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Category: SupplyChainPro

SupplyChainPro

  • Apple Is Trying To Be A Subscription Company

    Apple Is Trying To Be A Subscription Company

    “Just think about the long term value of Apple and where they’re going,”  says Chegg CEO Dan Rosensweig. “They were a phone company, they were an ecommerce company, and now they’re trying to be a subscription company. You see that in their services and their service numbers. They have the largest distribution system on the planet probably other than Google. If they commit to it there is no reason they can’t be successful.”

    Dan Rosensweig, President and CEO of Chegg, discusses how Apple has pivoted and is trying to become a subscription company selling services, leveraging its huge distribution system, in an interview on CNBC:

    Apple Is Trying To Be A Subscription Company

    Where Apple wants to make (their products) is where it’s cheapest and where they can make the best quality. They’re playing the game now sort of whack-a-mole which is watching the tariffs and all these things. Just think about the long term value of Apple and where they’re going. They were a phone company, they were an ecommerce company, and now they’re trying to be a subscription company. You see that in their services and their service numbers. The supply chain is a thing to talk about over the quarter but in the long term that is all going to be resolved. They’ll be wherever they need to be.

    They have the largest distribution system on the planet probably other than Google. They have been selling other people things through the iTunes store and through the app store. They bought companies in order to be able to sell news and other things and they sell their iCloud. They really have not gotten into content that they own in any significant way. Unless they commit to it they’re not going to be successful. But if they commit to it there is no reason they can’t be successful. 

    Most Of Apple’s Subscription Profit Is Coming From the iCloud

    If you ask what is it that Apple owns proprietarily and offers to their consumer in terms of content other than the iCloud itself, you really can’t come up with anything. Whereas, Adobe has all these software and services and Microsoft has these things. They’re sort of in the content area. They’re in the music subscription area. But even in the music subscription area, they don’t own the content. So it’s hard to make those things as profitable. Although, you can sign up a lot of people. 

    I would estimate that most of their profit from that is coming from just the iCloud. It’s selling storage that everybody needs because your phone is your home base. 

    Apple Is Well-Positioned In Wearables

    I think the iPhone is cyclical. There hasn’t been a big breakthrough. Everything has gotten a little smaller, a little better, a little cleaner, a little faster, and a little bit more secure. I don’t know what the next breakthrough is. What I do know is the need for mobility is endless. The kinds of things that are going to attach to our bodies seem to be endless. I think Apple is well-positioned to be that player. 

    Just in default mode, if you are a user of Apple products you prefer to use Apple products because it’s just easier. The payments there. The clicks there. The operating system is there. It’s just too familiar for you. They chose the highest-priced model. The highest-priced model is generally the smallest group and it ends quicker. The question is can they come up with lower-priced models and then make a lot of their money on subscription services.

    Apple Is Trying To Be A Subscription Company, Says Chegg Chegg CEO Dan Rosensweig
  • Walmart Testing Self-Driving Delivery Vans, Says Gatik AI CEO

    Walmart Testing Self-Driving Delivery Vans, Says Gatik AI CEO

    “Our partnership with Walmart is a huge validation that commercialization and scalability of autonomous vehicles will happen in the B2B short or logistic space,” says Gatik AI CEO Guatam Narang. “Our autonomous vehicles will be moving goods for Walmart from one of their dock stores to their neighborhood markets in Bentonville, Arkansas. Think of our solution as filling the gap. We call it the middle mile. It’s hugely underserved and it’s a huge business opportunity for us.”

    Guatam Narang, co-founder and CEO of Gatik AI, discusses their partnership with Walmart to test B2B self-driving delivery vans near their headquarters in Bentonville, Arkansas. Narang was interviewed on CNBC:

    Walmart Launches Self-Driving Delivery Vans

    Our partnership with Walmart is a huge validation that commercialization and scalability of autonomous vehicles will happen in the B2B short or logistic space. That’s what Gatik focuses on. Both of the companies are very excited about this. Gatik is focusing on scaling and commercialization of the autonomous vehicle technology. Think of our solution as filling the gap. We call it the middle mile. It’s hugely underserved and it’s a huge business opportunity for us. 

    We believe that while operating the vehicles back and forth on known routes we can over-optimize our algorithms to perfect these routes. This is a much more constrained environment. The promise of autonomy can be realized sooner than B2C delivery applications or other applications of autonomous driving technology like passenger transportation. With our application, we are focusing on introducing these vehicles without safety drivers before a B2C delivery application or a passenger transportation application does the same.

    Autonomous Vehicles Moving Goods From Docks to Markets

    We are actually the first company that is working with Walmart for this particular use case. What that means is we are not delivering anything to the end consumer. Our autonomous vehicles will be moving goods for Walmart from one of their dock stores to their neighborhood markets in Bentonville, Arkansas. With some of the other companies that Walmart is working with the focus is more on B2C deliveries.

    Our focus is to move goods between businesses in an urban environment. The whole idea is let’s not try to change end consumer behavior. Let’s try to bring the promise of autonomous vehicles to businesses and help them save on operating cost in the near-term future.

    Gatik Is Focusing Their Driverless Tech On the Middle Mile

    Gatik is focusing on the middle mile. It’s filling the gap between long-haul trucking and the smaller sidewalk delivery robots. The middle mile is the most underserved segment of the whole supply chain. It is also the most expensive part of the whole supply chain. The reason to focus on this middle mile is to help our customers, which are businesses, help them save a lot on the operating cost. In addition to that, there is a huge shortage of drivers in this segment. With our solution, our customers can help fulfill. For us, it’s a huge validation. Right now all the testing and all the deployment is with the safety driver. The aim of the company is to take the driver off, scale the solution, and commercialize this technology. At scale, we are talking about saving up to 50 percent for our customers. The focus is to operate the vehicles on public roads. 

    When we talk about operating these vehicles between businesses, there are a lot of constraints that we can introduce. For example, very famously, FedEx and UPS trucks, they mostly take right turns because it’s more fuel-efficient for them. If we have something similar for our solution what that means is we wouldn’t have to worry about changing lanes. We wouldn’t have to worry about solving a very tricky situation in our space, that is unprotected left turns. As a company and as the solution we have a clear go-to-market strategy by installing or introducing some of these constraints. Not taking left turns is just one example, even though the technology stack can handle left turns, lane change, intersections, and traffic light navigation today.

    Walmart Testing Self-Driving Delivery Vans, Says Gatik AI CEO Guatam Narang
  • Tableau With Salesforce Supercharges Our Organizations, Says Salesforce CEO

    Tableau With Salesforce Supercharges Our Organizations, Says Salesforce CEO

    “The third cornerstone of digital transformation is the analytics and the visualization and the business intelligence to see everything in your company,” says Salesforce co-CEO Marc Benioff. “There’s no more amazing company in that category then Tableau whose mission is to make sure that the world can see and understand data. This is just going to be an incredible acquisition for Salesforce. It’s really the best of both worlds, two amazing companies coming together.”

    Marc Benioff, co-CEO of Salesforce, discusses their transformative $15.3 billion deal for Tableau, in an interview with Jim Cramer on CNBC:

    Tableau With Salesforce Supercharges Our Organizations

    There are really three cornerstones of digital transformation. The first one is the customer. Of course, we do that in spades. We do that better than anybody else. The second cornerstone, we did that a year ago with MuleSoft integration. The ability to integrate all your data sources together so you can get a more holistic view or what we call Customer 360. But you’re really touching on the third cornerstone of digital transformation, which is the analytics and the visualization and the business intelligence to see everything in your company. There’s no more amazing company in that category then Tableau whose mission is to make sure that the world can see and understand data. That is what excites us as well.

    I was in Minneapolis just last week. When I was with one of our very largest customers, they’re doing some incredible work with their supply chain and the ability to connect with their customer in a whole new way. Of course, that’s what we do for them. But at the very end of the meeting, they’re talking about how they’re going to visualize and provide analytics and business intelligence on this incredible infrastructure that we’ve helped them build. They had chosen Tableau. Then, of course, in the back of my mind, I’m thinking, wow, this is just going to be an incredible acquisition for Salesforce. It’s really the best of both worlds, two amazing companies coming together. Tableau is a company at scale. It’s an incredible company and putting that together with Salesforce just supercharges both of our organizations.

