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  • Target CEO Says Digital Performance Up 50%

    Target CEO Says Digital Performance Up 50%

    “Our digital performance was up 50 percent,” says Target CEO Brian Cornell. “As we gain greater clarity around the consumer, the economy, the state of the vaccine, we feel that the consumer continues to respond to our in-store experience and the ease and convenience of shopping with some of our same-day services like pickup, drive-up, and ship. Same-day fulfillment services now represent over half of our digital channel.”

    Brian Cornell, CEO of Target, discusses their massive Q1 results in an interview on CNBC:

    Digital Performance Up 50 Percent

    We’ve had a string of really solid results going back to 2017 but this quarter may be one of the highlights. Our team executed throughout the quarter. We had a great performance from our store teams with a store comp of 18%. Our digital performance was up 50%. It was really a team effort. We had great supply chain support with our merchants and marketers all coming together to support the results which speak for themselves.

    We are benefitting from investments we’ve been making for years now. Our investment in our store experience, our curated Home Brand and national brand mix, and then the fulfillment services that we offer. That combined with the investment in our team, I think we are seeing continued strength. We feel really good sitting here right now about our outlook, not just for the second quarter but for the full year.

    We’ve Connected With The Consumer

    As we gain greater clarity around the consumer, the economy, the state of the vaccine, we feel that the consumer continues to respond to our in-store experience and the ease and convenience of shopping with some of our same-day services like pickup, drive-up, and ship. They really connect with our curation of Great Home Brand, national brands, and the service our team provides each and every day.

    We are feeling very confident about our position today. I look at the proof point from Q1, we picked up another billion dollars in market share on top of the $9 billion of share last year. That’s just a sign that we’ve connected with the consumer, we’re building relevance, and we’re providing what they need and what they want throughout the year.

    Newness Is A Huge Trend In Our Business

    When you see the combination of stores comping up at 18%, which to me is just a highlight number, and categories like apparel growing again by over 60%, that combination of store traffic and category mix really benefited us throughout the quarter. We are seeing a resilient consumer. They’re clearly shopping our stores and when they’re there they are attracted to anything that’s new.

    Newness has certainly been a trend throughout our business in the first quarter and I think that’s going to continue. That great combination of store traffic and store comps and the continued movement of same-day fulfillment services which now represent over half of our digital channel. We really like that transaction. It looks and feels more like a store transaction which from a profitability standpoint certainly is beneficial for us.

    Target CEO Brian Cornell Says Digital Performance Up 50%
  • Cisco CEO: Customers Preparing For Hybrid Work Model

    Cisco CEO: Customers Preparing For Hybrid Work Model

    “We are really seeing the impact of this hybrid work model,” says Cisco CEO Chuck Robbins. “We are seeing the preparation for hybrid work and the return to the office. Customers are absolutely believing this is going to occur and they’re investing in it. Customers are turning to us to help them create the trusted workplace of the future.”

    Chuck Robbins, CEO of Cisco, discusses on CNBC and in their quarterly earnings call how customers absolutely believe that the hybrid work model is in their future:

    Customers Are Preparing For Hybrid Work Environment

    Over the last couple of quarters, we’ve seen significant investment in next-generation wireless infrastructure to be ready for their employees to come to the office. As you load these wireless networks they are going to need campus refresh underneath them, and we’ve seen exactly that. The Catalyst 9000 platform has had four consecutive quarters of increasing growth sequentially.

    We are really seeing the impact of this hybrid work model. We are seeing the preparation for hybrid work and the return to the office. Customers are absolutely believing this is going to occur and they’re investing in it.

    Trusted Workplace of the Future

    Let me now touch on Infrastructure Platforms. We saw strong demand across a majority of our portfolio, led by our next-generation Enterprise Networking and Service Provider solutions, as companies accelerate the modernization of their infrastructure. This modern infrastructure delivers higher performance and faster access to data while offering the best user experience in an increasingly distributed environment.

    Customers are turning to us to help them create the trusted workplace of the future, with Wi-Fi access points, video endpoints, cameras and IoT sensors feeding data into DNA Center and DNA spaces. We’re enabling operations teams to remotely monitor workplace conditions for a safe return to office.

    We’re also working to provide visibility beyond corporate networks, which is increasingly critical as our customers accelerate their adoption of SaaS and cloud solutions for hybrid work. At Cisco Live, we launched the industry’s first enterprise-wide full stack observability offering by integrating ThousandEyes cloud intelligence with our Catalyst switching portfolio and AppDynamics. This provides IT with visibility and actionable insights across both external and internal networks to provide a seamless digital experience for users. And with users more distributed than ever, it is vital that they have the most efficient and secure connection to the cloud.

    Building the Internet of the Future

    Our deep partnerships with Google, Amazon, and Microsoft allow native connectivity from our SD-WAN fabric to each of these cloud offerings. With our technology, customers can reduce deployment times and connect branch offices to cloud workloads in minutes. In our Webscale business, we delivered our sixth consecutive quarter of strong order growth, which increased over 25% in the quarter, and over 50% on a trailing 12-month basis.

    Our Webscale customers are starting their 400 gig upgrade cycles and aggressively pursuing long-haul build-outs while our Carrier customers are exploring new architectures to realize the full potential of 5G. We are building the internet for the future by creating breakthrough innovation with our routing, optical and automation technologies to deliver significant economic benefits.

    Customers Consuming Cisco Technology In New Ways

    Recently, we launched a new routed optical networking solution, integrating our scalable, high-performance routers and Acacia’s pluggable optics, which offers significant cost savings. Last week, we announced our intent to acquire Sedona Systems to extend our cross-work automation platform to build on these capabilities. We also expanded our Silicon One platform, from a routing-focused solution to one which addresses the Webscale switching market, offering 10 networking chips ranging from 3.2 terabits to 25.6 terabits per second, making it the highest performance programmable routing and switching silicon on the market. We know our customers increasingly want to consume Cisco’s technology in new and more flexible ways.

