DREAMTECH NEWS

HP offers its investors billions in shareholder returns to avoid a Xerox tie-up

To ward off a hostile takeover bid by Xerox, which is a much smaller company, HP (not to be confused with Hewlett Packard Enterprise, a separate public company) is promising its investors billions and billions of dollars.

All investors have to do to get the goods is reject the Xerox deal.

In a letter to investors, HP called Xerox’s offer a “flawed value exchange” that would lead to an “irresponsible capital structure” that was being sold on “overstated synergies.” Here’s what HP is promising its owners if they do allow it to stay independent:

  • About $16 billion worth of “capital return” between its fiscal 2020 and fiscal 2022 (HP’s Q1 fiscal 2020 wrapped January 31, 2020, for reference). According to the company, the figure “represents approximately 50% of HP’s current market capitalization.” TechCrunch rates that as true, before the company’s share-price gains posted after this news became known.
  • That capital return would be made up of a few things, including boosting the company’s share repurchase program to $15 billion (up from $5 billion, previously). More specifically, HP intends to “repurchase of at least $8 billion of HP shares over 12 months” after its fiscal 2020 meeting. The company also intends to raise its “target long-term return of capital to 100% of free cash flow generation,” allowing for the share purchases and a rising dividend payout (“HP intends to maintain dividend per share growth at least in line with earnings.”)

If all that read like a foreign language, let’s untangle it a bit. What HP is telling investors is that it intends to use all of the cash it generates to reward their ownership of shares in its business. This will come in the form of buybacks (concentrating future earnings on fewer shares, raising the value of held equity) and dividends (rising payouts to owners as HP itself makes more money), powered in part by cost-cutting (boosting cash generation and profitability).

HP is saying, in effect: Please do not sell us to Xerox; if you do not, we will do all that we can to make you money. 

Shares of HP are up 6% as of the time of writing, raising the value of HP’s consumer-focused spinout to just under $34 billion. We’ll see what investors choose for the company. But now, how did we get here?

The road to today

You may ask yourself, how did we get here (to paraphrase Talking Heads). It all began last Fall when Xerox made it known that it wanted to merge with HP, offering in the range of $27 billion to buy the much larger company. As we wrote at the time:

What’s odd about this particular deal is that HP is the company with a much larger market cap of $29 billion, while Xerox is just a tad over $8 billion. The canary is eating the cat here.

HP never liked the idea of the hostile takeover attempt and the gloves quickly came off as the two companies wrangled publicly with one another, culminating with HP’s board unanimously rejecting Xerox’s offer. It called the financial underpinnings of the deal “highly conditional and uncertain.” HP also was unhappy with the aggressive nature of the offer, writing that Xerox was, “intent on forcing a potential combination on opportunistic terms and without providing adequate information.”

Just one day later, Xerox responded, saying it would take the bid directly to HP shareholders in an attempt to by-pass the board of directors, writing in yet another public letter, “We plan to engage directly with HP shareholders to solicit their support in urging the HP Board to do the right thing and pursue this compelling opportunity.”

In January, the shenanigans continued when Xerox announced it was putting forth a friendly slate of candidates for the HP board to replace the ones that had rejected the earlier Xerox offer. And more recently, in an attempt to convince shareholders to vote in favor of the deal, Xerox sweetened the deal to $34 billion or $24 a share.

Xerox wrote that it had on-going conversations with large HP shareholders, and this might have gotten HP’s attention— hence the most recent offer on its part to make an offer to shareholders that would be hard to refuse. The company’s next shareholder meeting is taking place on April 1, 2020, and it won’t be an April Fool’s joke when we find out the final reckoning.

 


By Alex Wilhelm

CircleCI-AWS GovCloud partnership aims to bring modern development to U.S. government

Much like private businesses, the United States government is in the process of moving workloads to the cloud, and facing a similar set of challenges. Today, CircleCI, the continuous delivery developer service, announced a partnership with AWS GovCloud to help federal government entities using AWS’s government platform to modernize their applications development workflows.