    Tableau Didn’t Want Our Cash, They Wanted Our Equity

    In terms of cash flow, I don’t know if you remember our quarter that we just announced last week but we had record cash flows. We’ve had phenomenal cash generation. Our business has done a great job in cash. But I have to be honest, Tableau didn’t want our cash. They wanted our equity. They know that the real value here is in the company that we’re creating together. We would have been more than happy to give them any currency they wanted but ultimately they want our stock.

    Hey, I can’t blame them. Look at how it’s performed over the last decade. It’s been incredible. I have a huge vision and so do they on what’s possible for the future. When you look at that we’re really looking at a company that’s going to fast track to $30 billion in revenue in enterprise software and there just isn’t very many of those companies out there today.

    We Can’t Build the Technolgy Fast Enough

    I’m a huge believer in innovation. It’s one of our core values. Our four core values; trust, customer success, innovation, and equality. Let me just talk about innovation for a second. I so strongly believe in not just organic innovation, and you’ve seen that of course, our core Sales Cloud, our core Service Cloud, and our core platform, but I also strongly believe that companies to be competitive and successful today have to also believe in inorganic innovation. You don’t have to look any farther than things like our Marketing Cloud or Commerce Cloud and our Integration Cloud as well. In these technologies, we were able to acquire great companies like ExactTarget, like Demandware, and like MuleSoft, that became the heart of our Customer 360.

    We can’t build the technology fast enough to be able to deliver to our customers demand.  Now by doing that (acquisition of Tableau) we are able to create this complete Customer 360 platform that gives our customers everything they do to not only connect with their customer in a whole new way, not only to connect with every data source they have but also to be able to have the visualization data analytics and business intelligence to achieve their total success. For digital transformation, which is what’s happening right now, that is mission critical.

    Tableau With Salesforce Supercharges Our Organizations, Says Salesforce co-CEO Marc Benioff
  • IBM Says Blockchain-Powered Shipping Industry Platform Will Dramatically Reduce Costs

    IBM Says Blockchain-Powered Shipping Industry Platform Will Dramatically Reduce Costs

    Major ocean container carriers CMA CGM and MSC Mediterranean Shipping Company (MSC) are joining TradeLens, a blockchain-enabled digital shipping platform, jointly developed by A.P. Moller – Maersk and IBM. With the addition of these carriers on the TradeLens platform, nearly half of the world’s ocean container cargo will be using blockchain technology to dramatically improve costs and efficiencies.

    Bridget van Kralingen, Senior Vice President of IBM Global Industries, Clients, Platforms & Blockchain at IBM, discusses the addition of major ocean carriers to the TradeLens blockchain-enabled digital shipping platform in an interview on Bloomberg:

    Blockchain Technology Could Reduce Shipping Industry Costs By 20%

    Essentially we announced yesterday that with the addition of MSC and CMA on to the TradeLens blockchain more than 50 percent of the volume of the containers of the world’s shipping industry will be on a blockchain that we’ve developed in collaboration with Maersk. What this means is full transparency and a massive reduction of paper exchange. An average shipment takes about 200 document exchanges between the multiple parties; the freight forwarders, the shippers, the carriers, customs, and ports.

    The World Economic Forum estimates that’s about 20 percent wastage from inefficiencies in the supply chain. The technology of blockchain allows all these multiple parties to immutably store the records and advance the records as the shipments move. This means less wait times. It means carriers and shippers know where the goods are. It basically means things can be cleared a lot faster, all leading to bigger inclusion in the shipping industry.

    Starting To See Blockchain Technology For Enterprise Really Scale

    The whole ecosystem will benefit so much in terms of the efficiencies. If you think about it, rather than having to interface 200 document times, it occurs once by putting your data on the blockchain. This is a situation when the ROI for every single industry participant is very strong.

    The second thing, which is really important and why we’re starting to see the blockchain technology for enterprise really scale in terms of what IBM has been building for our clients across numerous industries, is that there’s a level of security in here and there’s a level of speed and efficiency. It’s easy to actually set up these networks. The difference is that these solve problems that no one company could solve on their own.

    Blockchain Technology Reducing Costs

    The way that the system works is that all the participants pay a very small amount to belong to the blockchain. It is a flat rate but does change according to volume. It is a very de minimis amount and the real way that the blockchain works is by many many participants belonging to the network and by the fact that those participants have a reduced cost.

    Another example of this is we have a blockchain in the consumer and retail industry called Food Trust which tracks provenance and sustainability of food built in conjunction with the industry. It allows food to be tracked and recalled in two seconds versus six days. That has got such a strong economic and consumer value. The other big payback is that for many of our clients they’re looking at the idea to have trackable, sustainable, consumer presentations. So you can put diamonds on a blockchain and say they aren’t conflict diamonds. This is very powerful for consumer provenance and sustainability.

    Blockchain-Powered Shipping Industry Platform To Dramatically Reduce Costs
  • We’re Enabling a New Era of Hospitality, Says Toast CEO

    We’re Enabling a New Era of Hospitality, Says Toast CEO

    “We’re enabling what we call this new era of hospitality,” says Toast CEO Chris Comparato. “We’re investing heavily in R&D. This is a massive opportunity and the restaurant community is a massive market. The market is untapped and we’re in the early days of a major transformation across the entire industry. For us in many ways, we’re still getting started because we’re making massive investments in R&D across the whole spectrum.”

    Chris Comparato, CEO of Toast, discusses how the company is continuing to invest in R&D and innovate as they disrupt the hospitality industry in an interview on Bloomberg Technology:

    We’re Enabling a New Era of Hospitality

    We’re going to do a lot with the money. It’s a nice capital raise ($250 million). We’ve been busy over the course of the past two years really trying to affect a lot of change across the restaurant community. We’re enabling what we call this new era of hospitality. We’re investing heavily in R&D. We look at all of the stakeholders, we look at the guests, we look at the employees, and we look at the owner-manager-operator. This is a massive opportunity and the restaurant community is a massive market. The market is untapped and we’re in the early days of a major transformation across the entire industry. For us in many ways, we’re still getting started because we’re making massive investments in R&D across the whole spectrum.

    A good example of what we are doing is how do you get orders into the restaurant? In today’s consumer, personalization, and convenience environment, how does the restaurant get orders? Whether it’s a tool like Toast TakeOut which we piloted in Boston, which allows you to do mobile order ahead with your phone. Or possibly a kiosk or online ordering or a device called Toast Go which we released last year that allows the waitstaff to take orders at the table and turn tables faster. Toast brings (to restaurants)  two things. It’s all about more revenue in the door and then operational efficiency.

    Toast Growing North of 100 Percent Year-Over-Year

    First and foremost we’re happy being private and putting investments to pilots and R&D and really breaking fruit to the future for the restaurant community. I’ve had a lot of friends who have gone public recently and we’re in no rush. I think it’s a milestone. We’re after building long-term shareholder value. When we look at the opportunity for us it’s to build a pillar company in Boston for the restaurant community that builds long-term investor value.

    We’re growing north of a hundred percent year-over-year in terms of the customer base (and revenue). We’ve got over 1,500 employees. We’ve probably added a thousand employees in the past couple of years. We have an engineering center in Dublin but we’re still US-based in terms of the restaurants that we serve. We serve restaurants across the United States, whether it’s an enterprise like Jamba Juice or nationally acclaimed restaurant operators like Danny Meyer and Jose Andres. We’re all over the US in 30 markets but it’s still the early days.

