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Data Sheet—Friday, June 26, 2015

Happy Friday, Data Sheet readers. Satya Nadella has given Microsoft’s employees their marching orders for the new fiscal year. Amazon is putting $100 million behind its Echo home-automation device, and sales of machine-vision technologies are growing at record levels.

For a mid-afternoon break, watch Fortune Live at 3 pm Eastern. Among today’s featured segments: how millennials are changing the face of retail.

Also be sure to read part two of Fortune’s exclusive investigation into the root causes of the Sony Pictures Entertainment hack last November—an object lesson for every corporate board. The third installment will publish online Saturday or you can read it all in the print edition on newsstands next week. Enjoy the weekend!

 

TOP OF MIND

Microsoft’s three-pronged mission. CEO Satya Nadella’s latest motivational email details a trio of “interconnected and bold ambitions” that basically echo what he’s been prioritizing for the past 16 months. Only more specifically. The official new mission statement: “to empower every person and every organization on the planet to achieve more.” The complete memo was first published by Geekwire.

TRENDING

Amazon puts $100 million toward ecosystem for smart home. The
e-commerce and cloud services giant wants more people to buy Echo, its voice-controlled personal assistant for home automation. So, it’s backing software developers writing applications for the device.

So far, Facebook’s progress on diversity has been “modest.” Its metrics have barely budged since last June.

Talent shopping. Why Macy’s, Walmart and other big retailers nurture their
e-commerce divisions
near Silicon Valley.

More noise over upcoming airwave auction. T-Mobile wants more spectrum allocated to smaller wireless carriers, because it believes this will improve competition and concentrate less power with AT&T and Verizon. FCC Chairman Tom Wheeler isn’t buying that argument. The Justice Department begs to differ.

THE DOWNLOAD

Why computers that ‘see’ are a hot technology

Sales of gear that help computers understand their surrounding and identify images is growing quickly. Fortune’s Jonathan Vanian peeks into the trend.

What’s a beer company to do if it wants to ensure that the thousands of bottles of booze it produces daily are filled with just the right amount of liquid, contain no unwanted residue, and aren’t broken?

It uses computers to keep an eye open for problems.

Machine vision technology, which lets computers see and understand their surroundings, is undergoing a dramatic boom, according to a report Wednesday by the Association of Advanced Automation (AIA), an industry trade group. Companies are spending an increasing amount of money on the sci-fi technology that helps electronic devices recognize images, much like humans can.

In the first quarter, AIA found that North American sales of machine vision gear like cameras and vision sensors grew to $520 million, up 22% from $426 million during the same period last year. Sales of the components that make up machine vision technology, like lasers and LED lights, reached $84 million for the first quarter this year, up 11% from the $77 million in sales for the same time period in 2014.

The AIA says that first quarter machine vision sales were a record high for the first quarter, explained Alex Shikany, AIA’s director of market analysis. For the full year, Shikany said he expects sales to reach $2.5 billion compared to the $2.28 billion of sales for 2014.

Shikany cited the rapid advancement of machine vision technology as the main reason companies seem to be buying more equipment. Companies can now buy cameras the size of quarters that can capture and process high-quality footage that just three years ago wouldn’t have been possible, he explained.

AIA based its finding on a survey of nearly 80 member companies that range from camera manufactures to software companies working to improve the ability for devices to recognize images.

More companies are interested in embedding the technology into other equipment. Car manufacturers, for example, buy sensors and camera gear to add to their vehicles to help alert drivers to blind spots, Shikany said.

The growth of robotics in factories is also helping to drive adoption. Vision technology has evolved to the point where robots can interpret their surroundings and move freely in a facility. It used to be that coders would have to program a robot to move from one location to another.

At the same time as machine vision has witnessed growth, the field of computer vision—a closely related and overlapping technology—has also been booming. Computer vision basically refers to non-industrial uses of the similar vision technology, such as improving the results of Internet search engines, like Google, to recognize and contextualize images in searches.

“It is all on a continuum,” Shikany said.

Read more about which tech giants are likely to lead the machine vision revolution.

THE PITCH

This marketing startup converts e-commerce browsers into buyers

Abandoned shopping carts are a particularly toxic problem for e-commerce retailers. On average, 70% of items selected by would-be buyers are left behind when shoppers abort a transaction.