“What this means is that it allows us to run our server offering, which is our on-prem offering, and our government customers can run that on dedicated pure cloud resource [on AWS GovCloud],” CircleCI CEO Jim Rose told TechCrunch.

GovCloud is a dedicated, single tenant cloud platform that lets government entities build FedRAMP-compliant secure cloud solutions (other cloud vendors have similar offerings). FedRAMP is a set of government cloud security standards any cloud vendor has to meet to work with the federal government

CircleCI builds modern continuous delivery/continuous integration (CI/CD) pipelines for development teams pushing changes to the application in a rapid change cycle.

“What GovCloud allows us to do is now provide that same level of security and service for government customers that wanted us to do so in an on prem environment in a dedicated single tenant environment [in the cloud],” Rose explained.

While there are a number of steps involved in building cloud applications, Rose said they are sticking to their core strength around building continuous delivery pipelines. As he says, if you have a legacy mainframe application that changes once every year or two, using CircleCI wouldn’t make sense, but as you begin to modernize, that’s where his company could help.

“[CircleCi comes into play] when you get into more modern cloud applications that are changing in some cases hundreds of times a day, and the sources of change for those applications is getting really diverse and managing that is becoming more complex,” Rose said.

This partnership could involve working directly with an agency, as it has done with the Small Business Administration (SBA), or it might involve a systems integrator, or even AWS, inviting them to be part of a larger RFP.

Rose says he realizes that working with the government can sometimes be controversial. Companies from Chef to Salesforce to Google, have run afoul with employees, who don’t want to work with certain agencies like DoD or ICE. He says his company has tended to focus on areas where agencies are looking to improve citizen interactions, and steered away from other areas.

“From our perspective, given that we’re not super involved in a lot of those areas, but we want to get in front of it, both commercially, as well as on the government side, and determine what falls within the fence line and what’s outside of it,” he said.


By Ron Miller

Databricks makes bringing data into its ‘lakehouse’ easier

Databricks today announced that launch of its new Data Ingestion Network of partners and the launch of its Databricks Ingest service. The idea here is to make it easier for businesses to combine the best of data warehouses and data lakes into a single platform — a concept Databricks likes to call ‘lakehouse.’

At the core of the company’s lakehouse is Delta Lake, Databricks’ Linux Foundation-managed open-source project that brings a new storage layer to data lakes that helps users manage the lifecycle of their data and ensures data quality through schema enforcement, log records and more. Databricks users can now work with the first five partners in the Ingestion Network — Fivetran, Qlik, Infoworks, StreamSets, Syncsort — to automatically load their data into Delta Lake. To ingest data from these partners, Databricks customers don’t have to set up any triggers or schedules — instead, data automatically flows into Delta Lake.

“Until now, companies have been forced to split up their data into traditional structured data and big data, and use them separately for BI and ML use cases. This results in siloed data in data lakes and data warehouses, slow processing and partial results that are too delayed or too incomplete to be effectively utilized,” says Ali Ghodsi, co-founder and CEO of Databricks. “This is one of the many drivers behind the shift to a Lakehouse paradigm, which aspires to combine the reliability of data warehouses with the scale of data lakes to support every kind of use case. In order for this architecture to work well, it needs to be easy for every type of data to be pulled in. Databricks Ingest is an important step in making that possible.”

Databricks VP or Product Marketing Bharath Gowda also tells me that this will make it easier for businesses to perform analytics on their most recent data and hence be more responsive when new information comes in. He also noted that users will be able to better leverage their structured and unstructured data for building better machine learning models, as well as to perform more traditional analytics on all of their data instead of just a small slice that’s available in their data warehouse.

 


By Frederic Lardinois

Lightspeed leads Laiye’s $42M round to bet on Chinese enterprise IT

Laiye, a Chinese startup that offers robotic process automation services to several major tech firms in the nation and government agencies, has raised $42 million in a new funding round as it looks to scale its business.