    Innovating Across the Entire Restaurant Value Chain

    We look at the entire restaurant value chain and we’re trying to make their lives better. It’s hard to run a restaurant. This week we announced Toast Payroll and Team Management. A lot of restaurant operators are spending hours doing payroll every Friday. If we can give them their Friday’s back and streamline payroll so that they can get hours back on efficiency to spend more time with guests that’s what we’re doing. We launched that this week which is an exciting new venture for us. We’re going to continue to innovate across the entire restaurant value chain. This includes the back-office, front office, supply chain, whatever it is.

    There are areas where we built and there are areas where we partner. I think it’s a space that’s dynamically changing. At the end of the day, we want to help transform the community and move the community forward. The Boston Market (where Toast is headquartered) is tremendous. There is sort of two sides to the market. You’ve got this amazing supply chain of talent with MIT, BU, UMass, and Harvard. There is plenty of talent. Then you’ve got on the other side of the market these companies that are transforming industries like Wayfair, CarGurus, HubSpot, and Toast. It’s an amazing market for us to thrive in and it’s an awesome restaurant community.

    We feel like we’re enabling the community to thrive. A lot of the restaurants that are running Toast are adding workforce. Because we’re making their jobs easier they can spend more time with guests, more time cooking, and more time managing the operations. We see a lot of restaurants that are thriving and adding labor and we’re trying to make it easier for them.

    We’re Enabling a New Era of Hospitality, Says Toast CEO Chris Comparato


  • How WeWork is Using Technology to Revolutionize Office Space Worldwide

    How WeWork is Using Technology to Revolutionize Office Space Worldwide

    “We open 15 to 20 buildings a month,” says WeWork CTO Shiva Rajaraman. “Anything we can use to automate or augment a person through machine learning we’re taking all that data in one central place and starting to create an engine around that. That’s key to successful scaling today. When we think about enterprise we sort of step back and say what’s our Google Analytics for commercial space?”

    Shiva Rajaraman, Chief Technology Officer of WeWork, discusses how WeWork is using technology to revolutionize office space worldwide in an interview on Bloomberg:

    How Do We Offer Space As a Service?

    There are three capabilities when we think about WeWork. One is how do we offer space as a service? If you just think about it’s really basic. Are you looking for what location do you need? Where do you need it? How long do you need it? Are there different pricing models for it? One of the things we’ve done is effectively taken all of this space and put it into a big database and we start to shape it based on what we see out there in the market. Some of that is just pricing automation at the end of the day. Some of it is how do we automate that supply chain of delivering a building?

    We open 15 to 20 buildings a month. Anything we can use to automate or augment a person through machine learning we’re taking all that data in one central place and starting to create an engine around that. That’s key to successful scaling today. The biggest technically challenging thing is operational scale. If you step back you don’t want a lot of variability. You want to step back and say, “Hey, can I deliver this building on time at quality as people need it?” That’s where you need operational technology that really works in a way that normally construction has not worked in the past.

    What’s Our Google Analytics for Commercial Space?

    One of the key things on the strategy side is that as we see this demand and we start to get critical mass in different areas can we disrupt the business model a little bit? Let me give you an example. If you take someone like GE Health in Seoul, South Korea, they had underutilized real estate. We redesigned that so they can use it in a more flexible way. We also created a new membership called the City Pass which gives all of their employee’s access to WeWork throughout Seoul. Now they can go where they’re more productive. One of the key things we’re looking at right now is what’s a density that translates to interesting memberships that allow people to be more productive?

    Let’s talk about the M&A that’s created a fabric that we can start to offer to enterprises. When we think about enterprise we sort of step back and say, “What’s our Google Analytics for commercial space?” Can we help these enterprises create a good workplace experience through things like room booking (service) all the way to understand how they use space so they can come and use WeWork on demand if they need it. We can also help them grow in the future if they’re looking at new markets to expand into.

    How WeWork is Using Technology to Revolutionize Office Space Worldwide


  • Building the Target of the Future

    Building the Target of the Future

    “We dropped back several years ago and started thinking about building the Target of the future,” says Target CEO Brian Cornell. “It really started with an investment in understanding the consumer and really understanding what they were looking for and how to build the capabilities starting with data science to really guide us through that journey. Whether that’s technology or supply chain capabilities, product design, or our focus on execution at the store level, data and analytics have been important guideposts for us as we’ve gone through this journey.”

    Brian Cornell, CEO of Target, discusses the details of how the company is building the Target of the future in an interview at the Stanford Graduate School of Business:

    Reimagining Stores and Investment in Technology is Paying Off

    Target’s (current success) is really a combination of a number of things that we’ve been working on for several years now. If I go back to February of 2017 we laid out a three-year vision for the company. We said we’re going to invest billions of dollars. At that point, I said $7 billion dollars over a three year period to invest in reimagining our stores, in building new smaller stores and urban centers and on college campuses, reinvest in our brands, invest in technology and fulfillment capabilities, and make a big investment in our people.

    The success we’re seeing right now is really a combination of all those elements starting to mature. We’re executing at scale and they’re all starting to work together. That’s driving for us great top-line growth, market share gains, and importantly more traffic in our stores and visits to our site.

    In Most Cases Shopping Starts With the Mobile Phone

    I actually think blend (of digital and physical) is the right term. I think from a consumer standpoint they’ve really lost sight of whether they’re shopping in a physical environment or a digital environment. In most cases, their shopping starts with that mobile phone in their hands, that digital device. It’s how they decide where they’re going to shop and what they’re looking for. If you went to one of our Target stores this afternoon I guarantee you we’d find consumers with a phone in their hand, they’d be looking at their latest Pinterest, they’d be checking things on their favorite digital site, and they’d have their shopping list there.

    That device really guides them through the shopping experience. I think more and more there’s a blurring and a blending that’s taking place and it’s a combination of both. The consumer today is enjoying the fact that shopping has become really easy. They get the best of both. They get a physical experience when they want it and if they don’t have time they can shop from their desk or from their classroom. They’re constantly in touch and we’ve made it really easy now for them to interface with our brand on their own terms.

    Building the Target of the Future

    We dropped back several years ago and started thinking about building the Target of the future. It really started with an investment in understanding the consumer and really understanding what they were looking for and how to build the capabilities starting with data science to really guide us through that journey. I can talk a lot about strategy, but the other thing that we’ve recognized is how important it is to have the right capabilities in place. Whether that’s technology or supply chain capabilities, product design, or our focus on execution at the store level, data and analytics have been important guideposts for us as we’ve gone through this journey.

    We’ve been fortunate in that we’ve recruited quite a few Stanford grads. I think what’s attracting them to our business is the richness of our data. The fact that on an average week we get 30 million consumers shopping our stores and a similar number going to Target.com. We have all this rich data and we understand where consumers are shopping, what they’re looking for, and I think they’ve been really intrigued by the ability to take that data and help us build a future.

    The Consumer is Looking For a Unique Personalized Experience

    I’ve certainly seen this trend towards personalization and localization. If I think about the changes in consumer packaged goods, in some cases those big brands that you and I grew up with, well they’ve been replaced by smaller local niche brands that we didn’t see when we grew up and they’re being regionalized across the country. I think the consumer today is looking for that unique personalized experience, whether they’re shopping a Target store or they’re walking through a local store right here on the Stanford campus.

    I think I walked in recognizing the importance of a clear strategy for an organization. But I’ve come to realize just how important culture is, a clear purpose, and importantly ensuring that our strategy is supported by great capabilities and the importance of team. I think (as we look toward the future) we’ll still be true to the purpose we have today. It’s really focused on bringing a little bit of joy to all the families we serve each and every week and really enhancing their everyday life. I think that focus on families, that connection we have today with moms with kids with families across the country, will be as true in the future as it is today.


    Building the Target of the Future – Target CEO


  • A Facebook Coin is Probably the Next Big One, Says Blockchain Capital Limited Co-founder

    A Facebook Coin is Probably the Next Big One, Says Blockchain Capital Limited Co-founder

    “For multinationals to issue their own currencies and request that their consumers purchase in that particular currency is not that outlandish,” says Blockchain Capital Limited co-founder Gavin Brown.  “So perhaps with multinationals being what they are the fact that they are able now digitally and technologically to issue their own currencies and request their consumers to use it is perhaps not a sort of an unreasonable thing to think. It may not be the whole mission short term but certainly in the medium term for sure. I mean a Facebook coin is probably the next big one I think.”

