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| March 4, 2015 | |
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| Good morning, Data Sheet readers. Alibaba is opening its first U.S. cloud computer center. Banks and merchants are scrutinizing early reports of Apple Pay fraud. Plus, Target is spending $1 billion to improve its digital commerce capabilities. Thanks to everyone who sent feedback so far about the organizational structure and timing of this newsletter. Send comments to datasheet@heatherclancy.com. Enjoy your Wednesday. | |
| TOP OF MIND | |
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| Merck experiments with marketing via medical records. Many electronic medical records software applications are equipped with notification features that remind doctors and nurses it's time for certain tests or treatments. Startup Practice Fusion lets pharma companies sponsor those alerts, and Merck is an early customer. It's the trade-off medical professionals make for getting the software for free. The Wall Street Journal published a thoughtful article Tuesday afternoon about the murky ethics of this practice. One doctor told the Journal: "It's a fine line between recommending some kind of guidelines-based care versus recommending something that is marketing or sales-driven. It's dicey." Among the companies that can buy alerts are drug makers, testing laboratories and insurance companies. Although the practice is rare, Practice Fusion isn't the only company that does something likes this. Athenahealth sells sponsorships for its mobile medical reference app. Practice Fusion CEO Ryan Howard said doctors need to get used to it, if they want the benefits of big data: "For every project we do that drives forth public health or gives data away, we need to make sure it's balanced out by a monetizable exercise." | |
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| TRENDING | |
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| Alibaba cloud comes to Silicon Valley. The giant e-commerce company is catering to Chinese companies with U.S. operations with a new data center in California. But the move is seen as an early challenge to the big cloud service providers: Amazon Web Services, Microsoft, and Google. Alibaba Vice President Ethan Yu told Reuters: "Eventually we may expand to other regions, for example the East Coast or middle part of the U.S., if our customers have the demand for that." Speaking of which, Equinix is launching a quintet of new data centers today. The colocation company already claims the world's largest footprint, at 10 million square feet in more than 100 sites on five different continents. Its new facilities in established financial centers—New York, Singapore, Melbourne, London, and Toronto—represent an investment of $227 million and add another 1 million square feet of space. One of Equinix's most vocal pitches is the depth of its global interconnections, which speed up data processing and performance between linked businesses. Approximately two-thirds of Equinix customers use capacity in multiple regions, said Karl Strohmeyer, president of the Americas. Among its 4,800 accounts are Amazon Web Services; GE, which uses the sites to help support its industrial Internet services; e-commerce marketplace Etsy; and cloud software companies such as Box, Marketo, and ServiceNow. "Our biggest competitor is build your own," Strohmeyer said. Equinix recently reported annual revenue of $2.4 billion for 2014. Its guidance for 2015 is approximately $2.6 billion. China: Why are you so worried? A government spokesperson says the plan to collect encryption keys from tech companies—so law enforcement agencies can get at data—is necessary to fight terrorists, reports Reuters. Plus, she points out that the United States does pretty much the same thing to Chinese companies, including telecommunications equipment providers Huawei and ZTE. Expect little sympathy from identity fraud victims. Close to 30% of those surveyed by Javelin Strategy & Research avoided patronizing merchants responsible for high-profile data breaches. Whether or not the incident could be linked back to them. Incidentally, the first reports of fraud linked to Apple's mobile payments platform are surfacing. Gartner research analyst Avivah Litan exposed the trend in a blog this week: "Turns out the bad guys are loading iPhones with stolen card-not-present card information (which is much easier to steal than card present magstripe data) and essentially turning that data into a physical card ala ApplePay." The early response, banks are getting stricter about card verification. Supreme Court itching to reconsider Internet sales tax? A relatively minor ruling involving a Colorado law got Justice Anthony Kennedy expressing regrets about the court's 1992 decision to prevent states from collecting tax on e-commerce sales, unless the business has a local presence. He wrote: "Today, buyers have almost instant access to most retailers via cellphones, tablets and laptops. As a result, a business may be present in a state in a meaningful way without that presence being physical in the traditional sense of the term." Retail makeovers. Price-conscious Target is dedicating $1 billion to digital capabilities. About half its capital budget this year will go to improving e-commerce, especially mobile shoppers. Meanwhile, upmarket Barneys New York hopes to fend off Nordstrom and Neiman March with technology that personalizes online shopping experiences, both by the device used to visit and an individual's taste. How do you write an insurance policy for a driverless car? Several insurers including giant Travelers Cos. now cite autonomous vehicle technologies among potential risk factors. | |
