Remember that adage about the shoemaker’s children going barefoot? It’s an apt description of how many organizations manage their IT budgets—outfitting sales and operations leaders with increasingly sophisticated applications and data analysis software while leaving CIOs to track their own decisions with spreadsheets. Apparently, I’m not the only one who finds that a bit ironic, based on the market’s positive response last Friday to the public trading debut of a not-quite-unicorn company dedicated to breaking that cycle.
Apptio, which surged 40% after its initial public offering at $16 per share, sells software that help companies centralize information about what they spend on their other infrastructure—everything from their own data center equipment to cloud software application—and assess the impact of that spending alongside other business metrics. One of Apptio’s initial investors, Matt McIlwain, managing director of Madrona Venture Group, said these systems drive “fact-based dialogue with business and function unit leaders—marketing, sales, product, etc.—within their company about how to improve agility and manage costs as the enterprise transitions to software-as-a-service and cloud-based services.”
Today, Apptio has more than 325 customers, including cable company Cox, digital media giant AOL, managed care provider Molina Healthcare, and software giant Microsoft. Its business proposition is straightforward: Find places where companies can cut costs so they can divert more of their technology investment to places where it will influence new revenue streams, such as new customer service systems.
“Whether you are managing existing investments or creating new digital investments to increase shareholder value, you need to do that differently,” Apptio co-founder and CEO Sunny Gupta said after his company’s Nasdaq debut. Gupta cut his teeth in engineering roles at Mercury, Opsware, Rational Software, and IBM. He started two other companies before the idea for Apptio was born in August 2007.
Like many other companies born of the cloud software era, the newly public Apptio runs at a loss. As of the quarter ended June 30, it had an “accumulated deficit” of $183.7 million. Its IPO prospectus makes it clear that won’t change soon as the company builds visibility for its central mission.
But the management challenge it addresses is sizable and not exactly shrinking: Market research firm Gartner projects global IT spending will reach $2.7 trillion this year. In other words, there’s plenty of room for companies to trip up if they don’t tread carefully.
NOTE: We’re switching to a new email provider. To ensure delivery of Data Sheet, please whitelist or add firstname.lastname@example.org to your address book.
BITS AND BYTES
Why Microsoft is investing heavily in programmable chips. The software giant spends at least $5 billion to $6 billion on the servers and computing hardware to run its fast-growing cloud services. That includes a massive bet on programmable microprocessors that can run machine learning applications and other artificial intelligence software far more quickly than is otherwise possible. It’s not alone: Amazon, Google, and Facebook also support massive research and development initiatives meant to improve data center servers. (Wired)
Facebook isn’t the only one having trouble tracking digital ads. Japanese advertising company Dentsu has acknowledged overcharging at least 111 companies for the impact of their digital “impressions.” The revelation came as Facebook apologized for way overestimating how long the social network’s visitors watch videos. It turns out that digital advertising is much tougher to track accurately than promised. (Wall Street Journal)
What, no lobbying army? Last year, Apple spent around $1 million on lobbyists who could represent its causes within the European Union—and it hasn’t really increased that investment, despite facing a massive $14.5 billion EU tax fine. That’s in contrast to other tech companies, especially Google, which spent close to $4.8 million last year. (Wall Street Journal)
Samsung hunts for startup investments in Israel. The South Korean tech giant is hunting for innovation in artificial intelligence, cybersecurity, and augmented reality. (Bloomberg)
Twitter’s independent future in question. Both Salesforce and Google are reported to be considering takeover offers for the social media company, as it struggles to regain its footing. But those reports also suggest that founder and CEO Jack Dorsey isn’t ready to throw in the towel. (Fortune, New York Times)
PEOPLE AND CULTURE
Meet Google’s kinder, gentler growth guy. Philipp Schindler became chief business officer in July 2015, and since then, colleagues and business partners have been describing him as “goofy,” “optimistic” and filled with “boyish wonder.” And he may soon be the (smiling) public face of some significant changes in Google’s advertising technology. (Fortune)
A unicorn founder’s big life hack. Qualtrics CEO Ryan Smith eats dinner at home almost every night he’s in town. It’s all part of the faith in constant analysis and self-improvement that shapes Smith’s fast-growing company. (Fortune)
Target’s chief digital officer exits. Jason Goldberger, who led the retailer’s online strategy for the past four years, is leaving amid a restructuring. His responsibilities will be split between CIO Mike McNamara and chief merchandising officer Mark Tritton. (Bloomberg)
Boatload of tech CEOs endorse Hillary Clinton. Among them are YouTube’s Susan Wojcicki, PayPal’s John Donahoe, and Sprint’s Marcelo Claure. (Fortune)
Larry Ellison takes a pay cut. He racked in $41.5 million in compensation during the company’s 2016 fiscal year, about 35% less than the previous year. But he and Oracle’s co-CEOs Safra Catz and Mark Hurd were still among the 20 highest-paid executives in the U.S. last year. (Bloomberg)
IN CASE YOU MISSED IT
Snapchat Unveils Video-Recording Sunglasses, by Kia Kokalitcheva
Someone Is Testing Methods for Taking Down the Entire Internet, by David Z. Morris
How to Compare Google Allo vs. Apple iMessage vs. Facebook Messenger, by Lisa Eadicocco/TIME
Lenovo, PayPal, and Intel Team on Fingerprinting Tech for Online Payments, by Jonathan Vanian
An Apple a Day: A New Apple Comes Into Focus, by Don Reisinger
ONE MORE THING
Marc Andreessen quits Twitter, at least temporarily. The venture capitalist and “Father of the Tweetstorm” declared his intention to take a break from the social network over the weekend. Then, he deleted all of his tweets. (Fortune)
This edition of Data Sheet was curated by Heather Clancy.