    Gavin Brown, co-founder & director at Blockchain Capital Limited discusses blockchain and cryptocurrencies in an interview on CNBC:

    Wherever There is Potential for Mistrust Blockchain Can Be a Solution

    We’re still very early in the technology, so a lot of people obviously associate bitcoin with blockchain, which is the underlying technology, which is understandable. However, the thing that most people fail to realize is that blockchain technology can obviously be applied to many different sectors and many different industries. I’m really keen, especially in the UK where I do a lot of work in my Future Economies Research Center which is a run out of Manchester Metropolitan University.

    What we do there is we look at various industries where blockchain is a really good solution to manage lots of things around provenance and trust, scalability, traceability and things like goods supply chains. Really, wherever you’ve got the potential for mistrust blockchain can be a potential solution.

    There Are Now Over 2,000 Cryptocurrencies

    Regarding cryptocurrencies, If you look overall there are over 2,000 coins in total now. If you look at fiat currencies, the money we use day-to-day, there are 180 fiat currencies recognized by the United Nations globally. Yet there are over 2,000 cryptocurrencies most of which are trying to be some kind of money replacement. So the general play and the way I perceive it is that we will have a shakeout phase as we do with any kind of technology and we’re likely to see it coalesce around either one or a handful of winners.

    Those winners will obviously win big. Identifying who they’re going to be is obviously the challenge. That’s why for most people they’ll probably want to run a portfolio inside the crypto asset space to try and maximize their chances. This is almost similar to a sort of leverage private equity-type model the way you’re running lots of different plays, where most will lose, but if you get the winner then you win big.

    A Facebook Coin is Probably the Next Big One

    What we’re seeing really is the democratization of money. If you and I wanted to we could create a CNBC coin and within three hours we could have it up and running and when we transact with people we could request that we do it using that particular coin. It raises the question of will people trust that coin? They will trust it if they trust your brand and f they trust your products. For instance, Starbucks has over a billion dollars worth of assets on its balance sheet of people who prepaid for coffee on their charge cards in advance. That’s because they trust the brand, they like the product, and they’re confident it will be there.

    For multinationals to, therefore, issue their own currencies and request that their consumers purchase in that particular currency is therefore not that outlandish. We live in an era where McDonald’s has got a higher credit rating than the country of Ireland. So perhaps with multinationals being what they are the fact that they are able now digitally and technologically to issue their own currencies and request their consumers to use it is perhaps not a sort of an unreasonable thing to think. It may not be the whole mission short term but certainly in the medium term for sure. I mean a Facebook coin is probably the next big one I think.

    A Facebook Coin is Probably the Next Big One, Says Blockchain Capital Limited Co-founder


  • Oracle CEO: Applications Market Changes Significantly As It Moves to Cloud

    Oracle CEO: Applications Market Changes Significantly As It Moves to Cloud

    “The applications market is about $125 billion per year,” says Oracle CEO Mark Hurd. “That is spent primarily on applications and most of it today is spent on on-premise applications. That market changes pretty significantly as it moves to cloud. As it moves to cloud, the subscription that you pay for the cloud includes not only the application but includes all of the hardware, the servers, and storage. It becomes a bigger market just by the very nature of the migration of the application to SAAS.”

    Recently, Hurd noted that all of their current customers will eventually move to the cloud. “We have a big existing on-premise user base and I believe all of them will move to the cloud,” said Oracle CEO Mark Hurd. “In fact, I was with a large group of our users just last night and they’re all going to move on their time frame. When we get to a certain point you will start to see a geometric move in the market and it will be significant.”

    Mark Hurd, CEO of Oracle, discusses their NetSuite acquisition and the growing size of the applications market as it moves to the cloud in an interview on Fox Business. Hurd was in Las Vegas for the Oracle NetSuite SuiteWorld event:

    NetSuite Acquisition Has Been an Amazing Success

    We’ve invested a lot in the applications market. We’ve invested in big and small segments of the market. Big customers and small customers. We acquired NetSuite about two and a half years ago it’s really been an amazing success. There are roughly 10,000 customers here (in Las Vegas) for our event (Oracle NetSuite SuiteWorld). It is very exciting.

    When we bought NetSuite the company was growing about 16 percent in revenue. We’ve invested a lot in R&D and in tailoring the application for more industries. We’ve added sales people as well. It has resulted in incredible growth. Starting about a year ago we began to really grow our booking and that’s now translated to revenue. Last quarter we reported revenue that was almost double the revenue growth we had coming into the acquisition.

    Applications Market Changes Significantly As It Moves to Cloud

    There is a couple of phenomena going on at the same time. The applications market is about $125 billion per year. That is spent primarily on applications and most of it today is spent on on-premise applications. That market changes pretty significantly as it moves to cloud. As it moves to cloud, the subscription that you pay for the cloud includes not only the application but includes all of the hardware, the servers, and storage. It becomes a bigger market just by the very nature of the migration of the application to SAAS.

    Inside that $125 billion about $75 billion is back office. That would be described as things like general ledger, accounting, supply chain, procurement, and HR. The other 30 percent is front office including things like sales automation and marketing automation. NetSuite has played in the mid-market, small customer side of that back office market. It’s had explosive growth. When you ask who’s moving (to the cloud), it’s really everybody from the biggest guys, whether those be as big as an AT&T all the way to your smaller startup.

    If you look today, half of the cloud application customers (and revenue) that we have came from our base and half came from outside.

    Oracle CEO Mark Hurd – Application Market Changes as it Moves to Cloud
  • AI: The Secret To Sustainable Supply Chains?

    AI: The Secret To Sustainable Supply Chains?

    For businesses, especially those operating heavily within E-commerce, what do truly sustainable solutions look like? From open lines of communication to central intelligence systems, as the pressure in the shipping and logistics departments mounts, retailers have more to focus on than just creating quality goods and services. Artificial intelligence is changing the game for sustainability in supply chains.

    In 2018 alone, eight out of ten customers were unlikely to shop again with a retailer after a poor delivery experience. Setting aside dissatisfaction of products, poor quality, or too high prices, consumer focus on fast and reliable delivery is quickly becoming a top priority. Between 2016 and 2017, E-commerce sales themselves grew by 16%, express shipping air freight volume grew by 9%, and US imports increased 5%. As a result, companies in the US are spending a total of $1.5 trillion on shipping and logistics, and yet, it still may not be enough.

    Amazon shipping options have undoubtedly raised the bar for both consumer expectations and E-commerce as a whole. Free two-day shipping, for its millions of customers, is well worth the yearly Prime subscription and keeps shoppers localized within Amazon’s marketplace. Yet, three in four consumers would choose another retailer over Amazon if that retailer offered better delivery options – no small feat.

    Perhaps more so than any other department, shipping and logistics come with plenty of unique complications and problematic inefficiencies. Too many inefficiencies and the consumer base is likely to notice. For late and unsatisfactory deliveries 90% of consumers expect a full refund; additionally, their expectations range from notifications, flexible delivery windows, and real-time tracking visibility. This can be tricky to manage for businesses, especially when juggling the existing inefficiencies of transportation of tools, equipment, and even people. Over 2018, empty trucks traveling accounted for 16% of total mileage used by just one US company and unscheduled vehicle or equipment repairs made up 65% of all maintenance costs.

    Businesses with huge logistical demands need better solutions than just traditional operations efficiency standards. Now that customer experience and satisfaction is tied so deeply in with shipping and delivery, new standards are required – and smart suppliers are looking to AI. A 2017 study among retailers revealed that 71% of those retailers surveyed found that sharing logistical data like shipment, order, and delivery data, among all departments, was an important step for their business.

