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From: Glenn Petersen12/23/2018 9:39:07 AM
   of 1597
Inside the Nasty Battle to Stop Amazon From Winning the Pentagon’s Cloud Contract

Conspiratorial dossier and social media target Amazon, defense officials, trade groups.

By Naomi Nix
December 20, 2018

Illustration: Steph Davidson; Photos: Getty Images

A salacious dossier, a mystery client with an alias, dueling allegations of sexual misconduct.

They’re all part of the dirty-tricks campaigns unleashed over the last 10 months as some of the U.S.’s technology giants battle to win a $10 billion cloud-computing contract that the Pentagon plans to award to a single company.

Allegations of a corrupt procurement process have been directed at Pentagon officials and company managers, primarily at Inc., the front-runner for the contract, which involves transitioning massive amounts of Defense Department data to a commercially operated cloud system. Microsoft Corp., International Business Machines Corp. and Oracle Corp. are the biggest names jockeying against Amazon, though there’s no evidence they are behind the mudslinging.

Those companies do, however, vigorously oppose the Pentagon’s winner-take-all approach, arguing that it will amplify security risks and lock the agency into a single technology provider for many years.

One Oracle critic, Price Floyd, a former Pentagon spokesman who has been an Amazon consultant, says he sees the hand of the Redwood Shores, California, company, with millions of dollars’ worth of defense business on the line, behind the 33-page anti-Amazon dossier circulating in Washington. Kenneth Glueck, the senior vice president who oversees Oracle’s government relations in Washington, wouldn’t respond to the allegation but said the company’s interest is in competing for the contract “with the best, next-generation cloud technology at the best price.”

Oracle filed suit Dec. 6 in federal court in hopes of upending the Pentagon’s plans. The company three weeks earlier lost a similar challenge at the U.S. Government Accountability Office, which referees federal contract disputes. The watchdog agency on Dec. 11 also dismissed a protest by IBM because the dispute is now pending in court.

Read more: Amazon Seen With Edge as Pentagon Goes Winner-Take-All on Cloud

Bitter contracting fights are nothing new in Washington, yet they rarely sink to the level of personal innuendo and nastiness that have colored the cloud-computing competition. Companies such as Lockheed Martin Corp. and Boeing Co. have been known to vie for a multibillion-dollar contract one month and bid together the next.

Not this time. One version of the dossier, which was obtained by Bloomberg, suggests that corporate executives, including one at Amazon, engaged in improper personal relationships and that Defense Department officials participated in shady activities, all of which gave Amazon an edge.

The document relies on photos, charts and public records in an attempt to portray a web of conflicts to cast doubt on the integrity of the cloud procurement. It does contain certain accurate information regarding connections between industry executives and Defense Department officials, but offers no real proof that those relationships corrupted the process.

The dossier, for example, implies that Sally Donnelly, a top aide to Defense Secretary Jim Mattis, unfairly shaped the contract in favor of Amazon Web Services, the Seattle company’s cloud unit. AWS had been a client of Donnelly’s at a company she owned but sold just before she went to work for Mattis.

Donnelly’s lawyer, Michael Levy, said she had nothing to do with the contract. “She played no role, and exercised no influence, in connection with any government contract, including — as the Department of Defense has confirmed repeatedly — the JEDI contract,” Levy said.

A page from one version of the dossier of allegations.

The document was shopped around by RosettiStarr, a Bethesda, Maryland-based private-investigations company, according to Nextgov, a government information-technology website owned by Atlantic Media Co. An article posted on the Nextgov website in August said RosettiStarr declined to reveal who paid for the dossier’s compilation. RosettiStarr didn’t respond to Bloomberg requests for comment or a copy of the dossier.

Some of the allegations verge on the preposterous, suggesting, for example, that an Amazon executive’s son's Facebook friendship with the entrepreneur who bought Donnelly’s company constitutes evidence of corruption.

“I have been in and around this market for 30 years,” said Stan Soloway, who was a deputy undersecretary of defense under President Bill Clinton and is now president of a Washington-area consulting firm, Celero Strategies. Having read news articles about the document, he said: “I’ve never seen anything like this dossier, these allegations and all these rumors.”

