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Data Sheet—Monday, June 8, 2015

Good morning, Data Sheet readers. PayPal is downplaying changes to its user agreement, and Walmart is getting far more serious about e-commerce. Plus, it’s darn difficult to escape your past in the Internet age, but Mark Hurd has done a darn good job. Why Oracle’s co-CEO has thrived in the five years since leaving Hewlett-Packard under a cloud. Don’t forget to watch for news from Apple’s annual developers conference this week. Have a great Monday!

 

TOP OF MIND

The redemption of Oracle’s Mark Hurd

Less than five years after his humiliating fall from HP, he’s on top again. Here is Adam Lashinsky’s tale about the comeback of a man … who denies he ever fell in the first place.

Mark Hurd had a problem. It was 2012, some two years after he had executed one of the most dramatic escape acts in corporate history. Just weeks after giving up his powerful perch as CEO of computer maker Hewlett-Packard in the summer of 2010, Hurd landed nearly at the top of software giant Oracle, with a critical assist from its co-founder and chief executive, Larry Ellison. One moment Hurd was fending off mortifying allegations of sexual harassment and expense-account violations; the next he was safely ensconced in a job that would pay some $40 million in his first year alone, working for a man who didn’t give a fig what envelopes Hurd might have pushed—so long as he made his numbers.

Now, though, Hurd faced a very modern conundrum: In the Internet Age, it’s nearly impossible to escape your past. For evidence, he had only to look at the results of a Google search of his name. High on the list was the website fuckyoumarkhurd.com, his reward for having methodically slashed costs at the famously hidebound HP during his five years at its helm. The site contained all manner of negative stories about him. Worse, search results persistently yielded photos of Hurd with Jodie Fisher, the reality-TV actress who’d helped him manage HP customer events around the world. Back in 2010, Fisher had hired the press-release-wielding lawyer Gloria Allred to allege that Hurd had harassed her, which set in motion the events that culminated in his departure from HP.

Anyone would be upset. Hurd, with a finely tuned sense of self-image, was livid. “All he could talk about was how he was seething about what happened at HP,” says an executive who preceded Hurd at Oracle and has since left.

To solve the problem, Hurd turned to a former investigative journalist named Glenn Bunting, who had repositioned his career as a media adviser for businesspeople with problems they wished would disappear. Bunting, who had held senior positions at the Los Angeles Times, had learned the black arts of crisis communications working for one of the field’s top practitioners, Mike Sitrick. It was through Sitrick that Hurd met Bunting, who shepherded the former CEO through the trying circumstances of his fall from grace.

Hurd’s instruction was simple: Fix my Google results. So on Oracle’s dime, Bunting embarked on a campaign to gin up new content about Hurd that would displace the seamy and steamy material that turned up in an Internet search. A combination of Bunting’s efforts and the passage of time did the trick, and chatter about the circumstances of Hurd’s exit from HP finally receded.

Read the rest of Adam’s story about how Hurd has thrived at Oracle.

TRENDING

There’s controversy behind PayPay’s new user agreement, one that relates to how the digital payments service uses information for telemarketing and robocall campaigns. PayPal wants to set the record straight. The soon-to-be independent company says it has no intention of sending “unwanted, excessive or expensive calls and text messages.”

Walmart generates just one-sixth of the online sales of Amazon. Now, the company is committing a “billion-dollar war chest” to improving e-commerce operations. “We can serve you literally in ways no other retailer can,” the company’s e-commerce chief Neil Ashe told The New York Times. Can it catch up quick enough?

This could be an important twist in the mobile payments smackdown. Apparently, Google won’t earn credit-card transaction fees from Android Pay, reports The Wall Street Journal. In the short term, that sounds bad. Then again, it could motivate banks to renegotiate their agreements covering Apple Pay. Plus, is Apple being too optimistic about retailer adoption? Fewer than one-fourth of the top 100 accept its service today, reports Reuters.

 

THE DOWNLOAD

How Red Hat’s CEO traded top-down mandates for ‘open’ decisions

It stands to reason that Red Hat, a company virtually synonymous with the open source approach to software development, would advocate a similarly open approach to kick-starting innovation and making strategic decisions faster.

But former management consultant Jim Whitehurst seriously underestimated exactly what that means to a CEO when he joined the company in January 2008 after six years as chief operating officer at Delta Air Lines.

“We are not ‘leaders,’ because we don’t have fiat power,” he told Fortune. “We catalyze direction. That means you are the agent that makes something happen, but it’s your role to do this in an indirect way. It’s my job to say, ‘This is the hill we want to take, and here’s why,’ and then let the organization take over from there.”

Put another way, it’s like the difference between a thermostat and a thermometer. One changes the temperature, the other simply measures it.

While many traditional managers would shudder at the thought of allowing others to mess with the settings, one could argue that Red Hat—best-known as a distributor of Linux and OpenStack cloud software—has survived if not thrived because of its “open organization” culture.