    While AI steps into the service industry, its presence in the world of e-commerce is more symbiotic and stabilizing. With AI, retailers and manufacturers can have opportunities to aggregate data from all parts of operations, even past data, to help build better and longer lasting solutions. In more board terms, AI is able to predict market demand and shift to help recommend solutions for adjusting inventory and avoiding excess, passing efficiency on to the customer.

    When the success of a business hangs in the balance of consumer satisfaction, and consumer satisfaction lies within shipping and delivery quality, smart business leaders make proactive move to streamline operations. Learn more about how AI is making sustainability possible.

  • All of Our Customers Will Move to the Cloud, Says Oracle CEO

    All of Our Customers Will Move to the Cloud, Says Oracle CEO

    “We have a big existing on-premise user base and I believe all of them will move (to the cloud),” said Oracle CEO Mark Hurd. “In fact, I was with a large group of our users just last night and they’re all going to move on their time frame. We don’t put a time frame on it, but this thing is moving at a pretty good speed. It will not move linearly, it will move geometrically. When we get to a certain point you will start to see a geometric move in the market and it will be significant.”

    Mark Hurd, CEO of Oracle, discussed the huge growth in the cloud applications market and he expects Oracle to lead that market in an interview on Bloomberg:

    Cloud Applications Will Become a $400 Billion Market

    The apps market is about a $125 billion market. It has two pieces to it. First is back office, which is what we call ERP. This is basically your financial systems, procurement, manufacturing, supply chain, and HR. That is really 70 percent of the applications market or around $85 billion. Second is the front office market which includes marketing, sales automation, service, etc. add up to $40 billion. A very interesting phenomenon is that as the on-premise applications market moves into SAAS it actually grows exponentially. Now the applications market is doing all of the server work, all the operating systems, and all the database work. It’s the data center, it’s the people. So the market will actually grow from $125 billion and probably triple just as it moves to SAAS because it’s taking share from the other parts of the IT market. The applications market I predict will actually become more like $400 billion as it goes forward.

    We think it is an amazing opportunity. We are growing our applications market over the last 8-12 quarters more than double-digit. The market itself is growing and we are gaining substantive share. We are the leader in ERP. If you go back to Gartner, IDC, and the analysts we are leading in HR now as well. These are very attractive and robust markets. Our customers want to modernize, want to spend less, want someone else doing the work, and they want someone else assuming the risk. We are extremely bullish about our position in the market.

    All of Our Customers Will Move to the Cloud

    We have rewritten our application base for the cloud, for SAAS. We have been doing this for years and we’ve invested a lot of capital. We are deploying our capabilities all across the globe. We are extremely excited and bullish about not just our current position. There is going to be a leader in this market and there is no one today with more than 50 percent market share. In fact, the highest application percentage of any company in any segment is sort of mid-20s. This generation will see a leader that is much more material than that and I volunteer us to do it. In most segments, the leader has 50 percent plus.

    We have a big existing on-premise user base and I believe all of them will move to the cloud. In fact, I was with a large group of our users just last night and they’re all going to move. They are all going to move on their time frame. We don’t actually put an end of life. We have a competitor that does that, but we don’t do that. We want them to move at their pace and we want them to feel good about it. We don’t put a time frame on it, but this thing is moving at a pretty good speed. It will not move linearly, it will move geometrically. When we get to a certain point you will start to see a geometric move in the market and it will be significant.

    >> Watch the full Bloomberg interview with Oracle CEO Mark Hurd.

  • SAP CEO: We Out-Innovated Everybody

    SAP CEO: We Out-Innovated Everybody

    SAP announced the completion of its $8 billion acquisition of Qualtrics which brings critical real-time customer experience data to its customers. SAP CEO Bill McDermott explains how the combination of Qualtrics’ Experience Management (XM) Platform with SAP’s enterprise software and cloud services is not only a game changer for companies, but solidifies SAP as the world’s business software leader:

    “Where did we leave them in the dust? We basically out innovated everybody in terms of how you run your business better. Now the idea is how you create an unbelievable human experience so you inspire your people to take care of your customer and create a loyalty effect that’s unlike any other company in the industry. That’s what we do.”

    Bill McDermott, CEO of SAP, talks about how the integration of Qualtrics into SAPs enterprise solutions will help businesses know their customers with real-time sentiment analysis, in an interview with Fox Business at Davos 2019:

    With Qualtrics Your Brand Will Become a Religion

    I think it’s really important that you focus on the business of your customer and stay obsessed with that and not get caught up in a lot of tech jargon. That’s why I’m glad we’re the business software market leader.

    There is a huge trust deficit in the economy. Customers aren’t necessarily getting what they paid for which is why there is a $1.6 trillion deficit from customers that defect from companies that are out there in the marketplace today. So how do you keep a loyal customer? Today’s systems create operating data. You know your customers, you know your people, you know your suppliers. But we need to know what are consumers saying in real time, in the moment? We need that sentiment analysis.

    Qualtrics is the number one experience management company in the world. From now on, your customers, if you are CEO, will love your products. In fact, they will be obsessed with them. Your brand will become a religion because every employee is an ambassador that’s connected inextricably to the customer experience. That’s Qualtrics.

    If you are a customer of SAP, now you have all the experience data. I call this X-data. This is data from all the consumers that are experiencing your product and your brand. You combine that with the O-data which is all the operational aspects of how you run your company, from your demand all the way through to your supply. You know everything. You take X plus O and you have the winning formula.

    The Enterprise Has Been Redefined by SAP

    We surveyed, with Qualtrics and SAP, along with the World Economic Forum here, we surveyed 10,000 individuals on a random sample in 29 different countries. Once of the questions was, “What are you really worried about out there?” Most humans said we are worried about being replaced by robots. We said, “Is tech for good or is tech for bad?” What’s happening in your world with the perception of technology? They said, “A little bit better than negative, but somewhat ambivalent.” That’s a concern.

    They said that they are basically trusting the people that run their companies, even more than the people that run government. There is a trust deficit out there. It’s really important that we close that trust deficit at the leadership level. It’s also important that companies get the human experience going with their own employees and their customers. That’s why I think that this experience management positioning for SAP is fundamentally going to be a moment in time where the enterprise has been redefined by SAP.

    Over 77 percent of the world’s transactions run through an SAP system. We manage everything from the customer relationship to how you manage your people to how you build great products and how you ship on time and deliver. Now we have experience management which is the ultimate touchpoint for customers, and we put it all in the cloud. So you can be nimble, you can be agile, and you can upgrade quickly. You don’t need a whole lot of resources to maintain these systems. We are moving faster than anyone in 25 industries and in 193 countries around the world.

    About the S/4HANA Upgrade

    S/4HANA is now the system from the demand signal of your consumer in any channel including ecommerce. We know your consumer. We align the product in the proper configuration, at the proper price based on the customers history and all the loyalty that they should earn in their business with you. We ship. We take care of the whole supply chain. You get what you want at the price you procured for anyplace in real-time in the world. That whole value chain is SAP.

    4HANA is now in a cloud. So you can run your entire company from end-to-end on top of SAP’s 4HANA platform in the cloud. Game change. Again, I go back to, that’s all the operational data and all the operational processes. Now, if you can add experiences to this with Qualtrics you’ve got an unbeatable competitive advantage.

    I’m signing up customers left and right on this idea in Davos because this has been the number one thing that businesses have forgotten. You have to have the experience under control with your consumer and it has to be real-time sentiment analysis. Just think, it’s five times more expensive to get a new customer than to keep the one you have. Don’t you want to know how they’re doing?

    No Signs That There is This Global Slowdown

    We have a very strong business. There are no signs in our business that there is this global slowdown. Because we serve the best run businesses in the world we are usually an early indicator of what’s going on out there. We see a very optimistic future. Our pipelines and our business model have not changed one iota. I think there is this disjoint between the consumer companies and the consumer world and the enterprise.

    SAP CEO Bill McDermott: “We out innovated everybody.”
    SAP Bill McDermott: “No signs that there is this global slowdown.”