    At Cisco Live, we launched our new As a Service portfolio, Cisco Plus, and our first offer, Cisco Plus Hybrid Cloud, combining our data center compute, networking and storage portfolio. Cisco Plus includes our plans to deliver networking as a service, which will unify networking, Security, and observability across Access, WAN and Cloud domains to deliver an unparalleled experience for our customers.

    Turning to Security, we had a record quarter, surpassing $875 million in revenue, up 13% as we expanded our reach with customers around the world. Our Security strategy is focused on delivering a simple and secure experience. We have an unrivaled ability to provide end-to-end Security capabilities across users, devices, applications and data, on any network or any cloud.

    Powering Business Transformation

    Wellbeing is top of mind for so many right now as we face a new way of working. This is why we launched People Insights to help people monitor and manage their wellbeing. These new features, devices and capabilities combined with Cloud Calling and Cloud Contact Center provide our customers with the most comprehensive and inclusive hybrid work platform.

    Last week, we announced our intent to acquire Socio Labs. By integrating Slido and Socio Labs into our WebEx platform, we will also be able to provide the most comprehensive internal and external event management solution on the market. In summary, we had a very good quarter. I’m so proud of the continued success of the business transformation our teams are driving.

    Cisco CEO Chuck Robbins: Customers Preparing For Hybrid Work Model
  • SAP Admits to Illegal Software Exports to Iran

    SAP Admits to Illegal Software Exports to Iran

    SAP entered into an agreement with the Department of Justice (DOJ), admitting it illegally exported thousands of copies of its software to Iran.

    SAP is the one of the leading enterprise software companies in the world, with a focus on ERP, cloud and IoT solutions. The company does business all over the world, requiring it to adhere to the laws and regulations of the many countries it operates within.

    Unfortunately, the company has run afoul of the US, ignoring sanctions and export restrictions against Iran. As a result, SAP has entered a non-prosecution agreement with the DOJ, admitting it sold thousands of copies of its software to Iran, and agreeing to penalties and restitution.

    Under the terms of the agreement, SAP will pay combined penalties of more than $8 million. SAP will disgorge $5.14 million of the money it received through the illegal sales.

    “Today’s first-ever resolution pursuant to the Department’s Export Control and Sanctions Enforcement Policy for Business Organizations sends a strong message that businesses must abide by export control and sanctions laws, but that when they violate those laws, there is a clear benefit to coming to the Department before they get caught,” said Assistant Attorney General John C. Demers for the Justice Department’s National Security Division. “SAP will suffer the penalties for its violations of the Iran sanctions, but these would have been far worse had they not disclosed, cooperated, and remediated. We hope that other businesses, software or otherwise, we heed this lesson.”

    “By supplying Iran with millions of dollars’ worth of illegally exported software and services, SAP circumvented U.S. economic sanctions against Iran—pressure that is intended to end Iran’s malign behavior. However, it was SAP that first uncovered and reported this sanctions violation, and we would like to thank them for working hard to enhance their compliance program to prevent future violations,” said Special Agent in Charge Joseph R. Bonavolonta for the FBI’s Boston Division. “Let this case be a lesson to others that it’s better to self-report and own up to one’s mistakes than undermine U.S. foreign policy and adversely affect our national security.”

  • Workday CEO: Digital Transformation To Be Faster Trend Out Of Pandemic

    Workday CEO: Digital Transformation To Be Faster Trend Out Of Pandemic

    “Digital transformation will come out as a faster trend out of the pandemic,” says Workday co-CEO Aneel Bhusri. “What’s been interesting about the pandemic is that for companies that were in the cloud they figured out how to how to thrive and adjust to the new world. Companies that weren’t in the cloud realized that they needed the flexibility, agility, and ability to plan instantaneously. They needed those capabilities.”

    Aneel Bhusri, co-CEO of Workday, discusses how the pandemic will drive digital transformation forward at an even faster pace:

    Digital Transformation To Be Faster Trend Out Of Pandemic

    The first three quarters during the pandemic were challenging. The vagaries of subscription accounting models are such that it is a lag indicator. We expect new bookings growth to accelerate this year and that is our primary indicator and the way we run the business. We’re very excited about where we’re headed. That acceleration will probably take at least a year to show up in subscription accounting numbers just because of the way the model works. 

    What’s been interesting about the pandemic is that for companies that were in the cloud they figured out how to how to thrive and adjust to the new world. Companies that weren’t in the cloud realized that they needed the flexibility, agility, and ability to plan instantaneously. They needed those capabilities. In many ways, companies like Nike that are just such great market-leading companies, recognize that they needed to move this capability to the cloud. So I think actually digital transformation will come out as a faster trend out of the pandemic. 

    Employee Engagement Rose To The Top Of The List

    It comes back to the flexibility and agility that that cloud solutions like Workday provide. We’ve been very fortunate. We’re so happy to have Laboratory Corporation of America become a customer. J&J is a customer. Visor’s a customer. AstraZeneca is a customer. I just feel honored to be able to support these companies who are doing the best they can to save our lives and are just doing amazing work with the vaccines and testing. We’ve always had a strength in the pharmaceuticals and diagnostics role. We’re going to do everything we can to make sure that they’re successful because they’re taking care of all of us.

    Coming back to what we learned during the pandemic, employee engagement just rose to the top of every CEO’s list and every head of HR’s list. In a remote work orientation, it was harder to really understand how do employees think about the company they work at, their engagement level, their comfort with their manager, and if they are feeling fulfilled at work. We were already down the path at Workday with something called Pulse Surveys. We recognized that this emerging trend was going to be critical going forward. 

    We Fell In Love With Peakon So We Acquired Them

    We concluded that we had to get in this market now, the market’s happening now, and Peakon is the well-known leader in this category. Peakon is a UK-based company with an amazing management team. We fell in love with the product and the management team so we made them part of Workday. They’re one of the new generations of companies that’s machine learning first.