US Defense Secretary James Mattis (right) gestures to senior adviser Sally Donnelly as they arrive by helicopter in Kabul, Afghanistan, on April 24, 2017.
Photographer: Jonathan Ernst/AFP via Getty Images

A spokesman for Amazon Web Services denied the company had an unfair advantage. “We don’t comment on rumors or speculation,” a Microsoft spokeswoman said. IBM declined to comment.

Pentagon spokeswoman Heather Babb said in a statement that the procurement “has been open and transparent, and followed a thorough, data-driven process involving robust industry feedback.” Babb also said Donnelly wasn’t involved at all and that “no vendors have been pre-selected.”

The nastiness began months before the Defense Department had even released the final solicitation for the contract in July with a name evoking “Star Wars”: The Joint Enterprise Defense Infrastructure cloud, or JEDI.

Floyd, the Oracle critic who was an executive at Donnelly’s firm, SBD Advisors, started fielding questions from reporters about the dossier in the spring and concluded that someone was waging an undercover campaign. It seemed the goal was to show that Donnelly and her firm somehow had rigged the cloud contract for Amazon, Floyd said. And at first glance, their role might raise questions.

From January 2017 to February 2018, Donnelly was one of Mattis’s most-trusted advisers. She previously had run the Washington office for the U.S. Central Command when Mattis ran Centcom in the Barack Obama administration. Her associate at SBD Advisors, Anthony DeMartino, joined her at the Pentagon. Both disclosed that SBD had been a paid consultant to Amazon. They helped craft messaging and marketing strategies in 2016 for potential Defense Department cloud-computing deals, Floyd said. DeMartino declined to comment.

Seven months into Donnelly’s 13-month tenure at the Pentagon, Mattis visited Amazon’s Seattle headquarters, where he met with Chief Executive Officer Jeff Bezos.

Three months later, the Pentagon indicated that it wanted its massive cloud contract to go to a single company. And once the formal solicitation appeared, it contained technical capabilities that only Amazon had achieved, such as having clearance to host secret data within six months of receiving the award.

But the dossier skips or plays down important facts, and misconstrues others. It assumes, for example, that Donnelly still had a stake in her company when she went to work for Mattis, based on her financial disclosure form showing she had received partial payment for it. After subsequently receiving additional payments, she updated her disclosure form to reflect that. Donnelly also reported her past work for Amazon. She has now left the Pentagon and started a new consulting firm in Washington.

Because of their previous Amazon work, Donnelly and DeMartino would have needed conflict-of-interest waivers if they were going to be involved in decision-making on the JEDI procurement. They didn’t seek waivers, according to the Pentagon. Since Donnelly wasn’t involved in the project, her lawyer said, she never felt the need for a waiver.

Jeff Bezos, Amazon’s chief executive officer and founder, participates in a discussion during a Milestone Celebration dinner on Sept. 13, 2018 in Washington.
Photographer: Alex Wong/Getty Images

The dossier also leaves out that Amazon had already won a $600 million cloud contract from the Central Intelligence Agency in 2013, showing that the Seattle-based company can manage and keep secure sensitive government data.

The dossier further alleges a romantic relationship between one of Amazon Web Services’ Washington executives and an executive at London-based C5 Capital Ltd., a private-equity firm that has co-invested with Amazon in projects in the U.S. and the Middle East.

In March 2018, the document shows, a C5 portfolio company bought Donnelly’s company, now called ITC Global Advisors, from an investor, Win Sheridan, a Washington, D.C.-area entrepreneur who originally acquired the company a year earlier. The intended implication appears to be that the first purchase was made by a straw buyer to allow Donnelly to quickly get inside the Pentagon and help Amazon. Sheridan didn’t respond to requests for comment.

Without confirming or denying the relationship, Floyd, now a spokesman for ITC Global Advisors, said he couldn’t comment on something Oracle had concocted. C5 said the allegations are untrue. In a blog post, Amazon said C5 has never been a partner or subcontractor, or lobbied on behalf of AWS, “in order for AWS to obtain government contracts.”

The argument that Donnelly and DeMartino were Amazon’s JEDI rainmakers was dealt a blow in November when the GAO rejected Oracle’s conflict-of-interest allegations. But the agency found that a senior Pentagon official who had worked for Donnelly at SBD Advisors scheduled and attended JEDI-related meetings. It also said he had access to internal strategy documents on the contract.