  • Digitizing Unilever is One of My Top Priorities, Says CEO

    Digitizing Unilever is One of My Top Priorities, Says CEO

    “Digitizing Unilever is one of my top priorities,” says Unilever’s new CEO Alan Jope. “How we digitize marketing. How we digitize working with our customers. Digitizing our supply chain. Digitizing our people processes. You are going to see a strong digital emphasis in my agenda for Unilever.”

    Alan Jope, CEO of Unilever, discussed Unilever’s growth in Asian markets and his priority to digitize the company in an interview on Bloomberg Markets and Finance this morning:

    Digitizing Unilever is One of My Top Priorities

    In China, all of our ecommerce partners are very important to us. That’s where a lot of the growth is. That’s because that’s where consumers are choosing to shop. That integration between ecommerce, search, social, and other digital platforms is also happening in the west. Digitizing Unilever is one of my top priorities. How we digitize marketing. How we digitize working with our customers. Digitizing our supply chain. Digitizing our people processes.

    You are going to see a strong digital emphasis in my agenda for Unilever. We are hiring people with good digital skills like crazy at the moment. We are bringing in digital natives and at the same time reskilling the Unilever team.

    China Has Become a Stable Part of Our Business

    China is a special place for me, I lived there for five years quite recently. I’m delighted to share that China has become a stable part of our business actually. We are seeing good growth year in and year out. Consumers are engaging with the type of brands we are selling and increasingly we are developing products in China for the Chinese market. In amongst all that volatility, it seems like the consumer products segment is one of the stable parts of the Chinese economy.

    We have a tremendous global footprint. We are very globally diversified. We are used to dealing with geopolitical shocks and movements. At the moment that is certainly not a significant impact on our business. We are seeing overall Asia doing very well. In particular Central Asia. The markets in India, Pakistan, and Bangladesh are really doing extremely well. As I mentioned China has been a stable source of growth. Also, that important part of the world where people are really moving into the consumer products markets Southeast Asia. We are starting to see a recovery led by our big business in Indonesia.

    https://youtu.be/dw8K4PF70_s


  • Booster Brings On-Demand Business Model to Gasoline

    Booster Brings On-Demand Business Model to Gasoline

    Imagine just clicking a button on an app and having your cars gas tank filled while you are working at the office. That’s what Booster Fuels is currently doing. Booster has brought the on-demand business model to fuel and it’s extremely popular in its launch markets of SF Bay, San Diego, and Dallas-Fort Worth areas. Booster Fuels co-founder and CEO Frank Maycroft says that they are selling over $180,000 per day in just those three markets and have plans to expand nationwide.

    Frank Maycroft, CEO and co-founder of Booster Fuels, talked about the companies business model and technology on CNBC:

    Push a Button for Same-Day Free Delivery Gasoline

    Amazon set a new expectation for retail. People want to push a button and get same-day free delivery. What we are able to do now is the same thing for gasoline. When you think about a gas station it hasn’t changed much in 50 years. The concept is really taking the old-world industry and leveraging mobile technology, machine learning technology to allow us to deliver gas to people without any of the inconvenience.

    We are the only company quietly roaming through parking lots looking for cars. The truck that does that has to fit within a single parking spot, has to maneuver as well as a small car, has to be connected to the cloud and communicating with all of the other mobile distributed gas stations in the Booster fleet.

    A Million Deliveries and $180,000 a Day in Revenue

    We’ve done more than a million deliveries company-wide and we will do about $180,000 of revenue in a single day. Anybody can make it so that you can push a button and get gas, but doing that in a way that doesn’t cost more than the gas station is incredibly hard. We didn’t want to have to build a subscription service. We didn’t want to have to charge fees. Our belief is service everyone by charging the same price and focus on where cars go all the time, parking lots.

    To really be inventive today you have to start from scratch with the context of what would this have looked like if you started it in the 21st Century? It’s hardware with embedded systems with software that’s communicating to the cloud, it’s procurement of fuel, it’s pricing to customers. When it all comes together that’s where the magic is.

    People Spend More on Gasoline Than They Do For All of Ecommerce.

    We like to be realists that when you look out your window there are gas-powered vehicles and that’s going to be here for a very long time. Let’s make them 3-5 percent better by improving the supply chain, reducing emissions, and reducing miles traveled.

    People spend more on gasoline than they do for all of ecommerce. People spend almost as much on gasoline as they do on groceries as a category. At the same time, we do look at alternative energy solutions. Nothing stops us from doing the same service for electric vehicles or other alternatives. It’s all based on the same technology investment, software, routing, logistics, that works for fuel.

    Nine out of ten Americans still drive to work and are either going to or coming from suburbs. Imagine ten years from now not having to think about gasoline or energy in general or things in general just getting to you where it’s most convenient for us to deliver to, most convenient for you to get it, and most cost-effective for the entire ecosystem. I think that is the way that the world is moving.

    How Booster Works:

  • Nokia CEO: 5G Will Launch in 2019 Starting in the US

    Nokia CEO: 5G Will Launch in 2019 Starting in the US

    Nokia CEO Rajeev Suri says that the company will start to launch 5G in 2019 and 2020 starting with the United States followed by Japan, South Korea, and China. He says that the rollouts have already begun with actual 5G launches next year.

    Rajeev Suri, President, and CEO of Nokia discussed the company’s 5G rollout on CNBC:

    5G Will Start to Launch in 2019 and 2020

    It is starting to really move. We expect that 5G will start to launch in 2019 and 2020. We are starting here in the US which is the first market, Japan, South Korea, and China will come next during 2019. The rollouts have already begun with 5G and the launches next year.

    We are a leader in the networks business and we acquired Alcatel-Lucent back in 2016. The first phase of the merger was all about elimination of duplication. Now we are in the second phase which is about optimizing the new company for lean as we get into 5G. There is some duplication, so we will cut legacy R&D, we will cut some real estate, overhead, and some areas in IT. So it’s still a little bit of duplication, elimination, and then optimization.

    We’ve Got Mitigation Plans Around Tariffs

    We have a global supply chain and we’ve got mitigation plans around what happens with the tariffs. Having said that, I don’t think we are seeing an issue on the demand side. We do see some issue on the cost side, but it’s not meaningful for us, not meaningful this year. It’s going to be a little bit of headwind next year but we know how to get through it.

  • SAP CEO: It’s All About the Customer Experience

    SAP CEO: It’s All About the Customer Experience

    SAP CEO Bill McDermott, in a wide-ranging interview with Bloomberg talked about enterprises moving to the cloud, competing with Oracle’s new autonomous database, competing with Salesforce, and its huge business in China:

    SAP Has Taken Over the Enterprise Database Market

    Do you have a major move to the cloud? If legacy companies haven’t fully invested themselves in the cloud where they’ve converted their revenue streams more to cloud than on-premise I think you will see them make bold moves to get cloud-ready. No choice, that’s where the customer wants us.

    We obviously have taken over the enterprise database market with HANA. HANA has many of the characteristics that you mentioned (referencing Oracle). HANA can take data from any source, everything that is either structured or unstructured and data from any source in the enterprise. HANA is running the biggest enterprises in the world now with 25,000 customers at mass scale. We like our HANA database very much.

    It’s All About the Customer Experience

    We see a fourth-generation of CRM where we go beyond the current market participants. Basically, they focus on sales, marketing campaigns, things that essentially take money out of the customers pocket. What we want to do is focus on an omnichannel ecommerce world where we connect the demand chain because our customers are social, mobile and on the run. They shop in every channel, direct to consumer, wholesale, retail. We want to connect that demand chain to the supply chain so that we have a complete end-to-end business.

    Why is this so important? We are not just talking about CRM, we are talking about customer experience. The way CEOs think about their brand, their products, their human capital, their customers. All of the people inside of the company have to be completely committed to the customers outside the company. This is what we call fourth-generation CRM. It’s all about the customer experience.

    We’d Like to See China and the US Cooperate

    The most important thing is that we get paid to run businesses and work in an environment where we let government do what government does. All government leaders have to do what’s best for their country and best for their constituents. These tariffs are obviously a serious situation. You have the two largest economies in the world with $30 trillion in combined economic firepower that right now are at a little bit at odds with each other.