Plenty of companies offer retargeting software as the antidote, basically triggering some sort of standard outreach when someone doesn’t push the buy button. London-based startup Yieldify, which Thursday disclosed an $11.5 million round led by Google Ventures and SoftBank Capital, has come up with a more personal approach to improve conversions.

The company, founded by brothers Jay and Meelan Radia, uses predictive analytics to respond to each visitor uniquely. It uses a person’s multichannel browsing history to generate individual outreach, even for first-time site visitors. In less than two years, Yieldify has scored deals with more than 1,000 global brands including Marks and Spencer, and French Connection. Last year, revenue grew by 480%, although the company doesn’t disclose annual sales so it’s tough to gauge how meaningful that number is.

“It’s quite a unique technology that reacts to a customer’s onsite behavior,” said Google Ventures general partner Avid Larizadeh Duggan, one of the venture capitalists behind the company’s $125 million fund dedicated to European startups that could have a global impact.

Duggan was herself an e-commerce entrepreneur, as founder of fashion marketplace Boticca. “One of the other differences is that it is very focused on lower funnel optimization,” she said.

Another notable distinction: under Yieldify’s business model, e-tailers only pay when there’s an actual conversion.

“We only get paid if the client makes money,” said Jay Radia, the former investment banker who acts as the 120-person company’s CEO. His brother, Meelan, is chief technology officer.

The financing will fund market expansions in London, New York, Berlin, and Sydney. “Most of it will be going into engineers and data scientists,” Jay Radia said.

Yieldify previously raised a $1.2 million seed round.

The Google Ventures European fund has disclosed three other investments. The group was involved in a $9 million round this week for Lost My Name, a “personalized” publisher of books and other content for children; and it was part of a $140 million raise last June for rights and royalties management platform Kobalt Music Group. Its portfolio is also tied to Oxford Sciences Innovation, affiliated with the University of Oxford science and technology departments.

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ALSO WORTH SHARING

British security unicorn Sophos, which counts Ford, Pixar and Under Armour as customers, went public Friday in London.

From e-commerce to natural resource exploration. The founder of a high-profile British online grocery company, Ocado, just became the chairman of NEOS, which specializes in geospatial data. The startup offers data visualization services for steering oil and natural resource exploration.

Sprint lost its case against patent troll Prism Technologies. It owes $30 million. This doesn’t bode well for Verizon, T-Mobile and US Cellular, which still face litigation. AT&T has already settled.

It’s a date. Barry Diller’s media conglomerate IAC/Interactive plans to spin out the division controlling its online data businesses: Match.com, Tinder, and OkCupid.

From toys to smart wallet prototypes. Rapid prototyping toolkits from littleBits, once focused mainly on education, are now used by the likes of SAP and Twilio. The company closed $44.2 million in new funding to build out more offerings for the corporate world.

Check it out. Israeli company Checkmarx, which secures applications for the likes of Coca-Cola and Salesforce, has raised $84 million from Insight Venture Partners.

MY FORTUNE BOOKMARKS

Why Apple, Snapchat and Twitter are betting on human editors, but Facebook and Google aren’t by Mathew Ingram

Why on-demand delivery startup Postmates really raised $80 million by Kia Kokalitcheva

This company will let you look for a new home using virtual reality by Chris Morris

Here’s the big advantage Sony Morpheus has over the competition by John Gaudiosi

Looking for a woman-friendly tech job? These sites want to help. by Susan Price

What Sunrun’s IPO says about the solar industry and Silicon Valley by Katie Fehrenbacher

ONE MORE THING

No pedals, just lots of sensors and software. The latest on Google’s self-driving car.

MARK YOUR CALENDAR

Brainstorm Tech: Fortune’s invite-only gathering of thinkers, influencers and entrepreneurs. (July 13 – 15; Aspen, Colorado)

Esri Business Summit: Mapping the value of data. (July 18 – 21; San Diego)

LinuxCon North America: All about open source. (Aug. 17 – 19; Seattle)

SuccessConnect: Simplify the way the world works. (Aug. 10 – 12; Las Vegas)

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)

I Love APIs 2015: Apigee’s annual conference. (Oct. 12 – 14; San Jose, California)

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)