    They really use machine learning in the right way to guide decisions and really give you insight into how employees are thinking about the company that they’re working for and how engaged are they. That is a supercritical set of information that’s going to drive companies going forward.

    Digital Transformation To Be Faster Trend Out Of Pandemic, Says Worday co-CEO Aneel Bhusri
  • Disney Accelerating Pivot To DTC-First Business Model

    Disney Accelerating Pivot To DTC-First Business Model

    During yesterday’s earnings call Disney CEO Bob Chapek said it has accelerated the company’s pivot towards a DTC-first business model. “Our recent strategic reorganization has enabled us to accelerate the company’s pivot, towards a DTC-first business model and further grow our streaming services,” says Chapek. “Disney+ has exceeded even our highest expectations, in just over a year since its launch with 94.9 million subscribers. ESPN+ and Hulu have also performed well, with 12.1 million and 39.4 million subscriptions, respectively.”

    Chapek attributes the company’s massive streaming growth to its huge collection of brands. “The wealth of IP from our unrivaled collection of brands and franchises provides us with an incredible breadth and depth of storylines and characters to mine for Disney+ and our other streaming services,” says Chapek. “We have the ability to interconnect these storylines and characters in unprecedented ways as we saw with The Mandalorian and WandaVision tying into the broader Star Wars and Marvel franchises. We’re excited to continue exploring the endless possibilities that this unique ecosystem provides.”

    DTC Results Improved By $650 Million

    “We believe that we’ve got a great price-value relationship,” says Chapek. “I think the best insulation we’ve got (to lower churn) is to keep the price-value relationship very high and there’s no better way to do it than powerhouse franchises cranking out regular new releases on a monthly basis.”

    Disney’s direct-to-consumer results have improved by nearly $650 million versus the prior year. “Last quarter, we guided to direct-to-consumer operating income declining by $100 million versus the prior year under our former segment structure,” says Disney CFO Christine McCarthy. “Our reported results are $750 million higher than that guidance.”

    Lower Disney Losses Attributed To Disney+

    Disney attributes their lower losses to the growth of the Disney+ streaming service. “A lower loss in the first quarter compared to the prior year was driven by subscriber growth partially offset by higher costs due to the launch and expansion of Disney+. With 94.9 million paid subscribers at the end of Q1, Disney+’s global net additions were 21.2 million versus Q4.”

    “Disney+ Hotstar subscriber additions continued their strong growth trend with Disney+ Hotstar subscribers making up approximately 30% of our global subscriber base,” said McCarthy. “We also saw strong additions to our subscriber base from our November launch in Latin America.”

    Disney Happy With Level Of Churn

    Disney is also very happy with its level of churn especially as it relates to subscribers who came into the Disney+ service via their Verizon partnership which helped power its launch last year. “We are very pleased with what we’ve seen so far on the level of churn,” said McCarthy. “And as our product offering matures and we put more content into the service and our subscriber base becomes more tenured, we expect to see our churn rates continue to decline.

    So in regard to the specific churn related to the anniversary of the Verizon launch promotion from last November 2020, we’re really happy with the conversion numbers that we have seen there going from the promotion to become paid subscribers.”

    100 New Titles a Year

    “With Disney+ originals along with the theatrical releases and the library titles, we’ll be adding something new to the service every week,” noted McCarthy. “We are very pleased with the engagement overall. We believe we’re going to reach that cadence of getting content on the service every week within the next few years. We’ve also set that target for 100-plus new titles per year. And that’s across Disney Animation, Disney Live Action, Pixar, Marvel, Star Wars, Nat Geo. And of course, we’ll continue to add more to our library as we go through time as well.”

    “Given the value of growing our sub base, we are continuing to invest in high-quality content,” says McCarthy. “We believe that content is the single biggest driver to not only acquiring subs, but retaining them.”

  • Warren Buffett Admits $11 Billion Mistake

    Warren Buffett Admits $11 Billion Mistake

    In his annual letter to Berkshire Hathaway shareholders, Warren Buffet admitted that he personally made a mistake that cost the company $11 billion. He said that the $11 billion loss resulted from a write-down in the value of a few subsidiary and affiliate businesses that Berkshire Hathaway owns.

    The final component in our GAAP figure – that ugly $11 billion write-down – is almost entirely the quantification of a mistake I made in 2016. That year, Berkshire purchased Precision Castparts (“PCC”), and I paid too much for the company.

    No one misled me in any way – I was simply too optimistic about PCC’s normalized profit potential. Last year, my miscalculation was laid bare by adverse developments throughout the aerospace industry, PCC’s most important source of customers.

    In purchasing PCC, Berkshire bought a fine company – the best in its business. Mark Donegan, PCC’s CEO, is a passionate manager who consistently pours the same energy into the business that he did before we purchased it. We are lucky to have him running things.

    I believe I was right in concluding that PCC would, over time, earn good returns on the net tangible assets deployed in its operations. I was wrong, however, in judging the average amount of future earnings and, consequently, wrong in my calculation of the proper price to pay for the business.

    PCC is far from my first error of that sort. But it’s a big one.

    BERKSHIRE HATHAWAY INC. 2020 Annual Report
  • T-Mobile CEO: Our Competitors Spent $80 Billion To Catch Up and They Fell Short

    T-Mobile CEO: Our Competitors Spent $80 Billion To Catch Up and They Fell Short

    “Our competitors just spent a combined $80 billion trying to catch up and match us and they fell short,” says T-Mobile CEO Mike Sievert. “We didn’t just leave this auction with the most mid-band spectrum, we left the auction with the best mid-band spectrum. Our two and a half gigahertz spectrum is more than 50 percent better in most use cases and we have more of it than anybody else. It’s going to make us famous for network in the 5G era.”

