Good morning, Data Sheet readers. It just became politically correct to use the word “patent troll,” thanks to a Supreme Court ruling. Why the mega-merger between cable operators Charter Communications and Time Warner could have a big impact on wireless communications. Plus, EMC will pay $1.2 billion to buy Virtustream. Which cloud company will be bought next?
Tune in Thursday for the debut of Fortune’s new video interview program, The Chat, broadcast from Facebook’s offices in Menlo Park, California. First in the hot seat: General Electric CEO Jeff Immelt. Have a productive Wednesday!
TOP OF MIND
Yes, Snapchat is planning an IPO. But first, it needs to become more than just a mobile messaging service preferred by teens. One big push will involve serving video ads to more than 100 million users. “We are fortunate that we have an audience that is compelling and big enough that people will change their video to make it a better product,” co-founder Evan Spiegel told Bloomberg, in a comprehensive profile.
The massive Charter-Time Warner cable merger could be a big deal for the wireless industry. The company’s CEO, Tom Rutledge, is a huge proponent of Wi-Fi. He was the brains behind rival operator Cablevision’s investment in hot spots.
The Supreme Court doesn’t much like “patent trolls.” Its ruling Tuesday could make it tougher for companies that own lots of intellectual property—but that don’t actually do anything with it—to file frivolous lawsuits.
Plus, the Justice Department just sided with Oracle in another big (pending) intellectual property case against Google. This one involves the right of companies to use application programming interfaces (APIs), the code that helps software systems interact with each other. Google has argued that APIs should be free of copyright restrictions in certain small doses. The Obama administration doesn’t agree.
Drugmaker Novartis writes new prescription for smart drugs. The Swiss company is collaborating with Rani Therapeutics, which makes a “robotic pill” that can deliver certain medications orally that usually must be administered by injection.
Target’s breach settlement falls apart. Banks that would have been paid back under the $19 million proposed agreement with MasterCard argued that the amount fell short of actual losses. By the way, the cost of an “average” corporate data breach now stands at around $3.8 million. Plus, why U.S. veterans could be America’s secret weapon against cybercriminals.
It isn’t just Twitter that’s interested in buying Flipboard. Apparently, Google and Yahoo have approached the newsreader and media aggregation service, too, reports The Wall Street Journal. Flipboard counts about 65 million active users. Why it’s so interesting: all of these companies are exploring a credible alternative to Facebook’s Instant Articles service.
Much ado about software-defined networking. The CEO of rising player Cumulus Networks explains why legacy networking equipment makers are scrambling to invest in this emerging technology. Plus, Hewlett-Packard just acquired another startup, ConteXtream, to beef up its value proposition for carriers.
Alcatel-Lucent shareholders aren’t very happy about management’s plan to sell to Nokia, a move that could set up the combined company as a more credible competitor to the likes of Ericsson or Huawei Technologies. The WSJ reports on the rather raucous Paris shareholder meeting during which the proposal was discussed. By the way, Nokia just announced its planned buyout of Eden Rock Communications.
News about the tech news business. Three months ago, well-respected technology news service Gigaom shut down rather suddenly—six of its journalists later joined the Fortune team. Now, the editorial assets have been purchased by Knowingly and a relaunch is planned by August. Another twist: Re/code, the organization founded by former Wall Street Journal tech reporters Walt Mossberg and Kara Swisher, has been bought by Vox Media.
Which cloud company is next on the auction block?
With Tuesday's news that EMC is buying Virtustream for $1.2 billion, there is one less independent cloud infrastructure provider out there. And those numbers are dwindling by the month. Barb Darrow reports on why the consolidation reshaping cloud services is far from over.
In the past two years, legacy technology giants IBM, Cisco, Hewlett-Packard, EMC and Datapipe gobbled up SoftLayer, Metacloud, Eucalyptus, Cloudscaling, and GoGrid, respectively, to build their cloud stature. Now, you have to wonder what company will be next to go.
Gartner Distinguished Analyst Lydia Leong said Virtustream has had several suitors. "The indicators seemed to have been that they were waiting for the right time and the right valuation," she noted via email.
One thing is clear, the stakes are sky-high for the legacy IT providers, aka the would-be buyers. They are watching more of their current customers put jobs and data in the cloud so they need to be competitive there. At the same time, new born-to-the-web startups are deploying on Amazon or Microsoft or Google public clouds from the get-go. All three of those public cloud providers field massive and affordable cloud infrastructure that will be hard to compete with going forward.
But the stakes are also very high for the handful of remaining smaller independent cloud players. All of the would-be purchasers have already made one or more cloud acquisitions and are working to integrate them into their core. It's unclear how long their appetite for new companies—at least at a fair price—will continue.
The risk for the independents is if they play hard to get for too long they'll end up standing out in the cold when this high-stakes game of musical chairs ends.
No executive is going to admit to a reporter that his company is on the auction block. The truth of these matters is every startup is headed for an IPO until some acquirer makes the right offer. Virtustream for example, was IPO bound, and boom, the next thing you know it's part of the EMC Federation.
Read Barb’s completely unscientific and speculative take on likely acquisition targets going forward including Joyent, ProfitBricks, Rackspace, DigitalOcean, and CloudSigma. Fortune reached out to the companies mentioned and will update this story as needed.
DocuSign wasn’t quite done raising money. Dell and Intel Capital are adding $45 million in backing to the software company, which specializes in digital signature and electronic workflow applications. That’s on top of the $233 million round it disclosed last week and brings total backing to more than $500 million.
It’s got your back. Rubrik, which sells data archiving equipment and disaster recovery services, raised $41 million led by Greylock Partners. The startup’s founding team comes from Google, Facebook and Oracle. Its competition includes Symantec, Asigra and Actifio.
Ex-Facebook exec sells storage startup to Sony. Optical Archive, founded by former Open Compute manager Frank Frankovsky, uses Blu-ray disks to give businesses a cost-effective data archiving option. This ensures documents and information are still easily accessible, but it doesn’t cost as much as some solid-state drive options. Terms of the deal weren’t disclosed.
ALSO WORTH SHARING
Your favorite Office app could be coming to an Android tablet near you. Microsoft has signed bundling relationships with more than 20 companies, including Sony, LG and Haier.
Plus, it’s official: the software giant is prepping its Cortana personal assistant app—its answer to Apple’s Siri—for both Apple iOS and Android.
These maps are unreal. Facebook’s Oculus division is buying Surreal Vision, which sells 3-D mapping software. The technology could be used to help make virtual locations seem more “real.” So far, Facebook hasn’t said much about potential applications, but here’s a hint of what might be coming.
Here we go again. The IRS figures that the personal information for approximately 100,000 U.S. taxpayers was compromised through its website.
Despite its accounting troubles, Toshiba may hand out a dividend anyway, according to sources cited by Reuters.
MY FORTUNE BOOKMARKS
Stratasys CEO David Reis: ‘The future of desktop printing is great’ by Andrew Zaleski
Why General Motors is scrambling to find tech workers by Anne Fisher
5,000 reasons Apple need Jonathan Ive by Jacob Davidson
How Google is helping amputees get 3D-printed prosthetics by Kia Kokalitcheva
This grid battery startup is raising funds to ramp up in a competitive market by Katie Fehrenbacher
No, new tech will not lower your company’s costs by Kentaro Toyama
Here’s how many Internet users there are by Jacob Davidson
Carly Fiorina says the Chinese ‘don’t innovate’ by Tom Huddleston, Jr.
ONE MORE THING
Show some respect. Microsoft’s Satya Nadella is a better tech leader than Tesla’s Elon Musk, according to a new research ranking.
MARK YOUR CALENDAR
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)