The new financing round, Series C, was co-led by Lightspeed Venture Partners and Lightspeed China Partners. Cathay Innovation, which led the startup’s Series B+ round and Wu Capital, which led the Series B round, also participated in the new round.

China has been the hub for some of the cheapest labor in the world. But in recent years, a number of companies and government agencies have started to improve their efficiency with the help of technology.

That’s where Laiye comes into play. Robotic process automation (RPA) allows software to mimic several human behaviors such as keyboard strokes and mouse clicks.

“For instance, a number of banks did not previously offer APIs, so humans had to sign in and fetch the data and then feed it into some other software. Processes like these could be automated by our platform,” said Arvid Wang, co-founder and co-chief executive of Laiye, in an interview with TechCrunch.

The four-and-a-half-year-old startup, which has raised more than $100 million to date, will use the fresh capital to hire talent from across the globe and expand its services. “We believe robotic process automation will achieve its full potential when it combines AI and the best human talent,” he said.

Laiye’s announcement today comes as the market for robotic automation process is still in nascent stage in China. There are a handful of startups looking into this space, but Laiye, which counts Microsoft as an investor, and Sequoia-backed UiPath are the two clear leaders in the market currently.

As my colleague Rita Liao wrote last year, it was only recently that some entrepreneurs and investors in China started to shift their attention from consumer-facing products to business applications.

Globally, RPA has emerged as the fastest growing market in enterprise space. A Gartner report found last year that RPA market grew over 63% in 2018. Recent surveys have shown that most enterprises in China today are also showing interest in enhancing their RPA projects and AI capabilities.

Laiye today has more than 200 partners and more than 200,000 developers have registered to use its multilingual UiBot RPA platform. UiBot enables integration with Laiye’s native and third-party AI capabilities such as natural language processing, optical character recognition, computer vision, chatbot and machine learning.

“We are very bullish on China, and the opportunities there are massive,” said Lightspeed partner Amy Wu in an interview. “Laiye is doing phenomenally there, and with this new fundraise, they can look to expand globally,” she said.


By Manish Singh

DSP Concepts raises $14.5M for its Audio Weaver platform

DSP Concepts — a startup whose Audio Weaver software is used by companies as varied as Tesla, Porsche, GoPro and Braun Audio — is announcing that it’s raised $14.5 million in Series B funding.

The startup goal, as explained to me by CEO Chin Beckmann and CTO Paul Beckmann (yep, they’re a husband-and-wife founding team), is to create the standard framework that companies use to develop their audio processing software.

To that end, Chin told me they were “picky about who we wanted on the B round, we wanted it to represent the support and endorsement of the industry.”

So the round was led by Taiwania Capital, but it also includes investments from the strategic arms of DSP Concepts’ industry partners — BMW i Ventures (which led the Series A), the Sony Innovation Growth Fund by Innovation Growth Ventures, MediaTek Ventures, Porsche Ventures and the ARM IoT Fund.

Paul said Audio Weaver started out as the “secret weapon” of the Beckmanns’ consulting business, which he could use to “whip out” the results of an audio engineering project. At a certain point, consulting customers started asking him, “Hey, how about you teach me how to use that?” so they decided to launch a startup focused on the Audio Weaver platform.

Audio Weaver - AWE Designer

Paul described the software as a “graphical block diagram editor.” Basically, it provides a way for audio engineers to combine and customize different software modules for audio processing.

“Audio is still in the Stone Ages compared to other industries,” he said. “Suppose you’re building a product with a touchscreen — are you going write the graphics from scratch or use a framework like Qt?”

Similarly, he suggested that while many audio engineers are still “down in the weeds writing code,” they can take advantage of Audio Weaver’s graphical interface to piece everything together, as well as the company’s “hundreds of different modules — pre-written, pre-tested, pre-optimized functions to build up your system.”

For example, Paul said that by using the Audio Weaver platform, DSP Concepts engineers could test out “hundreds out ideas” for algorithms that for reducing wind noise in the footage captured by GoPro cameras, then ultimately “handed the algorithms over to GoPro,” whose team could them plug the algorithms into their software and modify it themselves.