    Mike Sievert, CEO of T-Mobile, says that despite AT&T and Verizon spending $80 billion in the c-band auction trying to catch up and match them, they fell short:

    Our Competitors Spent $80 Billion To Catch Up and They Fell Short

    What the c-band auction shows is the extraordinary value of what T-Mobile has. Our competitors just spent a combined $80 billion trying to catch up and match us and they fell short. They spent $80 billion dollars and are still falling short. We didn’t just leave this auction with the most mid-band spectrum, we left the auction with the best mid-band spectrum. Our two and a half gigahertz spectrum is more than 50 percent better in most use cases. Yet we have more of it than anybody else. It’s really terrific because we’ve taken it and run ahead by about two years with the best asset base in the industry. It’s going to make us famous for network in the 5G era.

    As we sit here today we’re more than a million square miles ahead of AT&T and Verizon on deployment. We have more 5G geographic coverage out there than AT&T and Verizon combined. We’re also adding coverage at a record pace, at a pace no one company in this industry has ever done. We started ramping up this engine two years ago and now it’s running at pace. While our competitors just seized some assets, they didn’t catch up, but they just seized some assets that they’re going to get after, but they’re way behind.

    We Will Unlock Massive Cashflow From This Business

    Yesterday we announced a business plan where we demonstrated massive cash flow potential from this business with very reasonable assumptions. These are assumptions that don’t require us to catch any unicorns. We just have to go do what we’ve already demonstrated we know how to do and we’ll unlock massive cash flow potential in this business. We have everything we need to deliver that business plan right now.

    Last week we announced our Work From Home solution. We just started our rollout of home broadband for business home office workers. That’s across more than 50 million of the US population and it will rapidly expand to nationwide. It’s such an exciting thing. Now, work from home workers no longer have to share the WiFiwith their kids. That’s so important.

    They also don’t have to worry about security if they are enterprises, they can get their home office workers a secure connection. Later this month, as we unveiled yesterday, we’ll be announcing our consumer launch plans across a wide swath of this country with rate plans, go to market plans. etc. We’re really excited about what’s ahead in home broadband. From a timing standpoint, we’re way ahead of the other new entrants.

    Starlink Is Not A Broadband Competitor

    SpaceX Starlink Constellation (and other satellite broadband provider) could be a compliment or a future collaborator. Ultimately, for the core mainstream broadband connection, it’s going to come down to capacity. Those emerging technologies won’t be able to match on capacity but they’ll be really great augments for places that macro networks don’t reach. Capacity will be the game. Nobody has the ability to deliver more capacity to more places than T-Mobile.

    That’s just so great. This is a company that used to be a scrappy upstart and now we’re the number two provider but with demonstrably the best asset base in this industry.

    T-Mobile CEO: Our Competitors Spent $80 Billion To Catch Up and They Fell Short
  • WSJ: Tripadvisor Adopting Hybrid Work Model

    WSJ: Tripadvisor Adopting Hybrid Work Model

    The pandemic and its accompanying restrictions on travel, business, and work, has caused company’s to rethink business models going forward. In other words, businesses like their new focus on being lean and mean, even while they get back to normal sales levels. In a Wall Street Journal article, Tripadvisor CFO, Ernst Teunissen says that the company is going to hold the line on adding back costs. Trip Advisor reduced expenditures by a staggering 32 percent in 2020 as governments worldwide banned and restricted travel.

    “We’re going to very much resist just adding back what we had before just because we can,” Mr. Teunissen said. “You could argue that a company should have the discipline to always do that, but a pandemic really sharpens your focus.”

    Tripadvisor has reduced the company headcount by nearly 62 percent, from 4,194 pre-pandemic to 2.596 currently. Simultaneously, like most other companies, Tripadvisor employees have been predominantly working remotely and for the most part, they plan to continue with that strategy.

    Mr. Teunissen said he is looking closely at Tripadvisor’s real estate footprint to determine how much office space the company will need after the pandemic, as it expects to adopt a hybrid model of remote and office work.

    Tripadvisor has roughly 30 offices spanning about 600,000 square feet and its lease obligations totaled $168 million as of Dec. 31. The company is considering subletting more of its space and, in some cases, moving to smaller locations, Mr. Teunissen said.

  • WSJ: Zoom Is Harder On Extroverts

    WSJ: Zoom Is Harder On Extroverts

    With the massive change toward remote working that has taken place over the last year, different personality types have had to adjust to Zoom. The Wall Street Journal has an interesting article today that concluded that Zoom video conferencing is surprisingly harder on extroverts than introverts. Experts interviewed said that Zoom is “less satisfying” for extroverts who thrive when talking in-person.

    “One area where extroverts excel is the in-the-moment processing of bodily cues,” says William Lamson, an assistant professor of psychology in clinical psychiatry at Weill Cornell Medicine. But because video calls are more about talking heads, extroverts end up “using more focus and not likely getting the same reward as a live interaction,” Dr. Lamson says.

    Extroverts don’t do well with the structure of Zoom calls also:

    Extroverts can also chafe at some of the structure and controls that videoconferencing platforms impose on conversations, says Elias Aboujaoude, a clinical professor of psychiatry at Stanford University. Functions such as muting, for example, control the conversation in a way that does not happen with in-person conversations, says Dr. Aboujaoude.

    Introverts, on the other hand, do much better with more structure in conversation with workmates:

    “There is less spontaneous water-cooler chitchat, which isn’t necessarily their forte and can sometimes provoke anxiety,” says Dr. Aboujaoude.

    Video meetings feature frequent glitches that can offer some cover to introverts who often worry about how they look to others. “Introverts can be harsh critics of their social performance and second-guess what they have said in social settings,” says Dr. Aboujaoude. 

  • Tim Wu, the Man Who Coined ‘Net Neutrality,’ Joins Biden Administration

    Tim Wu, the Man Who Coined ‘Net Neutrality,’ Joins Biden Administration

    Tim Wu is joining the Biden administration, likely signaling increased scrutiny for Big Tech.

    Tim Wu, a Columbia law professor, famously coined the phrase “net neutrality” and has been a vocal critic of the tech industry. Wu has also been a proponent of more aggressive antitrust action against Amazon, Facebook and Google.