The GAO identified the official as the deputy chief of staff in Mattis’s office, the title held by DeMartino, who now works with Donnelly at her new firm. Ultimately, the GAO said, the evidence it reviewed indicated that he had no substantive input into the contract’s terms or the procurement process. The same DeMartino conflict-of-interest angle, however, is a key part of Oracle’s just-filed lawsuit, which could take months to resolve.

Neither the GAO decision, nor Oracle’s redacted lawsuit, mentions Donnelly.

Such ties between contractors and government officials make ethics experts squirm. “It’s a longstanding problem,” said Neil Gordon, an investigator with the Project on Government Oversight, speaking generally of the revolving door between the Pentagon and defense companies. “It creates the appearance that officials that work for the government may not be making decisions that are in the best interests of the government or taxpayers. That they are constantly angling to get high paid jobs in the private sector.”

In the spring and summer of 2018, Floyd suspected the anti-Amazon effort took a more ominous turn. He said former interns of SBD Advisors were contacted via LinkedIn and peppered with questions about the firm’s work with Amazon. The people who contacted the interns had no other internet presence beyond their LinkedIn profiles, leading Floyd to suspect they were fake.

In May, Floyd said, things got truly bizarre. A tall, stocky man turned up unannounced at his firm’s offices in downtown Washington. The young man introduced himself as an employee of a Maryland security company and said his client, a wealthy Middle Easterner, needed help with some technology challenges.

At first, Floyd said, he didn’t doubt the visitor’s intentions, even when he started asking about past Amazon work by Floyd’s company and its connections to former Pentagon officials. Floyd later learned the visitor had given him a fake email address and that no one by that name worked for the Maryland security firm he supposedly represented. Floyd now thinks the man was an operative investigating Donnelly’s old firm as part of the smear campaign.

Not all of Amazon’s critics worked in the shadows. John Weiler, an industry gadfly, has alleged that a Pentagon official involved with the JEDI competition sexually harassed co-workers and that improper payments were made to silence a trade group seeking more disclosure of internal Pentagon documents — without offering any proof.

Then Weiler, co-founder and executive director of the Information Technology Acquisition Advisory Council, a group that comments on government procurement of technology, was counterattacked. In August, Medium, a blog platform, took down a user-generated page called @MeTooInTech, which purported to represent a grassroots social media campaign accusing Weiler of harassing female government and tech leaders.

No alleged victims came forward, and a promised press conference to present their allegations never took place. Weiler denied the allegations and said the attacks were “clearly intended to make me shut up and stop talking about the corruption that was going on” with the cloud contract.

Allegations and innuendo continue to swirl around the JEDI bid, which is proving to be one of the Pentagon’s most controversial technology procurements. Now all eyes are on which company will win the prize. A decision is expected by April 2019.

“For the winner, it’s a major opportunity to establish a foothold in the federal market. So it’s not surprising that incumbents would fight tooth and nail to protect their business,” Bloomberg Government analyst Chris Cornillie said in an email. “That said, the extent to which the competition has gotten personal would seem unusual for an IT contract.”

—With assistance from Ben Brody

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From: FUBHO1/11/2019 11:18:56 PM
1 Recommendation   of 1597
IDC: Cloud Infrastructure Revenues Surpassed Those for Traditional IT for the First Time on Record
Vendors’ cloud infrastructure revenues grew to $16.8 billion in the third quarter of 2018, surpassing revenues from sales into traditional IT environments for the first time on record, according to International Data Corporation (IDC). The infrastructure revenue figure included servers, enterprise storage and Ethernet switches. The year-over-year gain was 47.2%.

The cloud IT infrastructure sales accounted for more than half (50.9%) of the total worldwide IT infrastructure vendor revenues, up from 43.6% in the third quarter of 2017.

However, the research firm cautioned that fourth quarter revenues were expected to be down compared to the year-earlier period, which means that spending on cloud IT infrastructure will represent less than 50% of total revenues for the full year (47.4%).

Cloud Infrastructure Revenues
Spending on all three technology segments in cloud IT environments is forecast to deliver double-digit growth in 2018, IDC added, with compute platforms to be the fastest growing at 59.1%, while spending on Ethernet switches and storage platforms will grow 18.5% and 20.4%, respectively.

