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Data Sheet—Wednesday, July 1, 2015

Good morning, Data Sheet readers. The Apple Music go-live date was overshadowed by an appeals ruling in the e-book antitrust case that will cost it $450 million. One of the Hewlett-Packard executives responsible for guiding its breakup is leaving by the end of the summer. Plus, Facebook is changing how it charges for video ads. A midweek plug: if you find this newsletter useful, encourage someone to sign up at this link: Enjoy your Wednesday. The long weekend is almost here!


Here’s where Apple ran into trouble. How’s this for bad timing? On the same day as the much-trumpeted Apple Music launch, the company lost its appeal of a ruling that found it guilty of artificially inflating the price of e-books. According to the judge, Apple went wrong by cutting a collective deal with a “cartel” of book publishers: Harper Collins, Penguin, Simon & Schuster, Hachette and Macmillan. That action amounted to collusion in the judge’s opinion. And now, Apple owes $450 million to consumers.


Say goodbye to non-compete agreements? California is notable for being one of three U.S. states that actively prohibit contracts preventing employees from working for competitors in their next job. Traditionally, companies use them to protect trade secrets. The counter argument is that non-competes stifle innovation. That’s the sentiment that Massachusetts, Rhode Island, and Washington state are embracing: they’re looking emulate California.

HP’s top enterprise exec defects. Bill Veghte, who was instrumental in guiding Hewlett-Packard’s breakup (up until now at least), isn’t sticking around to see it through. Apparently, neither is Art Gilliland, who was running the company’s security strategy. No details were shared about Veghte’s motivation, except to suggest its for a “new opportunity.”

More Microsoft job cuts highly probable. The software giant’s new fiscal year starts today, and many watchers are expecting additional downsizing, especially in the mobile phone division. The company is already divesting its advertising group and part of its mapping team. Plus, here’s one business unit that Microsoft isn’t likely to sell: the Bing search engine operation.

Feds to VMware: Pay us back. The virtualization software company and one of its contractors, Carahsoft, have been fined $75.5 million for overcharging government accounts. The Justice Department claims they gave inaccurate pricing information to the General Services Administration and offered discounts on deals to other agencies and businesses, but not the U.S. government.

New payment model for Facebook video ads. Advertisers will only pay if visitors watch them for at least 10 seconds, reports The New York Times.

Nordstrom’s, Macy’s and Neiman Marcus will be among the first retailers to test Pinterest’s new “Buy it” pins.

Cisco is paying $635 million to boost security for connected devices. Its acquisition of OpenDNS was inspired by the company’s Internet of things strategy.

Speaking of which, there is no “standard” for the Internet of things, but Microsoft wants to change that. The problem: Its approach is different from the ones advocated by Apple, Google and Intel. So, yes, we’re talking at least four options.

France prosecutes two Uber execs. The official charge: “misleading commercial practices.” The trial is scheduled for Sept. 30.


Sears’ big-data strategy? Just a service call away

Thanks to a new technology center in Seattle, the retailer is testing predictive maintenance services—much like Caterpillar and GE. Fortune’s Phil Wahba reports.

If you’d like to see less of your Sears repairman, rest assured, the feeling is mutual.

The venerable (but unprofitable) department store, which is the single largest seller of home appliances in the U.S. and installed 4.5 million of them last year, recently opened a new technology center in Seattle. One of its mandates? Mine data gleaned from the tens of millions of visits that Sears technicians have made to American homes over decades to more effectively diagnose a problem that an air-conditioning unit or dishwasher is having—well before a service call is made.

That’s right: The Sears repairman, clad in his royal-blue shirt, is as valuable a data vehicle as a cookie stored in your web browser. With 7,000 technicians, Sears is the biggest repair service in the country, visiting 8 million homes a year. Its technicians have catalogued hundreds of millions of records, taking note of the location, model, and make—Sears services a wide array of brands, not just its own 102-year-old Kenmore line—on each visit, so its diagnostic technology can calculate the complexity of a repair as well as a cost and time estimate.

The upside of that data crunching? A reduction in the number of times Sears must dispatch technicians, saving the retailer a nice chunk of change at a time when its sales are flagging, sparing customers a lot of aggravation, and helping it snatch away business from competing repair services. Industrywide, service calls fix the problem on the first visit 75% of the time; Sears’ lofty goal is to get that to a 95% resolution rate. (The company won’t disclose its current rate, saying only that it is above average.)

“How do we leverage the data we have and our digital experience to disrupt a pretty sleepy industry?” asks Arun Arora, a former Staples and Groupon executive who now oversees home appliances and services for Sears. “We’re going to use the digital backbone and data we have that we have not uniquely taken advantage of.”


Its new facility also gives Sears a plum spot in the emerging market for smart home tech and services, something that fits well into CEO Eddie Lampert’s strategy to revive the retailer and reinvent it by turning it into—what else?—more of a technology company.

Share this story, which appears in the July 1 issue of Fortune magazine.


After a two-year vacancy, Chinese smartphone maker Xiaomi has named a new chief financial officer. Shou Zi Chew most recently was an investor with Russian firm DST Global, one of Xiaomi’s investors.

What constitutes a “manager”? How the Obama administration’s proposed new rules on overtime could salaried workers who earn less than $50,440 per year.

Taking on an industry giant. First Zenefits, now Square. The mobile payments company is adding payroll processing to its menu of services for small and midsize merchants. The former’s tactics in trying gain marketshare have inspired the ire of ADP, which has sued it for “malicious and manipulative” public relations.

Like Uber, but for fleet vehicles. Trucker Path, a shipping marketplace for freight brokers and logistics companies, raised $20 million in a Series A round led by Chicago-based Wicklow Capital.

Sony will embrace crowdfunding to encourage more employee innovation, reports the Wall Street Journal.

There are still a lot of fake accounts on Instagram, an issue as the social network builds out its advertising model.


Look out, Gweneth: Ellen DeGeneres launches a lifestyle brand by Molly Petrilla

Here’s what bitcoin companies are doing to woo Greeks by Daniel Roberts

Marc Andreessen donates $250,000 to LGBTQ organizations by Kia Kokalitcheva

Crowdfund site to save Greece collapses under wave of donations by Jeff John Roberts

The lonely energy projects left behind by the clean tech revolution by Katie Fehrenbacher

And the first major news outfit to roll out default encryption is … by Robert Hackett

Researchers create “skin grafts” for buggy software by Jonathan Vanian


Cure for tech spins? If you’re prone to motion sickness, this approach could help you cope with nausea caused by virtual reality applications.


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)