The Beckmanns said the company also works closely with chip manufacturers to ensure that audio software will work properly on any device powered by a given chipset.

Other modules include TalkTo, which is designed to give voice assistants like Alexa “super-hearing,” so that they can still isolate voice commands and cancel out all the other noise in loud environments, even rock concerts. (You can watch a TalkTo demo in the video below.)

DSP Concepts has now raised more than $25 million in total funding.

 


By Anthony Ha

ChartHop grabs $5M seed led by a16z to automate the org chart

ChartHop, a startup that aims to modernize and automate the organizational chart, announced a $5 million seed investment today led by Andreessen Horowitz.

A big crowd of other investors also participated including Abstract Ventures, the a16z Cultural Leadership Fund, CoFound, Cowboy Ventures, Flybridge Capital, Shrug Capital, Work Life Ventures and a number of unnamed individual investors, as well.

Founder, CEO and CTO, Ian White says that at previous jobs including as CTO and co-founder at Sailthru, he found himself frustrated by the available tools for organizational planning, something that he says every company needs to get a grip on.

White did what any good entrepreneur would do. He left his previous job and spent the last couple of years building the kind of software he felt was missing in the market. “ChartHop is the first org management platform. It’s really a new type of HR software that brings all the different people data together in one place, so that companies can plan, analyze and visualize their organizations in a completely new way,” White told TechCrunch.

While he acknowledges that among his early customers, the Head of HR is a core user, White doesn’t see this as purely an HR issue. “It’s a problem for any executive, leader or manager in any organization that’s growing and trying to plan what the organization is going to look like more strategically,” he explained.

Lead investor at a16z David Ulevitch, also sees this kind of planning as essential to any organization. “How you structure and grow your organization has a tremendous amount of influence on how your company operates. This sounds so obvious, and yet most organizations don’t act thoughtfully when it comes to organizational planning and design,” Ulevitch wrote in a blog post announcing the investment.

The way it works is that out of the box it connects to 15 or 20 standard types of company systems like BambooHR, Carta, ADP and Workday, and based on this information it can build an organizational chart. The company can then slice and dice the data by department, open recs, gender, salary, geography and so forth. There is also a detailed reporting component that gives companies insight into the current makeup and future state of the organization.

The visual org chart itself is set up so that you can scrub through time to see how your company has changed. He says that while it is designed to hide sensitive information like salaries, he does see it as a way of helping employees across the organization understand where they fit and how they relate to other people they might not even know because the size of the company makes that impossible.

ChartHop org chart organized by gender. Screenshot: ChartHop

White says that he has dozens of customers already, who are paying ChartHop by the employee on a subscription basis. While his target market is companies with more than 100 employees, at some point he may offer a version for early-stage startups who could benefit from this type of planning, and could then have a complete history of the organization over the life of the company.

Today, the company has 9 employees, and he only began hiring in the fall when this seed money came through. He expects to double that number in the next year.


By Ron Miller

Thomas Kurian on his first year as Google Cloud CEO

“Yes.”

That was Google Cloud CEO Thomas Kurian’s simple answer when I asked if he thought he’d achieved what he set out to do in his first year.

A year ago, he took the helm of Google’s cloud operations — which includes G Suite — and set about giving the organization a sharpened focus by expanding on a strategy his predecessor Diane Greene first set during her tenure.

It’s no secret that Kurian, with his background at Oracle, immediately put the entire Google Cloud operation on a course to focus on enterprise customers, with an emphasis on a number of key verticals.

So it’s no surprise, then, that the first highlight Kurian cited is that Google Cloud expanded its feature lineup with important capabilities that were previously missing. “When we look at what we’ve done this last year, first is maturing our products,” he said. “We’ve opened up many markets for our products because we’ve matured the core capabilities in the product. We’ve added things like compliance requirements. We’ve added support for many enterprise things like SAP and VMware and Oracle and a number of enterprise solutions.” Thanks to this, he stressed, analyst firms like Gartner and Forrester now rank Google Cloud “neck-and-neck with the other two players that everybody compares us to.”

