Data Sheet—Wednesday, November 11, 2015

November 11, 2015, 1:59 PM UTC

The story about the demise of the Sony Betamax caught my eye Tuesday afternoon. I’m old enough to remember the VCR format wars of the 1980s, and I thought Betamax video was long gone. Not so, reports Fortune’s Robert Hackett.

Although Betamax production peaked in 1984, amazingly Sony kept making the player/recorders until 2002. Apparently someone kept using them, because Sony has announced it will stop shipping the cassettes next year. They lasted 40 years, which isn’t bad for a failed product, especially one whose popularity peaked in the middle of the Reagan Administration.

That got me thinking about how hard it is to kill old technologies. I know almost no one who isn’t an investment banker that uses a BlackBerry. Yet that beleaguered company has a market capitalization of $4 billion. The heyday of the mainframe computer was the 1960s. Still, IBM not only continues to sell them, but it introduced a brand-new line earlier this year, the z13. “Built for the mobile era,” IBM brags about the system in its 2014 annual report, while also asserting that its mainframes “process 75% of the world’s business data.” The mainframe is part of a rapidly declining business at IBM, yet the company continues to invest heavily to reverse that trend.

Examples of graying technology that persevere abound. While reporting an upcoming feature in Fortune magazine about athletic footwear king Nike, I spoke to apparel analysts who praised Nike’s masterful use of SAP software to manage its global inventory and distribution system. SAP? Isn’t that the German company mocked in Silicon Valley for being hopelessly behind on the cloud, which is the hipper and more virtual way to deliver software services? I asked around and found out that yes, SAP is behind but no newfangled offering can hold a candle to SAP’s industrial-strength handling of physical-goods for companies like Nike.

The bright shiny objects of technology are exciting, new, and absolutely the future. But don’t count out the rusty old tech war horses just yet. They’re extremely difficult to kill.


An update: A day after Ericsson and Cisco announced the tie-up I wrote about Tuesday, Ericsson held an investor day during which it lowered its financial guidance through 2018. Its shares fell more than 6%. The alliance announced Monday was notable for not being a merger. Perhaps the Swedish company would have been better off selling itself to its Silicon Valley partner after all.

Adam Lashinsky


Tax worries cloud EMC-Dell deal. Sources tell Re/code that the tax bill for the transaction could be $9 billion, far larger than anticipated. The sticking point is the plan to offer EMC shareholders special tracking stock linked to VMware shares, which (in theory) reduces the potential corporate tax liability and shifts the burden to shareholders. If the IRS doesn't go along with that scheme, it could require Dell to borrow more money. (Re/code)

U.S. can't block digital "imports." A federal appeals court in Washington ruled Tuesday that the International Trade Commission has no authority over incoming digital transmissions. The agency is concerned about foreign businesses selling goods that infringe on U.S. intellectual property, especially music, movies, software, and other copyrighted materials. (Wall Street Journal)

Verizon CFO denies plan to sell off cloud computing business. During an investor presentation Tuesday, Fran Shammo said rumors the telco plans to sell data center assets associated with its MCI and Terremark acquisitions are "factless conjecture with no foundation." He blamed jealous competitors for starting the talk. (Fortune)

Marc Andreessen sells even more Facebook stock. The venture capitalist, one of the social network's directors, has unloaded almost half of his personal stake since Oct. 30. The prearranged transactions are unusually large, considering his past trading histories. (Wall Street Journal)

T-Mobile caters to binge-watchers with free video. The upstart wireless carrier won't count data consumed watching subscription services such as Netflix, Hulu, or ESPN toward monthly limits (but don't expect to watch YouTube). Another catch: the plan won't support very high download speeds. (Fortune)

Microsoft embraces blockchain, a technology crucial for digital business transactions. Blockchain is the secret sauce used to verify, manage, and secure transactions using the digital currency bitcoin. It could also have broader uses for validating contracts executed digitally. The software giant is collaborating with New York startup ConsenSys on a service that lets banks and insurance companies experiment with potential applications more cost-effectively. (Reuters)

Google may build its own smartphone. Right now, the company uses consumer hardware specialists (right now LG and Huawei) to build its Nexus handsets. Such a move would give it far more control over design, just like its biggest mobile rival, Apple. (The Information, Fortune)


AT&T Mobility's CEO talks about the sci-fi future of wearables

While consumers are still trying to figure out where wearables fit into their lives—if at all—AT&T Mobility is hard at work improving them. The goal: wearable fitness trackers and smartwatches that have cellular connectivity built in so you don’t have to worry about always having your phone nearby to receive calls or text messages.

Fortune recently spoke with AT&T Mobility CEO Glenn Lurie about wearables today, connected wearables of tomorrow, and the impact they will have on our lives. Here is that conversation, edited and condensed for clarity.


This investor is making a last-ditch attempt to start a 5th U.S. carrier
by Kif Lessig
Who's liable when an an Airbnb stay or an Uber ride ends badly?
by Kia Kokalitcheva
Why the Lyft-Justin Bieber deal is not just another gimmick
by Kirsten Korosec
Ellen Pao's advice for women in tech: Toughen up and speak out
by Kristen Bellstrom
Is iPad Pro the secret to a tablet turnaround?
by Don Reisinger
Micron creates new memory technology for big data era
by Stacey Higginbotham


New York bans fantasy sports sites. After a month-long investigation, the state's attorney general says he considers the activity to be illegal gambling. He ordered the two biggest players, Fan Duel and DraftKings, to shut down and gave them just five days to respond. (Wall Street Journal)

This edition of Data Sheet was curated by Heather Clancy:

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