| THE DOWNLOAD | |
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| Cloud security upstart raises profile with CFO hire Seven-year-old Zscaler has accepted only $5 million in outside money, but big companies like Dollar General, Hormel Foods, La-Z-Boy, Nestle and United Airlines use its cloud services to fight cyberthreats. What's more, this week it hired a CFO with public company experience to prepare for an initial public offering. Sydney Carey, who spent nine years with TIBCO, most recently was at open source database startup MongoDB. Last month, it added a global vice president of sales, former Hewlett-Packard and Symantec executive William Welch. "This is a mature startup that is on the path to IPO," Carey said, without being specific about timing. "If we had taken later-stage money, we would be around the billion-dollar mark." Zscaler founder and CEO Jay Chaudhry has already built and sold five companies in the security space, including AirDefense (bought by Motorola) and CipherTrust (Secure Computing). The idea for his latest venture came from this simple thesis: "If applications are moving to the cloud, security should move to the cloud, too." Zscaler's service typically replaces dedicated firewall and gateways that filter corporate Internet traffic for potential threats, often slowing things down in the process. For example, the U.K.'s National Health Service replaced eight racks full of security equipment when it became a Zscaler customer, speeding response time for its 1.6 million employees in the process, Chaudhry said. "Our business helps them deliver clean pipes," he said. During its second quarter ended Jan. 31, Zscaler booked its largest deal yet: a subscription worth almost $10 million sold to a "Global 100 consumer goods" business. At last count, the security startup served approximately 5,000 customers. | |
| ALSO WORTH SHARING | |
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| Meet another stealthy big data startup. Alation was co-founded by Google engineers, an Apple designer, and an Oracle executive. It just disclosed a $9 million Series A financing round led by Costanoa Venture Capital and Data Collective Venture Capital. Its mission: "corralling data for better business decisions," but its exact focus is still pretty nebulous. Two more Salesforce execs join InsideSales.com. The company, which sells software for motivating sales teams, has two new senior vice presidents. David Rudnitsky will spearhead enterprise sales and Lindsey Armstrong will shape international strategy. Their boss, Jim Steele, also came from Salesforce, which is a strategic investor. He joined in December as president and chief customer officer. Change of direction. Ride-sharing company Uber would rather not rely on Apple or Google for mapping software, so it just bought its own. | |
| MY FORTUNE BOOKMARKS | |
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| How Google could make billions from balloons by Ben Geier Why Ellen Pao's case against Kleiner Perkins is no slam dunk by Adam Lashinsky Women-led companies perform three times better than the S&P 500 by Pat Wechsler Netflix's Oscar ambitions show with its latest movie deal by Tom Huddleston, Jr. Hillary Clinton's email arrangement is looking even stranger by Tory Newmyer Jibber-jabber and gibberish at Social Media Week New York by Richard Morgan | |
| ONE MORE THING | |
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| This is not a game. Breakthrough technology from a virtual reality startup in Prague has early evangelists talking applications for real estate or travel companies. Your move, Oculus. | |
| MARK YOUR CALENDAR | |
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| DocuSign Momentum. E-signatures and digital transactions. (March 10 - 12; San Francisco) Microsoft Convergence: Dynamics solutions. (March 16 - 19; Atlanta) IDC Directions 2015: Innovation in the 3rd Platform era. (March 18; Boston) Cisco Leadership Council: CIO-CEO thought leadership. (March 18 - 20; Kiawah Island, South Carolina) Technomy Bio: The big picture on transformation. (March 25; Mountain View, California) Gartner Business Intelligence & Analytics Summit: Crossing the divide. (March 30 - April 1; Las Vegas) AWS Summit. First in a series of cloud strategy briefings. (April 9; San Francisco) Knowledge15: Automate IT services. (April 19 - 24; Las Vegas) RSA Conference: The world talks security. (April 20 - 24; San Francisco) Forrester's Forum for Technology Leaders: Win in the age of the customer. (April 27 - 28; Orlando, Fla.) MicrosoftIgnite: Business tech extravaganza. (May 4 - 8; Chicago) NetSuite SuiteWorld: Cloud ERP strategy. (May 4 - 7; San Jose, California) EMC World: Data strategy. (May 4 - 7; Las Vegas) SAPPHIRE NOW: The SAP universe. (May 5 - 7; Orlando, Florida) Gartner Digital Marketing Conference: Reach your destination faster. (May 5 - 7; San Diego) Annual Global Technology, Media and Telecom Conference: JP Morgan's 43rd invite-only event. (May 18 - 20; Boston) HP Discover: Trends and technologies. (June 2 - 4; Las Vegas) Brainstorm Tech: Fortune's invite-only gathering of thinkers, influencers and entrepreneurs. (July 13 - 15; Aspen, Colorado) VMworld: The virtualization ecosystem. (Aug. 30 - Sept. 3, 2015; San Francisco) Dreamforce: The Salesforce community. (Sept. 15 - 18; San Francisco) Gartner Symposium ITxpo: CIOs and senior IT executives. (Oct. 4 - 8; Orlando, Florida) Oracle OpenWorld: Customer and partner conference. (Oct. 25 - 29; San Francisco) | |
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