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Data Sheet—Monday, June 15, 2015

Good morning, Data Sheet readers. IBM’s love affair with open source continues with its official endorsement this morning of Spark, the project for large-scale data processing. Artificial intelligence is often portrayed as evil in movies, but the corporate applications are far friendlier to humans. Plus, NetSuite just closed its biggest acquisition so far. Why did the cloud business software company pay $200 million for an email marketing specialist? One hint: reliable delivery. Wishing you a productive start to the workweek!


IBM gives Spark its blessing. The open source software project centers on technology for large scale data processing. You can think of Hadoop, which prioritizes the organization of information, as a close cousin. “Apache Spark is quickly maturing into a power tool for development of machine-learning analytic applications,” said Darwin Leung, the director of informatics for Independence Blue Cross, in a statement. “It allows our … researchers and academic partners to work together more seamlessly, which means we can get new claims and benefits apps up and out to customers much faster.”

IBM’s commitment includes dedicating 3,500 researchers and developers to the project, spread across 12 labs worldwide. Spark will also become the foundation for its own analytics services, including the IBM Watson Health Cloud.


The trouble with “buy buttons.” Google, Pinterest, Twitter and Facebook all aspire to muscle in on e-commerce with direct links for shoppers. This is proving much harder to pull off than anticipated, largely because of issues with legacy retail technology and inventory management processes, according to this Re/code analysis.

Quirky reinvents itself. The company, originally founded to help inventors bring products to life, is working with some pretty big companies, including General Electric. Now, it’s planning to reduce the number of categories it represents to focus on the connected home.

Alibaba plans to emulate Netflix in China, with a new video streaming service. Plus, YouTube’s streaming network for videogames should be live this summer in the United States and United Kingdom.


5 ways businesses can use AI today

Machine learning doesn’t have to be for the big guys. Even small companies can take advantage of artificial intelligence. Fortune senior editor Stacey Higginbotham reports on resources that can help companies add some AI magic.

Mention artificial intelligence and people immediately think of Hollywood. Movies like Terminator or this year’s Ex Machina have created an association between computer learning and intelligence, and the end of humanity. At a recent event where Google’s Peter Norvig, director of research, spoke he accused the movie industry of typecasting AI as evil.

“I think that’s just typecasting. Look, when you have two actors try out for a role and one’s a human and one’s a robot, the evil one is always the robot,” Norvig said.

Yet, most people are already using AI in everyday situations and will soon be using it more often. Examples include applications such as Crystal, which attempts to teach users how to craft emails specific to the recipient’s likes and dislikes, and Microsoft’s recent How Old Do I Look service that looked at photos of people and extrapolated their age. There are countless more opportunities to use AI and machine learning tools in our lives. And businesses especially should pay attention.

Read Stacey’s list of potential applications and resources.


Email marketing is alive and well, at least for now

It’s the inspiration of new services launched this spring by Square and GoDaddy. The catalyst for NetSuite’s largest acquisition closed last week. The motivation for a monster $250 million round last April for Campaign Monitor. The fuel for HubSpot’s respectable, $125 million initial public offering last October. The list goes on.

Yes folks, social may be sexy, but email delivers—in terms of both customer acquisition and retention. Clearly, that’s not lost on either investors or marketers even though the space doesn’t usually garner as much media coverage as the latest social analytics innovation or this month’s marketing automation breakthrough.

“Email is the thoroughbred in many marketing portfolios. Newsletters are resurging, the death of email has been inaccurately reported,” Campaign Monitor CEO Alex Bard told Fortune in early June. His company counts Coca-Cola, Disney and Fitbit among its roughly 120,000 customers. Campaign Monitor figures spending on email campaigns will grow 20% annually, reaching $6.5 billion by 2018.

Sure, he’s biased, but there are plenty of metrics to back up his argument. The most compelling one is tied to response rates. One of Bard’s favorite stats: for every $1 spent on email marketing, there’s an average return of $44.25. (The source for that revelation is the Direct Marketing Association.)

Historically speaking, that’s especially true for smaller businesses. Hence the new services recently from Square, which sees email as a vehicle for driving foot traffic into stores; and GoDaddy, which now integrates email marketing services with its platform for managing websites.

“Email marketing is a proven tactic for small business and one that continues to be heavily used despite the rise of numerous other channels,” said Greg Sterling, vice president of strategy and insights at Local Search Association, in a statement. “Yet, business owners need to step up the sophistication of their campaigns in the midst of mobile migration, increased complexity, and competitive noise in the broader market.”

Two themes that will dominate developments in email innovation in coming months: how seamlessly a service can be integrated with other campaign touch points, especially mobile initiatives; and how personal any given message can become.

To achieve the latter, Campaign Monitor spent some of its hefty venture capital infusion late last year to buy GetFeedback, which specializes in online surveys completed on mobile devices. “When we talk to our customer audience, they ask for survey integration as the one of the most important integrations we can support,” Bard said. “It’s about sending the right message to the right person, in the right context.”

Meanwhile, integration was a primary motivation for NetSuite’s $200 million for Bronto Software acquisition. “Just as customers demand seamless cross-channel shopping experiences, they increasingly expect companies to communicate consistently through all of their digital experiences—on site, at stores, in email or through social or mobile,” NetSuite CEO Zach Nelson said when the deal was announced in April.

One big wildcard for the next decade, of course, is the fast and furious rise of messaging. It’s by far the dominant electronic communications method among teenagers, used by almost 91% of all teen mobile phone owners. The average volume sent is 30 messages daily. Far fewer use email regularly, at least to communicate with each other.

Then again, when teens do visit their inbox, they’re doing it for far different reasons than their parents. If anything, it might be easier to capture their attention there.

That brings me to one final point: the percentage of marketing emails being opened on mobile devices grew 12% in the first quarter. It now accounts for approximately 45% of all email clicks analyzed by service provider Yesmail. “The smartphone has forever shifted the consumer’s path to purchase and has become the new normal for consumers; it’s not just a seasonal trend anymore,” said Yes Lifecycle President Michael Fisher.


Amazon just released yet another general purpose cloud service option, but is more really more?

Cisco is cutting senior executives in China, reports The Wall Street Journal. Sales are contracting there amid the government’s security crackdown.

BlackBerry really doesn’t have anything to lose by putting Android on its next smartphone. In fact, it could be a really good thing for both sides.

Katie Couric is about to get a big raise. The Internet news anchor’s new contract with Yahoo is worth $10 million, reports Re/code.


Here’s how Mark Zuckerberg explains virtual reality by Dan Kedmey/Time

This tech stock is up 4200% in less than 2 months by Stephen Gandel

In Hogan sex tape fight, Gawker shows a courage rare for digital media by Jeff John Roberts

When do Twitter block lists start infringing on free speech by Mathew Ingram

Why Google would want to back a huge wind farm in Africa by Katie Fehrenbacher

The top technology companies of the Fortune 500 by Erin Griffith

This company wants to be the ESPN of eSports by John Gaudiosi


The secret to becoming a better manager? This neuroscientist thinks you should listen to what you brain waves tell you.


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)