If Google Cloud’s previous record made anything clear, though, it’s that technical know-how and great features aren’t enough. One of the first actions Kurian took was to expand the company’s sales team to resemble an organization that looked a bit more like that of a traditional enterprise company. “We were able to specialize our sales teams by industry — added talent into the sales organization and scaled up the sales force very, very significantly — and I think you’re starting to see those results. Not only did we increase the number of people, but our productivity improved as well as the sales organization, so all of that was good.”

He also cited Google’s partner business as a reason for its overall growth. Partner influence revenue increased by about 200% in 2019, and its partners brought in 13 times more new customers in 2019 when compared to the previous year.


By Frederic Lardinois

Google Cloud opens its Seoul region

Google Cloud today announced that its new Seoul region, its first in Korea, is now open for business. The region, which it first talked about last April, will feature three availability zones and support for virtually all of Google Cloud’s standard service, ranging from Compute Engine to BigQuery, Bigtable and Cloud Spanner.

With this, Google Cloud now has a presence in 16 countries and offers 21 regions with a total of 64 zones. The Seoul region (with the memorable name of asia-northeast3) will complement Google’s other regions in the area, including two in Japan, as well as regions in Hong Kong and Taiwan, but the obvious focus here is on serving Korean companies with low-latency access to its cloud services.

“As South Korea’s largest gaming company, we’re partnering with Google Cloud for game development, infrastructure management, and to infuse our operations with business intelligence,” said Chang-Whan Sul, the CTO of Netmarble. “Google Cloud’s region in Seoul reinforces its commitment to the region and we welcome the opportunities this initiative offers our business.”

Over the course of this year, Google Cloud also plans to open more zones and regions in Salt Lake City, Las Vegas and Jakarta, Indonesia.


By Frederic Lardinois

SentinelOne raises $200M at a $1.1B valuation to expand its AI-based endpoint security platform

As cybercrime continues to evolve and expand, a startup that is building a business focused on endpoint security has raised a big round of funding. SentinelOne — which provides a machine learning-based solution for monitoring and securing laptops, phones, containerised applications and the many other devices and services connected to a network — has picked up $200 million, a Series E round of funding that it says catapults its valuation to $1.1 billion.

The funding is notable not just for its size but for its velocity: it comes just eight months after SentinelOne announced a Series D of $120 million, which at the time valued the company around $500 million. In other words, the company has more than doubled its valuation in less than a year — a sign of the cybersecurity times.

This latest round is being led by Insight Partners, with Tiger Global Management, Qualcomm Ventures LLC, Vista Public Strategies of Vista Equity Partners, Third Point Ventures, and other undisclosed previous investors all participating.

Tomer Weingarten, CEO and co-founder of the company, said in an interview that while this round gives SentinelOne the flexibility to remain in “startup” mode (privately funded) for some time — especially since it came so quickly on the heels of the previous large round — an IPO “would be the next logical step” for the company. “But we’re not in any rush,” he added. “We have one to two years of growth left as a private company.”

While cybercrime is proving to be a very expensive business (or very lucrative, I guess, depending on which side of the equation you sit on), it has also meant that the market for cybersecurity has significantly expanded.

Endpoint security, the area where SentinelOne concentrates its efforts, last year was estimated to be around an $8 billion market, and analysts project that it could be worth as much as $18.4 billion by 2024.

Driving it is the single biggest trend that has changed the world of work in the last decade. Everyone — whether a road warrior or a desk-based administrator or strategist, a contractor or full-time employee, a front-line sales assistant or back-end engineer or executive — is now connected to the company network, often with more than one device. And that’s before you consider the various other “endpoints” that might be connected to a network, including machines, containers and more. The result is a spaghetti of a problem. One survey from LogMeIn, disconcertingly, even found that some 30% of IT managers couldn’t identify just how many endpoints they managed.