    It’s good, as we saw in today’s tweet, it was stated that at the G20 President Xi and President Trump will sit down and talk. That’s very encouraging to the market. Markets like certainty. So certainly we would like to see China and the US cooperate. It’s good for supply chain, it’s good for business.

    China is Regarded as SAP’s Second Home

    Germain engineering is highly regarding in China, as it is in the United States and around the world, but we do particularly well in China. China is our fastest growing market. We think that China is easily regarded as SAP’s second home in terms of market receptivity, ecosystem growth in China, and our long-term prospects. We think China will end up being the biggest market in the world soon.

    We have the most sophisticated data privacy in the world. We acquired a company called Gigya where we have billions and billions of customer records. We protect your privacy, we don’t let customers actually engage you unless you agree that you want to opt-in on various offerings from our customers and they serve their customers. We follow the same reference architecture, the same high-security standards and cloud standards in China that we do in Europe, the United States, and every other theater in the world.

    We are very confident in China in the way enterprises can serve their customers in China with high-security standards. We recently announced a very important partnership with Alibaba and that is a cloud partnership that will not only impact our growth in one of the fastest growing regions in the world.

    We Are Very Diverse and Highly Inclusive

    We actually have appointed in the last 12 months two women to our Executive Board, not just because they are women, but because they are great leaders. That would be Adaire Fox-Martin and Jennifer Morgan. If you look at our company we have a third of our workforce that is female and we also have a third of our leaders that are female.

    We are very diverse and highly inclusive. One of the things we really enjoy is what we have done with Autism at Work and now we have dedicated one percent of our hiring to autistic folks, at least on the spectrum somewhere, to help our workforce be highly productive and diverse. That extends also to the solutions that we have. If you look at success factors, the number one human capital solution in the world, we have a business without bias mentality.

    Computers don’t have bias. In the way we build the algorithms in the software they eliminate bias from the hiring process. The computer doesn’t have a bias. It looks for the best candidates and it fills an algorithm or model that the company is trying to get at. If you want 40 percent of your workforce to be diverse and inclusive, the model is built to do that for you. You don’t leave it up to humans, you let the software do the work and then the human judgment comes in at the final phase of hiring. It’s changing companies everywhere.

  • Analyst: Services is the Linchpin For Apple to Reach a $1.5 Trillion Valuation

    Analyst: Services is the Linchpin For Apple to Reach a $1.5 Trillion Valuation

    The key to Apple’s success is to execute on China, execute on the iPhone and to continue to grow its services business according to Dan Ives, an analyst at Wedbush. Ives believes that the Apple services business when you look at the sum of its parts is undervalued and should add an additional half a billion dollars to Apple’s valuation over time.

    Dan Ives, Managing Director and Equity Analyst covering the Technology sector at Wedbush, talked about why they believe services growth at Apple will make the company worth $1.5 trillion:

    Services is the Linchpin For Apple

    In our opinion services is the linchpin. When you look at it from a sum of the parts, services, we think that business alone is about half a trillion, call it $450 billion dollars. That’s really what the street now is starting to reanalyze that and the multiple continues to expand. In our opinion, the iPhone product cycle continues to be there.

    It’s really about can they hit $50 billion (from services) in the next year and a half from a revenue perspective? With the sum of the parts, they’re able to do that and then you can start to justify that services business. When you add up the sum of the parts, the core iPhone business is worth about a trillion and then half a billion for the service.

    China is the Fuel in the Engine

    China is the fuel in the engine. Fundamentally, we don’t get to a trillion and a half (valuation) or even a stock that goes higher here if China is not a significant growth catalyst. We see about 60 or 70 million iPhones coming up for an upgrade cycle in China and we believe about 50 to 60 percent of those do get upgraded.

    I think without the services they’re a teenager in terms of where they’re gonna trade. I think the services business is how they start to get that re-rating from 20-22 times earning. That’s why right now for Cook and company it’s really about not making a bad strategic move on the content side or MNA. It’s really just executing on China, execute on the iPhone strategy, and services, that’s front and center.

    China is Also a Potential Pitfall

    A potential pitfall is China, just given what we’re seeing in terms with trade and tariffs. Can there be a supply chain disruption and really specifically, can consumers start to digest that higher price point with the lower competition?

  • Why Would I Want My Underpants Connected to the Internet?

    Why Would I Want My Underpants Connected to the Internet?

    There was a session at the recent GeekWire Summit on how the IoT explosion will impact retail stores where underpants were discussed. It’s humous but very illustrative of how every item in every store, electronic or not, will be tracked in order to provide personalized shopping experiences and to bring massive efficiencies to the supply chain.

    Below is a conversation with Hointer CEO Nadia Shouraboura and Impinj CEO Chris Diorio on the importance of all items, even underpants, being eventually connected to the internet:

    Hointer CEO Nadia Shouraboura – What is the Internet of Things?

    The Internet of Things is just one part of the puzzle and many things need to come together to make this puzzle happen. For example, in the retail space, product is very important, price is very important, but experience is very important too, so IOT is just one part of that puzzle.

    Impinj CEO Chris Diorio – Connect Every Item in the World

    Impinj builds products around a certain type of RFID technology called Rain for radio identification. Our vision is to connect every item in your everyday world to the Internet, everything. Every apparel item, every food item, just literally have connectivity for every item in the world. Impinj has connected more than 25 billion items to date and more than seven billion last year alone.

    We connect those items wirelessly and what we’re focused on delivering is for each item is its unique identity, its location, and its authenticity, and in so doing extending the reach of the Internet to everybody and to everyday items. For us, the Internet of Things truly means things, not just connectivity for powered electronic devices, but for everything, and in so doing bring benefits to industries and consumers.

    Impinj CEO Chris Diorio –   Connecting Underpants?

    When you go into the store and you want to find the ones that you want to buy in the right size and the right type if you’re like me you know exactly what you want to buy and when you go in the store you want it to be there. If it’s not there because the supply chain inefficiencies you’re probably not going to buy anything.

    Hointer CEO Nadia Shouraboura – IoT and Underpants

    The importance of IoT to underpants is to measure results and what IoT delivers in terms of results. One thing which is important when you think about Underpants is sex. To me, sex is defined by two metrics which is quantity and quality. What I discovered personally is, for example, IoT lights, beautiful lights.

    The experience is you come in and you’re tired and you don’t want to think about sex and suddenly the whole room turns to your mood in soft blue and it genuinely works. If you measure IoT devices and lights and its correlation with quantity and quality of sex in underpants there is a very strong correlation. That’s an example of the impact of IoT to your underpants.

    Impinj CEO Chris Diorio – Even Your Underpants

    There’s a retailer that we work within France that if you are a consumer and you walk into the store, there’s a kiosk you basically where you decide what you want and when you click the item within 90 seconds the item comes down in a little tube like they used to have in the banks. A little tube comes down with your little capsule with exactly what you want to buy. Just check it out right there just walk out of the store, even if it’s your underpants.

  • Cloudera CEO: How We Become the Next Oracle of the Future

    Cloudera CEO: How We Become the Next Oracle of the Future

    Last week, Cloudera and Hortonworks announced that the companies were merging to “create the world’s leading next-generation data platform provider, spanning multi-cloud, on-premises, and the Edge.” Cloudera CEO Tom Reilly says that providing technology to help manage the huge volume of data generated from the Internet of Things is where “Cloudera is going to compete and that’s how we become the next Oracle of the future. “

    Tom Reilly, CEO of Cloudera, discussed the Hortonworks merger and how they plan to become the next Oracle type company in an interview with Jim Cramer on Mad Money:

    This is a Wonderful Merger

    This is a wonderful merger. Basically, by bringing these two companies together we are creating immense shareholder value. Our plans are that by 2020, just around the corner, our combined company Cloudera plus Hortonworks will be greater than a billion dollars in annual revenues, will be greater than 20 percent year-over-year growth, and will have greater than 15% operating cash flow margins. The amount of shareholder value we will create by bringing us together is immense.

