CEO Daily: Wednesday, September 30
I’ve got an early flight home from our Brainstorm E conference in Austin, Texas, this morning, so need to keep this note short. But I’d call your attention to the fireside chat that Apple’s Tim Cook did yesterday with Box CEO Aaron Levie in San Francisco, where he said Apple’s enterprise technology sales reached $25 billion for the twelve months ended in June. That’s not bad, even for a company that racks up $200 billion a year in sales. The enterprise business “is not a hobby,” Cook said. “This is a real business.”
Cook’s predecessor, Steve Jobs, was openly disdainful of the enterprise business and the companies that served it. But Cook recognizes that a lot of the most interesting and exciting technology applications over the next decade are likely to happen inside companies that are scrambling to reinvent themselves. That’s why he has forged partnerships with old-line enterprise companies like IBM, Cisco, and Microsoft, as well as newcomers like Box and DocuSign. Apple needs help because “we don’t have deep knowledge of all the verticals that enterprise is in,” he said.
My conversation Monday with Whole Foods CEO Walter Robb in Austin underscored the opportunity. Robb brought his “superstar” CIO Jason Buechel – one of Fortune’s 40-under-40 – with him to Brainstorm E, and said smart integration of new technology will be critical to getting the company back on track. (Whole Foods had announced its first-ever layoffs that morning.) Technology, Buechel said, will transform the company’s relations with its employees, its customers and its supply chain.
Off to the airport. More news below.
• Tesla unveils Model X SUV
Tesla publicly introduced the carmaker's highly anticipated Model X SUV, with CEO Elon Musk admitting the company may have gotten a bit excessive with splashy features. "I think we got more carried away with the X," Musk said. The company only handed keys to six customers at Tuesday's event – and Musk was one of them. The Model X has a range of 250 miles and can reach a top speed of 155 miles per hour. One of the more interesting physical features is the large windshield, which presented some engineering and manufacturing challenges. Fortune
• Ralph Lauren steps down as CEO
Ralph Lauren is planning to step down as CEO of Ralph Lauren but stay on as executive chairman and chief creative officer, a personnel move that lifted the luxury brand's shares in after-hours trading. He is being succeeded by Stefan Larsson, who most recently transformed Gap's Old Navy brand into a star performer, outperforming the sister namesake and Banana Republic brands. There have been several major changes among Ralph Lauren's executive ranks as growth has cooled. Fortune
• Glencore shares rebound
Glencore, run by billionaire Ivan Glasenberg, recouped most of the losses from Monday's 29% selloff as shares rebounded for a second day. The stock has been on a roller coaster this week amid concerns Glencore is overloaded with debt, though shares snapped back after the company released a statement saying it was financially robust and had no solvency issues. Some analysts say that the recent slump was excessive and estimate Glencore is undervalued considering current commodity prices. Bloomberg
• AB InBev lines up $70B for deal
Anheuser-Busch InBev has been asking banks to underwrite up to $70 billion in debt financing to back its potential takeover of SABMiller, several media outlets have reported, citing banking sources. The takeover of SABMiller, the world's second largest brewer, is likely to cost at least $103 billion, analysts have estimated, and under UK takeover rules, AB InBev has until Oct. 14 to make a firm offer. If a deal were to go through, the beer merger would result in almost certain divestitures in several key markets, including the U.S., where regulators would deem a combined AB InBev-SABMiller too big. Reuters
• Online lender Avant joins unicorn club
Avant has agreed to raise $325 million in new equity funding at a valuation well in excess of $1 billion, more cash that should let the online marketplace for consumer loans expand its product offerings and push off an initial public offering. Avant, as well as peers like LendingClub, have caught the attention of the Treasury Department – which over the summer asked for public comment about how the companies work and how the financial regulatory framework should evolve. Fortune
Around the Water Cooler
• Fortune's 100 best workplaces for women
Fortune has launched an inaugural list of the 100 Best Workplaces for Women, a list that is led by wealth management firm TrueWealth, followed by travel insurance comparison site Squaremouth (No. 2) and hospital system Texas Health Resources (No. 3). Interestingly, only one publicly traded company made the top ten – Build-A-Bear Workshop. The rest are either private companies, nonprofits, or a partnership. The Container Store and Ultimate Software are among the other public companies features on the list. Fortune
• Elon Musk needs a vacation
Tesla and SpaceX founder Elon Musk has admitted that he has only attempted to take time off twice in the last 12 years, while also conceding it is important for him to make a vacation a priority down the road. In fact, Musk told the Danish Broadcasting Corporation that his priority is to add more strength to Tesla's management bench "so that I can take a vacation." Entrepreneur
• Mexico's oil auction woes
Low oil prices are thwarting Mexico's attempts to auction off the nation's oil fields to private and foreign companies, which have been kept out of the market for almost eight years. The planned auction of nine fields in the shallow Gulf of Mexico on Wednesday is considered by some to be the best chance this year to attract buyers, as the fields have proven and probable reserves. The boost in production is needed as Mexico's oil production has declined. The nation's oil monopoly has started to see some easier oil fields run dry, while it doesn't have the expertise to develop more complex projects. WSJ (subscription required)