    He has been hired by the Biden administration specifically to work on Technology and Competition Policy.

    https://twitter.com/superwuster/status/1367814526159253506?s=20

    Big Tech has been in the spotlight more and more over antitrust concerns. While ominous, Wu’s appointment isn’t necessarily a bad thing for tech companies. Steve Ballmer, former Microsoft CEO, said Big Tech should take a more proactive approach, embrace additional regulation and move forward with clear guidelines it can operate within.

    “If I’m in these guys’ shoes, I say, come on, let’s get down there and let’s regulate me and let’s get it over with so I know what I can do,” Ballmer said in a “Squawk Box” interview.

    “I’ll bet money that they will not be broken up,” Ballmer continued in his comments to CNBC.

    “I also don’t think the case of Apple is the same as Google is the same as Amazon,” Ballmer added. “In a sense putting them all together makes good theater but it doesn’t necessarily mean good policy.”

  • SoftBank Announces Settlement With WeWork Founder Adam Neumann

    SoftBank Announces Settlement With WeWork Founder Adam Neumann

    SoftBank Group Corp. (“SoftBank”) today announced that it has entered into a settlement agreement with the Special Committee of the Board of Directors of WeWork Inc. (formerly referred to as The We Company) (“the Special Committee”) and WeWork’s founder, Adam Neumann. The terms of the settlement are confidential. When completed, the settlement agreement would resolve all claims brought in a lawsuit in the Delaware Court of Chancery, and is in the best interests of all parties.

    “This agreement is the result of all parties coming to the table for the sake of doing what is best for the future of WeWork. SoftBank and WeWork have spent the past year transforming the WeWork business and executing on our plan towards profitability. With this litigation behind us, we are fully focused on our mission to reimagine the workplace and continue to meet the growing demand for flexible space around the world.” — Marcelo Claure, Executive Chairman of WeWork, CEO of SoftBank Group International, and Corporate Officer, Executive Vice President and COO of SoftBank.

    The Wall Street Journal previously outlined the likely settlement:

    WeWork co-founder and former Chief Executive Adam Neumann is set to reap an extra $50 million windfall and other benefits as part of an agreement that would settle a bitter dispute he and other early investors in the shared-office-space provider have waged with SoftBank Group Corp., according to people familiar with the matter.

    As The Wall Street Journal reported earlier this week, the parties are closing in on a deal in which SoftBank, WeWork’s majority shareholder, would buy about $1.5 billion of stock from other investors, including nearly $500 million from Mr. Neumann. That is about half as much as it previously planned to buy.

    But part of the deal not previously reported sets Mr. Neumann apart from other shareholders. It calls for SoftBank to give the 41-year-old the $50 million special payout and extend by five years a $430 million loan it made to him in late 2019, the people said. SoftBank is also slated to pay $50 million for Mr. Neumann’s legal fees. It isn’t clear how much it is paying for the other shareholders’ legal fees.

  • ServiceNow CEO on “The Whole Point Of Digital Transformation”

    ServiceNow CEO on “The Whole Point Of Digital Transformation”

    “Business is really simple, and people are more productive, and they’re doing things that can lead to growth and opportunity,” says ServiceNow CEO Bill McDermott. “That’s the whole point of digital transformation. Right now, companies are hunkered down with systems that are absolutely wearing them out. It’s time to make the bold move, pivot to ServiceNow, and let’s get in there and fix the job.”

    Bill McDermott, CEO, and President of ServiceNow says that only one in four digital transformation projects actually deliver positive ROI due to lack of integration:

    Most Digital Transformation Projects Don’t Deliver

    We have a situation on our hands where digital transformation, cloud computing, and business model innovation, are all converging at once. ServiceNow is the platform, of all the enterprise platforms, that really makes business work. One of the big lessons that business has right now is trillions have been poured into digital transformation yet only one in four projects actually deliver positive ROI. The reason for that is lack of integration.

    Our system integrates with all the existing systems as well as all the collaborative tools in the enterprise. From day one, the customer gets it up and running swiftly because it’s in the cloud. They begin to derive value from it because you automate the way the work is done and ultimately, you’re now in a position to serve your customers the way they want to be served. It’s a speed game and ServiceNow is at the top of its game.

    Companies Have To Create New Business Models

    We’re an example. If you’re going to grow your company you’re going to take advantage of digital transformation. This is the only way out and it’s the only way forward. In the 20th Century companies put in big heavy on-premise systems. The issue is now they can’t, in a frictionless economy, immediately pivot those business models because they haven’t digitally transformed their business.

    About 25 percent of the opportunity of businesses out there today over the next three years will come from white space places they are not in today. They have to create new business models. They have to think about new partnerships and new routes to market. Without the baseline of a platform like ServiceNow they’re not going to get there. 

    That’s The Whole Point Of Digital Transformation

    I am very optimistic that the economies of the world not only are going to recover but actually going to do very well this year because people are going to be investing in digital transformation. We have seen that does not cost jobs. On the contrary, it frees people up to do things like go after new markets, derive new ideas, and so forth, because the AI revolution is also on.

    We have built-in machine learning and AI into our platform. So 80 percent of the soul-crushing work people don’t want to do is done by the Now platform. The 20 percent that involves a human immediately gets initiated through a workflow order from the Now platform. 

    Business is really simple, and people are more productive and they’re doing things that can lead to growth and opportunity. That’s the whole point of digital transformation. Right now, companies are hunkered down with systems that are absolutely wearing them out. It’s time to make the bold move, pivot to ServiceNow, and let’s get in there and fix the job.

    Fastest-Growing Pure-Play SASS Silicon Valley Company

    If you look at our actual earnings results, they were stunning and obviously achieved beyond expectations performance across the board. We also followed that through in the guide. We’ll continue to be the fastest-growing pure-play SASS Silicon Valley company. We will continue to have the best margin profile of all of them. Obviously, we’re going to continue to gain market share in industries around the world, in geographies around the world, particularly in Europe and Asia Pacific, and Japan. 

