Dell-EMC: No time to waste

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October 13, 2015

How much time should a toddler spend staring at a tablet computer or smartphone? Many parents within the Data Sheet readership will be relieved to hear that the respected American Academy of Pediatrics is relaxing its stance about the two-year-old age threshold, which has been in place for roughly 15 years—long before the iPad or the iPhone was introduced. While it doesn’t condone the increasingly common practice of using technology as a pacifier, an article published Monday by the Wall Street Journal notes that there’s a good case for allowing interaction earlier than the previously magical cutoff. Examples might include a videochat with grandparents or reading to a child using an e-reader, rather than an actual book. “The more screen media mimics live interactions, the more educationally valuable it may be,” Dr. Ari Brown told the Journal. Habits formed in childhood, of course, inform how adults interact in the workplace. So prepare now for a new generation of workers even more addicted to mobile gadgets and face-to-face conversations made possible through ubiquitous Internet connections. Reactions to the proposed $67 billion deal between Dell and EMC ranged from cynicism to speculation that some pieces of the company may eventually be sold separately. Fortune editor Alan Murray will solicit IBM CEO Ginni Rometty’s opinion at the Most Powerful Women Summit. Meanwhile, I encourage you to read Fortune‘s multifaceted analysis in today’s “Download” section. I’m traveling to Houston this afternoon to attend the Grace Hopper Celebration of Women in Computing conference, so the timing this newsletter may be erratic for the rest of week. Enjoy your Tuesday!

TRENDING

SAP peek suggests strong-than-anticipated Q3 financial results. A preliminary report claims cloud subscription revenue for Europe's largest software company doubled during the quarter. SAP was also helped by stronger sales among existing corporate customers using its legacy, on-premise software applications. (Reuters) Salesforce venture arm dedicates another $100 million to Europe. Forecasts suggest the European appetite for cloud services could generate close to $38 billion in sales by 2019. U.S. software companies need to establish a stronger in-continent presence now that the Safe Harbor data-transfer pact has been nullified. The cloud business software giant's existing portfolio includes mapping company CartoDB, communications platform NewVoiceMedia, and customer experience expert Qubit. (Salesforce Ventures) New Facebook advertising formats turn browsers into buyers. The social network is testing special pages optimized for smartphones that circumvent slow-loading mobile Web sites. Mobile advertising already accounts for 76% of Facebook's total ad revenue, roughly $2.9 billion. (Fortune) Chipotle poaches Starbucks tech exec. Curt Garner, an 18-year veteran of the coffee giant, is the fast-food chain's first chief information officer. The move comes less than a week after Starbucks hired a new chief technology officer to reshape its cloud, analytics and mobile strategies—former Adobe CIO Gerry Martin-Flickinger. (Fortune) PTC thinks augmented reality is serious business. The company will pay $65 million for Qualcomm's AR software platform, Vuforia, which it will combine with its Internet of things technologies. Potential applications include predictive maintenance services that express warnings visually using 3D models of the equipment or product being examined. (Fortune)

THE DOWNLOAD

5 things we know (so far) about the monster $67 billion EMC-Dell deal You've got to give Hewlett-Packard CEO Meg Whitman credit. Mere hours after the Dell-EMC marriage proclamation, she sent an email to her entire company offering advice about how they can "take advantage of this moment." Hat tip to ZDNet, which quickly printed a copy of the entire memo. Many others were equally skeptical of the long-term value. Everyone agrees on this one thing: Michael Dell needs to move quickly to declare a strategy, especially when it comes to cloud computing. Now that the details are settling in, here are other takeaways from Fortune's extensive coverage by Barb Darrow and Dan Primack. It would take a company with huge purse strings to come up with enough money to counter. That's not likely. You can pretty much write off IBM, which has never done a deal bigger than the $7 billion Cognos buyout. The most likely scenario is that another company like GE might try to buy a piece of the business, such as Pivotal. The "Federation" remains intact, at least for now. Michael Dell and his managers admire the model, which aligns EMC's core storage business with virtualization software company VMware, security specialist RSA, cloud software provider Pivotal, cloud service provider Virtustream, and data center equipment company VCE. But it may prove too big to manage, especially with VMware remaining public. It could make EMC's cloud strategy even more confusing. The combined company has plenty of resources in this area, including Virtustream's platform and VMware's vCloud Air (from the EMC side) and the Boomi cloud integration platform (from Dell). Figuring out a cohesive strategy needs to be a top priority. It will make EMC CEO Joe Tucci a lot of money. The 68-year-old CEO has postponed his retirement several times, because of concerns over a successor. It looks like he'll earn $27.2 million for sticking around through the deal's completion. The exposure for Silver Lake Partners appears unprecedented. Many private equity firms limit investments to any single portfolio company to 10% of any given fund. It looks like Silver Lake has committed at least 20% of its fourth fund to Dell.

BITS AND BYTES

Justice Department: Apple no longer needs e-books monitor. The tech giant was notoriously uncooperative with its court-appointed antitrust watchdog. But it managed to put a "meaningful" policy in place anyway. (Reuters) Which leads are worth most to your enterprise sales team? Predictive marketing software startup EverString has raised another $65 million to guide those decisions. (Fortune) SoftBank leads $59 million round for security firm Cybereason. The investment will fund a Japanese market expansion. (Journal) Optimizely raises another $58 million to help make your Web sites better. The software company found by ex-Google execs has become virtually synonymous with A/B testing, which tracks which pages inspire the best response. Walt Disney is one prominent customer. (Reuters) Three things financial-tech companies should borrow from Uber: simplicity, speed, and a disruptive mindset. (Fortune) NetApp wins legal fees from patent troll. A subsidiary of the nation's largest non-practicing patent holder, Acacia Research, is on the hook for $1.4 million after suing the storage tech company without "basis for infringement." (Ars Technica) Google among latest backers for Wall Street messaging upstart. Symphony, which seeks to replace the service offered through Bloomberg terminals, Monday confirmed a $100 million funding round. (Fortune) Sign here, please. Electronic-signature advocates Adobe and DocuSign have lined up more partners for their digital transaction management platforms. (Fortune)

MORE FORTUNE BOOKMARKS

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ONE MORE THING

Celebrity smart tech without the high-end price. Finally, you can buy the same automation software that runs U2 frontman Bono's mansion and the late Steve Jobs' yacht. (Fortune)

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