    Profitability of the combined company is our goal. This has been a rivalry that’s going on for nearly 10 years. We have been going at it really hard against each other and that has made us both better. Competition is wonderful, but now there’s a new set of competitors that we can combine ourselves to be a much stronger company at greater scale and we can take on a new set of competitors, and a lot of it are these cloud guys, where we are extremely well positioned to win in a different market.

    What Does Cloudera Do?

    Samsung Electronics, like all other manufacturers, are instrumenting and connecting the devices they create to the Internet. It’s called the Internet of Things. Every car, every cell phone, everything through a supply chain is being instrumented including autonomous vehicles. We sell technology for our customers to collect all that data and use machine learning and artificial intelligence to understand better how products are being used and to make them more efficient or to build autonomous vehicles. This is what we do. Cloudera and Hortonworks allow us to deliver an enterprise data cloud from the Edge where data comes from all the way to AI, getting insight out of that data.

    Merger is a Win-Win for Everyone

    This merger is a win-win for everyone. All of our customers are happy, all of our partners are happy, and yes our partner systems is going to get larger because Cloudera has some unique partnerships and relationships as does Hortonworks. Regarding our IBM partnership, Hortonworks and IBM have had a wonderful strategic partnership.

    The new Cloudera is going to embrace that partnership much like we Cloudera have had a wonderful relationship with Intel. Now we’re going to bring in the Hortonworks customer base and they’re going to get the benefits of our relationship with Intel. We intend this to be a win-win not only for our shareholders, our partners, our customers, and all of our employees.

    How We Become the Next Oracle

    A  lot of the excitement about this merger is people expect us to be the next Oracle. That doesn’t mean we’re replacing Oracle legacy business or their traditional business. No, the world is changing with this Internet of Things. Data is of much more volume and people want to do artificial intelligence machine learning against that data. That’s where we’re going to compete and that’s how we become the next Oracle of the future.

    The fact of the matter is Oracle is a good partner of ours. Oracle has resold Qatar our software for a long time and we’re excited about what Oracle is doing in the cloud and we intend to work with them there. Cloudera plus Hortonworks working together will be the only provider delivering our software across all the major cloud guys. We work on Amazon, Microsoft, Google, and the IBM cloud and that’s our value proposition, enterprises they can work across all the cloud providers.

  • CaaStle CEO: Our Clothing as a Service (CAAS) Technology is not Disruptive

    CaaStle CEO: Our Clothing as a Service (CAAS) Technology is not Disruptive

    The clothing as a service business model is not disruptive for clothing retailers says CaaStle founder and CEO Christine Hunsicker. “It’s completely accretive and one of the big things about this technology is that it’s not disruptive. It’s not a disruptive model that’s threatening their businesses.”

    CaaStle is a fully managed service that allows retailers to offer Clothing as a Service (CaaS) to their consumers. CaaS is an access model that they say has “transformative benefits” for retailers and consumers. CaaStle says it simply provides technology, reverse logistics and managed services to help retailers participate in the new economy.

    CaaStle founder and CEO, Christine Hunsicker, recently discussed her CaaStle and why clothing as a service is not a disruptive model threatening retailers:

    Enables Clothing Retailers to Rent Clothing on a Subscription Basis

    CaaStle is a fully managed service that allows any retailer to offer a rental subscription service to their customers using their inventory. We are completely behind the scenes and nobody knows we exist. We are the people building the front end consumer experience, we’re handling the logistics and were handling the technology and the algorithms. We just take the clothing and the consumer list from the retailer and make it all happen.

    What we found is that fundamentally consumers rent very differently than they buy, so most of the things that you buy, and if you think about your own wardrobe, are gonna be the basic core and the staples, things that you can get a lot of wear out of, and that makes sense from a cost per wear perspective.

    When you rent you tend to go more towards the fashion and the trend. For a company like Express or like Ann Taylor or like New York & Company they’re going to continue to sell just like they always have. What they’re doing now is increasing engagement with their brand and increasing that brand loyalty through renting more of the fashion pieces.

    Our Clothing as a Service (CAAS) Technology is not Disruptive

    It’s completely accretive and one of the big things about this technology is that it’s not disruptive. It’s not a disruptive model that’s threatening their businesses. Right now it’s an opportunity for these retailers to jump on board and increase the number of new consumers they have and increase the spend that consumers have with them. It’s a significantly more profitable business and has very high engagement rates.

    It’s everyday clothing. You can’t be concerned that you may snag it or tear it or spill something on it, there’s going to be some damage that happens. We want the consumers and the retailers want the consumers to be very relaxed and comfortable in the clothing. It’s actually part of the service fee, there’s no nickel and diming for extra insurance. It’s going to happen that occasionally the clothing comes back damaged, very rarely though.

    We get paid on a per consumer basis so we’re completely aligned with the retailer to help them grow their base and maintain their base and have very happy consumers.

    We’re Building this Company to Take it Public

    As far as the Eloquii acquisition ($100 million) by Walmart, they have this strategy with Mark Lore (Walmart CEO) and under Andy Dunn to bring in a bunch of brands and expand their consumer base. As far as straight retail goes you saw it with Bonobos and Eloquii and ModCloth, this is just another step in that in that path.

    I think it’s great for the plus-size consumer. I think it’s great for the Eloquii customer. They’re going to be able to leverage the Walmart supply chain and logistics and deliver a better experience probably at a lower cost point.

    When it comes to, do we want to be acquired? We’re building this company to take it public. We don’t want to be acquired by any single player largely because we believe in fragmentation. If you believe the industry has been fragmented and will remain fragmented and if you want to impact the tremendous part of the economy you need to be a platform underlying all of the brands and the retailers as opposed to being a singular consumer-facing brand.

  • Chinese People’s Liberation Army Implanted Malicious Microchips on Computer Servers Bound for U.S. Companies

    Chinese People’s Liberation Army Implanted Malicious Microchips on Computer Servers Bound for U.S. Companies

    An explosive Bloomberg Businessweek report details how China was able to pull off the most significant supply chain attack ever against American companies. Reportedly, China used third-party vendors to America companies, including Amazon and Apple, to insert a tiny microchip, no bigger than a grain of rice, onto motherboards for Supermicro. Amazon Web Services (AWS), reviewed these servers and found “troubling issues.”

    “Nested on the servers’ motherboards, the testers found a tiny microchip, not much bigger than a grain of rice, that wasn’t part of the boards’ original design. Amazon reported the discovery to U.S. authorities, sending a shudder through the intelligence community. Elemental’s servers could be found in Department of Defense data centers, the CIA’s drone operations, and the onboard networks of Navy warships. And Elemental was just one of hundreds of Supermicro customers.

    During the ensuing top-secret probe, which remains open more than three years later, investigators determined that the chips allowed the attackers to create a stealth doorway into any network that included the altered machines. Multiple people familiar with the matter say investigators found that the chips had been inserted at factories run by manufacturing subcontractors in China.”

    Bloomberg Businessweek reporter Jordan Robertson who co-wrote this blockbuster story talked about it on Bloomberg TV:

    The basic gist of this story is that in 2014 and 2015 a unit of China’s People’s Liberation Army implanted malicious microchips on computer servers bound for U.S. companies. Those computer servers wound up in very targeted, very large companies including Apple and Amazon.

    What these malicious chips did was compromise the software on these hardware devices at the kind of level that you can’t detect, in many ways the ultimate silent attack. This was a very major discovery for these companies and for U.S. intelligent services.

    This story has taken us well over a year to report and write and a lot of that is learning what is a hardware attack? It’s such science fiction in many ways to us as reporters and to the public at large. A hardware attack is simply the most effective type of computer hacking that any organization can engineer. The reason is if the hardware of the computer is compromised it will irrevocably compromise the software that sits on top of it.

    There is no commercial security system that can detect that kind of manipulation. It’s a super serious attack that is almost impossible to detect without physical examination of the hardware which almost no one does.