For FY 2015, the company managed a 17% revenue increase to $1.79 billion. Its GAAP net income for the year was $180 million, up slightly from the previous year. By both measures, Red Hat beat analysts’ expectations.

Whitehurst admits he joined Red Hat with the idea of changing things: by holding teams far more accountable for metrics and putting more finely delineated chains of command in place. But he quickly realized the system of perpetual feedback baked into the company’s culture was far more effective than relying on daily reports overloaded with data or limiting the power to make decisions quickly.

“Sure, I still care about numbers—we are a public company after all—but I have an impact on them indirectly by working through our people and culture,” he recalls.

Now that he’s a convert for the open organization approach, Whitehurst wants other managers and executives to learn from his mistakes. Naturally, he’s decided to share his experience in the form of a new business tome, Open Organization: Igniting Passion and Performance. When I spoke with Whitehurst earlier last week, he was quick to point out that many of his ideas aren’t revolutionary. What’s new are his specific ideas for how to get there.

Read the rest of my story for three quick takeaways.

THE PITCH

The real reason American consumers give up data? They’re ‘resigned’

Historically speaking, European consumers have vocalized their concerns over the data collection practices of companies such as Facebook, Google and Twitter more loudly than their U.S. peers.

Typically, marketers have embraced this standard storyline as the explanation: American consumers are looking for some sort of quid pro quo for sharing information, in the form of discounts or special deals.

A newly published study by the University of Pennsylvania’s Annenberg School for Communication, however, suggests that this long-held perception is a fallacy.

It turns out that more than 90% of the 1,500 U.S. consumers surveyed by the college disagreed with this statement: “If companies give me a discount, it is a fair exchange for them to collect information about me without my knowing.” Furthermore, a majority of the respondents (55%) are even uncomfortable with the idea that data about buying or browsing habits might help in improving a product or service.

“Contrary to the claim that a majority of Americans consent to discounts because the commercial benefits are worth the costs, our study suggests a new explanation for what has thus far been misconstrued as ‘tradeoff’ behavior: a large pool of Americans feel resigned to the inevitability of surveillance and the power of marketers to harvest their data,” the researchers write in their analysis of the data.

That conclusion underscores separate data published in late May by the Pew Research Center suggesting that very few Americans feel they have “a lot of control” over how information about them is collected and used. They were particularly distrustful of search engine providers, social media sites, and online advertisers. The study reflects the views of close to 500 U.S. adults survey in late 2014.

“While some Americans have taken modest steps to stem the tide of data collection, few have adopted advanced privacy-enhancing measures,” the Pew researchers note. “However, majorities of Americans expect that a wide array of organizations should have limits on the length of time that they retain records of their activities and communications.”

In short, companies must to adopt far more sophisticated data management policies if they want to work toward erasing this level of distrust. The message for marketers is pretty clear: not all data is created equal, and most companies need to take far more care with how it’s used.

The University of Pennsylvania researchers conclude:

When three of every five Americans are resigned to lack of control over their data relationships with marketers, when two of every five are both resigned to marketer control over their data and worried that the control can hurt them, and when people with knowledge are actually more likely than less likely to be resigned, we have a problem.

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http://fortune.com/2015/06/05/american-consumers-data-resigned/

ALSO WORTH SHARING

This startup can “contain” malware. Menlo Security, founded by a Check Point Software executive, has so far raised $35.5 million in funding.

Is your company having trouble connecting the dots between all your marketing databases? It’s not alone.

There’s a new point-of-sale malware threat you should know about. It’s called MalumPOS, and it targets systems running Oracle’s MICROS technology—used by approximately 330,000 hotels and retail organizations around the world.

Next up in the Netflix European expansion: Italy, Portugal and Spain.

Another high-level Pinterest executive exits. Joanne Bradford headed the social media company’s partnership strategy, but her role was “diminished” by Tim Kendall’s recent promotion, reports Re/code.

Here’s another useful application for drones. European airline Easyjet thinks the technology could speed up aircraft inspections, especially after foul weather events such as hailstorms.

MY FORTUNE BOOKMARKS

Alibaba’s chief comes to U.S. to drum up business by Barb Darrow

Startups that serve other startups are raising venture capital by Erin Griffith

WWDC: Meet Mark Gurman, Apple PR’s worst nightmare By Philip Elmer De-Witt

Hottest companies on the Fortune 500 list by Daniel Roberts

Ellen Pao’s appeal is now about the money by Dan Primack

Google will now tell everyone when its driverless cars are in a crash by Ben Geier

ONE MORE THING

This Korean robot knows how to kneel, which is one reason it just won $2 million from the Pentagon over the weekend.

MARK YOUR CALENDAR

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)

.conf2015: Splunk’s “get your data on” gathering. (Sept. 21 – 24; Las Vegas)

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)

TBM Conference 2015: Manage IT like a business. (Oct. 26 – 29; Chicago)

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