    We will also gain market share on personas. Lots of people are getting the memo now that ServiceNow obviously dominated the IT automation market but the same backbone platform has enabled us to change the employee experience, the customer experience. In these tough times with COVID we can write low-code onto our platform in minutes and roll out new applications to hundreds of thousands of people so companies can move super fast.

    We keep the guide consistent with the revenue that we generated in 2020. If there’s an upside to that… fantastic. That’s what good companies should do. They should go beyond expectations when they can but we stand by the guide and we’re looking forward to having a great year. 

    ServiceNow Was Born In The Cloud

    The whole idea of ServiceNow is so different than SAP which was a company that needed to pivot to the cloud in 2010. We did that and that was very successful. ServiceNow was born in the cloud. It’s a very young company with tremendous growth opportunity on the organic front. Having said that, (we would be in interested in an acquisition) if you have a situation where there is a partner out there that has a substantial TAM, that can be highly complementary and synergistic with ServiceNow on the revenue side. 

    It also would have to do great things for the customer, because we have a precious platform and we jealously protect the integration power of that platform. A lot of things would have to be right but I can tell you as responsible business people we always look at it. We don’t need it to make our goals but you always have to look at it. We do want to be the defining enterprise software company the 21st century. That’s our plan.

  • Box CEO: I’m A Pretty Annoying Founder

    Box CEO: I’m A Pretty Annoying Founder

    Box co-founder and CEO Aaron Levie recently appeared on the Jason Calacanis podcast, This Week In Startups, where he talked about being annoying and stubborn:

    I’m a pretty annoying founder. I’m very stubborn and very steadfast. Sort of this is my very strongly held opinion and belief and I’m gonna run into a wall to prove it out. That has certain characteristics that can be annoying at times I’m sure both at the investor level as well as for anybody that is working with me. I’ve been able to tone it down over the years and control it more and contain it. I think it’s not causing probably as much annoyance.

    You have to be stubborn and right is the key. Stubborn and wrong means new job. There’s a Venn diagram of stubborn and right and you want to be right in that target zone. I look back when when I was 20, 21, or 22 and learning this trade and there were plenty of times where I was stubborn and wrong where maybe I took too long to pivot.

    My co-founder was telling me we’ve got to go enterprise probably for three to six months earlier than we actually did. What are three to six months in compounding terms? I don’t know. Maybe we’d be 20 percent bigger now as a result of if I had not been so stubborn at that stage and not seeing the information in the way that he was? That can just be sometimes an annoying pattern that people run into.

    Box CEO: I’m A Pretty Annoying Founder
  • Tesla Rocks Bitcoin Market With $1.5 Billion Purchase

    Tesla Rocks Bitcoin Market With $1.5 Billion Purchase

    Tesla announced in an SEC filing Monday that it has invested $1.5 billion in bitcoin. “We invested an aggregate $1.50 billion in bitcoin and may acquire and hold digital assets from time to time or longterm.” Tesla also announced that they will accept bitcoin as payment going forward. “Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.”

    This news rocked the bitcoin market causing bitcoin prices to soar to record heights. For the first time ever bitcoin moved above $43,000 and currently (as of this writing) sits at $43,735.84.

    Tesla SEC Filing:

    In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not
    required to maintain adequate operating liquidity. As part of the policy, which was duly approved by the Audit Committee of our Board of Directors, we may
    invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified
    in the future. Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or longterm. Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a
    limited basis, which we may or may not liquidate upon receipt.

  • Elon Musk: People With MBAs Want To Parachute Into Being The Boss

    Elon Musk: People With MBAs Want To Parachute Into Being The Boss

    Tesla and SpaceX CEO Elon Musk was recently interviewed by renowned manufacturing guru Sandy Munro where he talked about MBAs. Musk is not a fan of how people with MBAs from high profile business schools seem to think that they should go directly from school to a leadership position before they have had any actual experience.

    Here are Elon Musk’s somewhat colorful comments on MBAs. The full interview with Elon Musk can be watched below as well:

    The path to leadership should not be through an MBA business school situation. It should be kind of work your way up and do useful things. There’s a bit too much of the somebody goes to a high-profile MBA school and then kind of parachutes in as the leader but they don’t actually know how things work. They could be good at say PowerPoint presentations or something like that, and they can present well, but they don’t actually know how things work. They parachute in instead of working their way up. They’re kind of like just not aware of what’s really needed to make great products. 

    I don’t want to trash MBAs too much here. I actually do have a dual undergrad, a Wharton undergrad, and physics at UPenn. I have direct exposure to business school and I went to do undergrad school with physics and I was a teaching assistant for two semesters and I graded MBAs and undergrads. I think it’s just a little bit too much. People look at MBA school as like I want to parachute into being the boss instead of earning it. I don’t think that’s good. 

    Elon Musk: People With MBAs Want To Parachute Into Being The Boss
  • Video: Amazon’s New Electric Vans Quietly Delivering

    Video: Amazon’s New Electric Vans Quietly Delivering

    Amazon has just launched their first electric Rivian delivery vans on the road in Los Angeles. Customers will begin seeing the custom electric delivery vehicles in up to 15 additional cities in 2021. The company plans to have a 10,000 electric delivery fleet operating on the road in the United States and Europe by 2022.

    “We’re loving the enthusiasm from customers so far—from the photos we see online to the car fans who stop our drivers for a first-hand look at the vehicle,” said Ross Rachey, Director of Amazon’s Global Fleet and Products. “From what we’ve seen, this is one of the fastest modern commercial electrification programs, and we’re incredibly proud of that.”

    Ross Rachey, Director of Amazon’s Global Fleet, outlines the company’s electric delivery plans:

    “We are reimagining sustainable delivery,” says Ross Rachey, Director of Amazon’s Global Fleet. “Climate change doesn’t allow us to sit back and be passive. We can’t wait. This vehicle went from sketch, to design, to on-road testing with customer deliveries in just over a year. And we’ll build on that momentum heading into full-scale production.”

