services for targeting specific “pinners.”

Philips moves R&D from New York state to MIT. The Dutch company signed a $25 million research alliance with the storied university. The big focus: connected lighting, sensors and healthcare systems.

Home Depot’s online blueprint becomes more concrete. Its e-commerce sales grew 30% during the first quarter, compared with 12 months ago. A big portion of those orders are actually picked up by people in stores, where they often inspire more sales.

Debit-card data in danger? Banks are reporting a spike in ATM fraud. Attacks recently reached the highest level in two decades, reports The Wall Street Journal.

The fastest growing segment within the Internet of things? Digital signage. A new IDC forecast suggests sales of connected gadgets, cars, lights, appliances and other devices will expand 19% this year. The biggest piece of this market over the next three years will be industrial Internet software and hardware for improving manufacturing. That segment could reach almost $100 billion by 2018. Smart displays deployed by retailers are also growing fast.

THE DOWNLOAD

Why CFOs should play a bigger role in digital strategy

Most big companies have the will to invest in digital innovation, but C-level leadership hasn’t yet found the way to manage it effectively.

Two separate surveys, undertaken by management consulting firms KPMG and EY, underscore a disconnect between the priority information technology executives place on investments in business intelligence, analytics and the Internet of things—and the urgency with which their companies are moving.

For example, just 17% of almost 3,700 large-company CIOs surveyed by KPMG in collaboration with recruitment firm Harvey Nash thought they would do “much better” than their competitors in “managing digital disruption.” Two-thirds of the respondents, however, believed that this phenomenon will require a significant leadership change for their company over the next several years.

“Pressure to produce at an accelerated pace is felt across all vertical markets, and has direct ties to the talent war,” said Bob Miano, president and CEO of Harvey Nash USAPAC, commenting on the data. “The industry can’t produce talent fast enough. The pace will only continue to quicken, and the companies on track to win will secure and hold on to talent, be nimble enough to shift quickly, and will reign in digital to manage it in smart way.”

Three quick survey stats to illustrate:

  1. The number of marketing teams that have exclusive control of digital strategies is shrinking; more are collaborating with IT teams.
  2. 17% of the surveyed CIOs are now working with a chief digital officer (CDO), compared with just 7% one year ago; another 5% plan a CDO hire within “several months.”
  3. More CIOs (50%) are seeking outside talent to supplement skills rather than simply to save money; the top priority centered on business intelligence and analytics.

That last point dovetails with the key finding of the much smaller EY study: many CFOs still tend to view information technology as a cost center.

Slightly more than one-third of the 650-plus CFOs surveyed pointed to managing technology costs as the top concern of their relationship with their CIO. Building the business case for new initiatives ranked third, although it wasn’t all that far behind, relatively speaking.

“What most firms are still lacking is a good digital strategy,” noted David Ryerkerk, EY’s global IT advisory leader, commenting on the data. “The firms that are struggling with this most are those who see it as predominantly an IT issue, as opposed to a larger, business one.”

One thing winning over CFOs: they realize that improved analytics and data management practices are vitally important for future decision-making. At least half of those surveyed are being consulted on corporate strategy.

“There’s a huge opportunity for CFOs to be a champion for advancing the analytics agenda—not only within finance but also, given how CFOs are involve in other parts of the organization, for embedding it across the firm,” said Chris Mazzei, EY’s global chief analytics officer.

STARTUP SCENE

Payments processor WePay snags $40 million. The startup, which competes with Stripe, handles processing for sites such as GoFundMe and Care.com. The new round, led by FTV Capital, will be focused on global expansion.

Flash forward. Enterprise storage company Coho Data has closed $30 million in Series C funding, which brings its total backing to $67 million. The lead investor was March Capital Partners, but the venture arms of Hewlett-Packard and Intel also participated.

Reach out any way you want. Switch Communications sells a cloud-based service that enables cross-device voice communications and messaging. It just raised another $35 million, led by Amasia Associates. The round also includes SoftBank, Andreessen Horowitz, and Google Ventures.

Cloud collaboration company Fuze gets infusion, makes acquisition. The startup, which counts Macys, Starbucks and Groupon among the 100,000 customers for its conferencing services, has received $20 million more in funding from Hermes Growth Partners. (It previously raised $68.5 million, according to CrunchBase.) Fuze is also buying LiveMinutes to expand its online collaboration offerings.

French-born search technology company Algolia picks up $18.3 million. The lead backer is Accel Partners. Algolia currently has about 600 customers, including Vevo and Medium.

ALSO WORTH SHARING

For the first time, Jeff Bezos has picked a woman as “technical adviser.” Maria Renz is a 15-year Amazon veteran. Other former Bezos “shadows” now hold some pretty high-profile executive roles, including Amazon cloud chief Andy Jassy.

Yes, it’s true. Tech services giant Computer Sciences Corp. is officially splitting its government and commercial businesses.

Newly public Etsy blew its quarter. The online marketplace’s stock took a big hit.

It’s a date! Oculus VR, the virtual reality headgear company bought by Facebook for $2 billion, is assembling the guest list for a San Francisco event on June 11. By the way, your “avatar” in virtual worlds may soon be able to mirror your expressions.

Federal reserve bank in St. Louis confirms hack. Cyber-thieves redirected web traffic to a fake site, used to collect email addresses and passwords of bankers and currency traders.

Cable consolidation. French telecommunications company Altice is buying a controlling stake in Suddenlink, ranked as the 7th biggest U.S. cable operator. The WSJ has also linked it to a possible deal for Time Warner.

Chinese smartphone giant Xiaomi’s online store is officially open for business, in the United States. So far, though, the product selection is minimal.

U.S. Navy reconsiders its server supplier. It used to buy them from IBM before that division was sold to Lenovo last year.

MY FORTUNE BOOKMARKS

MasterCard now allows any business to enable P2P payments by Leena Rao

One big reason Jawbone took debt by Dan Primack

Farming data continues to be hot in Silicon Valley by Katie Fehrenbacher

Sergey Brin’s best advice to Marissa Mayer by Patricia Sellers

This crazy new phone isn’t like anything you’ve ever seen by Ben Geier

10 best U.S. cities for your company’s finance and IT operations by Anne Fisher

ONE MORE THING

If you need a good book for the summer, Microsoft cofounder Bill Gates has published his annual reading list. Most of these tomes, however, are pretty intellectual for the beach.

MARK YOUR CALENDAR

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)

Cassandra Summit: Largest gathering of Cassandra database developers. (Sept. 22 - 24; 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)

QuickBooks Connect: SMBs, entrepreneurs, accountants and developers. (Nov. 2 - 4; San Jose, California)