“The proliferation of devices and the expanding network are the biggest issues today,” said Weingarten. “The landscape is expanding and it is getting very hard to monitor not just what your network looks like but what your attackers are looking for.”

This is where an AI-based solution like SentinelOne’s comes into play. The company has roots in the Israeli cyberintelligence community but is based out of Mountain View, and its platform is built around the idea of working automatically not just to detect endpoints and their vulnerabilities, but to apply behavioral models, and various modes of protection, detection and response in one go — in a product that it calls its Singularity Platform that works across the entire edge of the network.

“We are seeing more automated and real-time attacks that themselves are using more machine learning,” Weingarten said. “That translates to the fact that you need defence that moves in real time as with as much automation as possible.”

SentinelOne is by no means the only company working in the space of endpoint protection. Others in the space include Microsoft, CrowdStrike, Kaspersky, McAfee, Symantec and many others.

But nonetheless, its product has seen strong uptake to date. It currently has some 3,500 customers, including three of the biggest companies in the world, and “hundreds” from the global 2,000 enterprises, with what it says has been 113% year-on-year new bookings growth, revenue growth of 104% year-on-year, and 150% growth year-on-year in transactions over $2 million. It has 500 employees today and plans to hire up to 700 by the end of this year.

One of the key differentiators is the focus on using AI, and using it at scale to help mitigate an increasingly complex threat landscape, to take endpoint security to the next level.

“Competition in the endpoint market has cleared with a select few exhibiting the necessary vision and technology to flourish in an increasingly volatile threat landscape,” said Teddie Wardi, MD of Insight Partners, in a statement. “As evidenced by our ongoing financial commitment to SentinelOne along with the resources of Insight Onsite, our business strategy and ScaleUp division, we are confident that SentinelOne has an enormous opportunity to be a market leader in the cybersecurity space.”

Weingarten said that SentinelOne “gets approached every year” to be acquired, although he didn’t name any names. Nevertheless, that also points to the bigger consolidation trend that will be interesting to watch as the company grows. SentinelOne has never made an acquisition to date, but it’s hard to ignore that, as the company to expand its products and features, that it might tap into the wider market to bring in other kinds of technology into its stack.

“There are definitely a lot of security companies out there,” Weingarten noted. “Those that serve a very specific market are the targets for consolidation.”


By Ingrid Lunden

Google Cloud acquires mainframe migration service Cornerstone

Google today announced that it has acquired Cornerstone, a Dutch company that specializes in helping enterprise migrate their legacy workloads from mainframes to public clouds. Cornerstone, which provides very hands-on migration assistance, will form the basis of Google Cloud’s mainframe-to-GCP solutions.

This move is very much in line with Google Cloud’s overall enterprise strategy, which focuses on helping existing enterprises move their legacy workloads into the cloud (and start new projects as cloud-native solutions from the get-go).

“This is one more example of how Google Cloud is helping enterprise customers modernize their infrastructure and applications as they transition to the cloud,” said John Jester, VP of Customer Experience at Google Cloud. “We’ve been making great strides to better serve enterprise customers, including introducing Premium Support, better aligning our Customer Success organization, simplifying our commercial contracting process to make it easier to do business with Google Cloud, and expanding our partner relationships.”

A lot of businesses still rely on their mainframes to power mission-critical workloads. Moving them to the cloud is often a very complex undertaking, which is where Cornerstone and similar vendors come in. It doesn’t help that a lot of these mainframe applications were written in Cobol, PL/1 or assembly. Cornerstone’s technology can automatically break these processes down into cloud-native services that are then managed within a containerized environment. It can also migrate databases as needed.

It’s worth noting that Google Cloud also recently introduced support for IBM Power Systems in its cloud. This, too, was a move to help enterprises move their legacy systems into the cloud. With Cornerstone, Google Cloud adds yet another layer on top of this by providing even more hands-on migration assistance for users who want to slowly modernize their overall stack without having to re-architect all of their legacy applications.

 


By Frederic Lardinois