    “Amazon made a commitment to be net-zero carbon by 2040,” notes Rachey. “Electrifying our fleet is going to help us get there. We’ve relied on Rivian’s automotive expertise. We’ve listened to our drivers. We’ve created something that’s at the leading edge of safety technology, that’s better for our drivers, better for the planet, and unlike anything that’s out on the road today. We’ve reset expectations for electric delivery vehicles. And we’re just getting started.”

    Amazon partnered with Rivian, leveraging its customizable skateboard platform to create a first-of-its-kind all-electric delivery vehicle. “Rivian’s purpose is to deliver products that the world didn’t already have, to redefine expectations through the application of technology and innovation,” said RJ Scaringe, Rivian Founder and CEO. “This milestone is one example of how Rivian and Amazon are working toward the world of 2040, and we hope it inspires other companies to fundamentally change the way that they operate.”

    The current fleet of vehicles was built at Rivian’s studio in Plymouth, Michigan, and can drive up to 150 miles on a single charge according to the company. Amazon has installed thousands of electric vehicle charging stations at its delivery stations across North America and Europe.

    Amazon explains it’s ambitious goals:

    Along with custom electric delivery vehicles, Amazon is exploring new technologies, alternative fuels, and delivery methods that deliver packages to customers in a more sustainable way. Amazon currently operates thousands of electric vehicles worldwide and is redesigning its delivery stations to service electric vehicles—ranging from the electrical design to the physical layout. Last year, Amazon delivered more than 20 million packages to customers in electric delivery vehicles across North America and Europe and will continue building on that momentum in 2021.

  • COVID Has Really Impacted Aerospace… and the Air Force

    COVID Has Really Impacted Aerospace… and the Air Force

    “COVID has really impacted the aerospace industry in this nation and nations around the world disproportionately to other industries… and the Air Force has not been exempt from these impacts,” says former Assistant Secretary of the Air Force for Acquisition, Technology and Logistics, Dr. Will Roper:

    COVID Has Really Impacted Aerospace… and the Air Force

    COVID has really impacted the aerospace industry in this nation and nations around the world disproportionately to other industries. The Air Force has not been exempt from these impacts. We have had to go into a wartime posture and engage with exceptional authorities and funding to keep the aerospace industry, which allows us to go to war, whole.

    But aside from the crisis response that we’ve all been in it’s forced us to do some serious reflection about how we engage with production and supply chains going forward. How does the Air Force need to change the way it views its future self so that we’re not just more ready for a crisis when it occurs but we’re actually designing better systems, doing better engineering, and using technology more effectively? Systems that we need to go to war are going to be hidden behind doors where their vulnerabilities are never going to be exposed because of secrecy.

    Secrecy Hinders Our Ability To Digitally Go To War

    We’re moving into an era where we’re leveraging commercial technology more frequently. Because of that, we can no longer hope that secrecy, keeping our systems classified, will be the sole means for us to be secure. We need to find a new paradigm where openness is also part of our security posture. Now we’re not going to be able to copy commercial industry one for one. Our systems in many cases don’t have a commercial analog. We can’t quickly replace them.

    We’re not in a competition where spirals occur in years. Many of our aerospace breakthroughs, especially those in technologies like stealth, take time to do. Secrecy is going to continue to be part of the equation. But secrecy can’t be the catch-all approach to how we ensure systems are able to digitally go to war and be ready to fight in a cyber environment against an adversary as capable as we are.

    Containerization Solves The Secrecy Problem

    The software development capabilities that technologies like Kubernetes or containerization and Istio bring in to the Air Force. It’s amazing that companies like Google that have now transitioned this to an open-source driven initiative have solved a lot of what we would have to solve as a military. How do you write code in a development environment, in that tech stack that may also represent the physical aspects of your system, but it certainly represents the software components?

    How do you go from your development environment out to the edge securely and know your code will run the same way. Containerization solves that problem for us. The military is behind and adopting it. It’s not old but this technology is moving through industry as fast as Linux did. If we don’t get off the dime we will be left behind. Keep pushing the Air Force and Space Force on this. Do not let us get comfortable.

    COVID Has Really Impacted Aerospace… and the Air Force
  • SolarWinds Hack Was Supply Chain Attack, Says Datadog CEO

    SolarWinds Hack Was Supply Chain Attack, Says Datadog CEO

    “What’s interesting here about the SolarWinds hack, in particular, is that it’s what’s called a supply chain attack,” says Datadog CEO Olivier Pomel. “This means the attack was made on the code that was shipped to the SolarWinds customer. Then there is this new notion in security called shifting left. By left, it means is closer to the developer and earlier in the development process.”

    Datadog CEO Olivier Pomel discusses how the SolarWinds hack signals an increased focus by hackers to target software earlier in its development:

    The SolarWinds hack was definitely a very big one. It’s not especially surprising to see new important hacks like this one but definitely a very impactful one. What it makes very clear is that there’s going to be even more of an arms race when it comes to security. It’s not surprising companies are transforming. They’re having more and more of their activity that is happening online is happening in software. So there’s much more that can be done by attacking that software.

    What we do is we gather as many signals as possible across observability and monitoring. This is the way we come from and across security. What’s interesting here about the SolarWinds hack, in particular, is that it’s what’s called a supply chain attack. This means the attack was made on the code that was shipped to the SolarWinds customer. Then there is this new notion in security called shifting left. By left, it means is closer to the developer and earlier in the development process.

    There’s something really interesting there when it relates to us (Datadog) in how we can solve the problem for our customers by bringing security earlier into the development process and tied in more to the operations and the development of the application. That’s definitely something that we’re investing in and something that we think is going to be a big area of investment for customers in the future.

    SolarWinds Hack Was Supply Chain Attack, Says Datadog CEO Olivier Pomel
  • HPE Wins Contract to Build Supercomputer For NCAR

    HPE Wins Contract to Build Supercomputer For NCAR

    Hewlett Packard Enterprise (HPE) has won a $35+ million contract to build one of the fastest supercomputers for the National Center for Atmospheric Research (NCAR).

    NCAR is US “federally funded R&D center focused on advancing knowledge of geosciences, including meteorology, climate change, and solar activity.” The organization’s work is more important than ever as the threat from climate change continues to increase.

    The new system will be housed at NCAR’s Wyoming Supercomputing Center in Cheyenne. The system will be a major upgrade over the existing one, providing almost 3.5X faster speed. The supercomputer will go operational in 2022 and help NCAR create digital models of various weather effects to better understand them.

    “This new system, powered by Hewlett Packard Enterprise, is a major step forward in supercomputing power, providing the scientific community with the most cutting-edge technology to better understand the Earth system,” said Anke Kamrath, director, Computational and Information Systems Laboratory at the National Center of Atmospheric Research. “The resulting research will lead to new insights into potential threats ranging from severe weather and solar storms to climate change, helping to advance the knowledge needed for improved predictions that will strengthen society’s resilience to potential disasters.”

  • Snowflake CEO: Once You Get To The Cloud The Lid Is Off

    Snowflake CEO: Once You Get To The Cloud The Lid Is Off

    “Once you get to the cloud all of a sudden the lid is off,” says Snowflake CEO Frank Slootman. “People can just pursue their backlogs and whatever they can imagine. We’re now in a situation where technology is ahead of what people are capable of and imagining what they could actually do with it. That’s really a big part of what you see in Snowflake’s growth profile, a completely variable paradigm.”

    Frank Slootman, CEO of Snowflake, says that on-premise data centers can only accommodate a tiny fraction of what their real demand for data analytics really is:

    Once You Get To The Cloud The Lid Is Off

    The important thing to understand is that there’s a couple of long-term secular trends that are coinciding and driving the development of the market overall. One is, as everybody knows, the movement towards cloud. It’s really a modernization play. We’re moving from on-premise data centers and we’re taking workloads to the cloud because we get to take advantage of better economics and utility models. Then we no longer have to manage capacity, we pay by the drink and all that sort of thing.

    The other aspect that’s really important for our business is that we’ve had an extraordinary amount of pent up demand. The on-premise data centers could only accommodate a very tiny fraction of what their real demand for data analytics really is. Once you get to the cloud all of a sudden the lid is off. People can just pursue their backlogs and whatever they can imagine. We’re now in a situation where technology is ahead of what people are capable of and imagining what they could actually do with it. That’s really a big part of what you see in Snowflake’s growth profile, a completely variable paradigm.

    Notion Of Headquarters Is Evaporating

    We don’t have a yearning to go back to where we were. I can see why people would have that because of lockdowns and things of that sort. From a business standpoint, there’s a lot of positives to the shock to the system that we received. It’s almost like a wake-up call that is just opening our eyes to the opportunity. This whole notion that the office is your workday home we just realized that it’s nonsense. In other words, offices need to be there for specific purposes, for events, for training, for meetings specifically, but not a place to hang out nine to five. That’s definitely changing. It’s going to really reduce the real estate footprint that companies have.

    The other trend and you’ve seen it with companies leaving California, the likes of Oracle and HP and Tesla, and so on is that the whole notion of headquarters is pretty much evaporating in front of our eyes. We’re no longer operating with a physical center of the universe. We’re completely virtual. We’re connecting as needed. We’ve been operating for the better part of a whole year without a headquarters and it’s just fine. All of a sudden everybody’s staring at each other and saying like what is the headquarters anyway. You’ve seen companies like Pinterest and you’re writing up massive leeches in San Francisco and saying we’re going to be headquarter-less. It’s just a concept whose time has gone away… and that’s very profound.

    We Are Buying Talent And Technology, No M&A

    Usually, big M&A is a function of people running out of market and running out of a lot of opportunity. They’re trying to invade adjacent territories to give themselves new runway. That is obviously not the case for Snowflake. We’re in a tremendous marketplace and we are buying talent and technology. We sometimes refer to it as stem cells that we can use that we don’t have ourselves that we can build very specific technologies around that are very much built snowflake way. We can really enable our platform mission or footer. That’s really been our mode. If you looked at our history we don’t have a history of doing big acquisitions.

    Snowflake CEO Frank Slootman: Once You Get To The Cloud The Lid Is Off
  • Datadog CEO: 2020 Was Big Win For The Cloud

    Datadog CEO: 2020 Was Big Win For The Cloud

    “This year we’ve seen fairly brutal changes in patterns of usage in the cloud,” says Datadog CEO Olivier Pomel. “As you can imagine, streaming (has increased). All of a sudden everybody’s kids are watching Disney+. Also, video conferencing, online gaming, and all of that spiked pretty quickly. The way we see that is it’s a big win for the cloud, in general.”

    Datadog CEO Olivier Pomel says 2020 was a big win for the cloud:

    This year we’ve seen fairly brutal changes in patterns of usage in the cloud. As you can imagine, streaming (has increased). All of a sudden everybody’s kids are watching Disney+. Also, video conferencing, online gaming, and all of that spiked pretty quickly. Even if you think of the domains that were negatively impacted by COVID such as travel when all of a sudden everybody had to cancel their travel, it actually meant a lot more activity for the online sites of the travel companies.

    So you see all these patterns of companies pointing up and spinning down. The way we see that is it’s a big win for the cloud, in general. Companies could change their minds they could actually scale up. They could decide to shift different services to have them delivered at different scales instead of having to spend three to six months trying to retool everything and ship that to the data centers. They could do that very quickly in the cloud. We see that as a big win for the cloud.

    Read: SolarWinds Hack Was Supply Chain Attack, Says Datadog CEO

    Next year we still see some scaling from those customers. We see some of the industries that were negatively impacted coming back online and getting back up. Across the board, we see more and more renewed urgency around digital transformation and migration to the clutches precisely because the cloud made it possible for companies to react so quickly. Those who are not on the cloud were more impacted than the others.

    Datadog CEO Olivier Pomel: 2020 Was Big Win For The Cloud