“The first three quarters of 2018 were exceptional for the IT Infrastructure market across all deployment environments and the increase in IT infrastructure investments by public cloud data centers was especially strong, driven by the opening of new data centers and infrastructure refresh in existing data centers,” said Natalya Yezhkova, IDC research director, IT infrastructure and platforms, in a prepared statement. “After such a strong year we expect some slowdown in 2019 as the overall market cools down and some cloud providers work through adjustments in their supply chain. However, IDC expects the shift in IT infrastructure spending toward cloud environments will continue.”

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From: Glenn Petersen1/16/2019 11:54:48 AM
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Infor gets $1.5 billion more in funding ahead of planned IPO

January 15, 2019

(Reuters) - Cloud technology company Infor Inc said on Wednesday it received an investment of $1.5 billion from shareholders Koch Equity Development LLC and private equity firm Golden Gate Capital.

The funding builds on Koch Equity’s investment of more than $2 billion in early 2017. Infor said it is considering a potential IPO in 2019 or 2020, subject to market conditions.

New York-based Infor helps firms automate businesses by offering specialized software licenses to specific sectors as opposed to selling a product to its customers across industries.

Infor said it had revenue of $3 billion in fiscal year 2018.

Reporting by Akanksha Rana in Bengaluru; Editing by Arun Koyyur

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From: Sam1/29/2019 3:32:32 PM
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Microsoft earnings: How to look for a clue about a cloud downturn
By Jeremy C. Owens
Published: Jan 29, 2019 3:25 p.m. ET

If companies are spending less on cloud data centers, it should show up in Microsoft’s capital expenditures

The biggest drama in tech earnings so far this season is the possibility that the cloud boom is going bust, especially after Intel Corp. revealed disappointing data center sales last week.

For Microsoft Corp. MSFT, -2.06% , though, the downturn that is expected would likely cause little effect. Providers of cloud-computing power have shown no effects yet, as any downturn would be in its early stages and only affecting equipment providers far down the food chain. When Microsoft reports fiscal second-quarter earnings Wednesday afternoon, though, there could be at least one data point to test the theory.

For more: Intel’s cloud boom is no longer making it rain, and that’s a problem

Raymond James analysts pointed out last week that capital expenditure plans from Microsoft are typically “highly correlated” with Intel’s INTC, -0.48% outlook. For that reason, analysts at that bank expect Microsoft’s capex spending to be flat this calendar year, while consensus estimates call for an increase of 23% in this fiscal year and 10% in the 2020 fiscal year.

If the trend holds and Microsoft does pull back on its spending, it could back up Intel’s commentary that the entire data-center equipment market is slowing down. However, if Microsoft says that it expects to increase spending still, it could signal that the company is moving away from its “Wintel” partner in the cloud and looking at other chip vendors, which would just be an Intel problem and throw a small wrench in the talk of a cloud bust.

Either way, analysts appear confident that Microsoft is a safe bet at the moment because of its booming Azure cloud-computing business, a big reason why the company ended Monday with the largest valuation of any U.S. public company at more than $800 billion.

What to expect

continues at

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From: Glenn Petersen2/1/2019 9:47:40 AM
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Amazon Web Services reports 45 percent jump in revenue in the fourth quarter
  • Amazon Web Services said revenue reached $7.43 billion in the fourth quarter.
  • The segment remains Amazon's dominant source of profit.
Jordan Novet | @jordannovet
Published 17 Hours Ago Updated 14 Hours Ago

Amazon's cloud-computing division said revenue jumped 45 percent in the fourth quarter, as the company continued to cement its lead over Microsoft and Google.

Sales at Amazon Web Services climbed to $7.43 billion from $5.11 billion a year ago, topping the $7.29 billion consensus estimate among analysts polled by FactSet. AWS revenue represented 10 percent of total quarterly sales at Amazon.

The cloud business has become crucial to the success of its parent, not only for revenue but also for profits.

Operating income for AWS in the quarter was $2.18 billion, exceeding the $2.09 billion FactSet consensus estimate. The unit accounted for 58 percent of Amazon's overall operating income. AWS' operating margin was 29 percent, shrinking from 31 percent the prior quarter.

"We are getting more and more creative around getting efficiency up and getting our cost of acquisition down," Amazon's chief financial officer, Brian Olsavsky, told analysts on the company's quarterly earnings call on Thursday.

AWS beat Microsoft and Google to the market for cloud infrastructure, which companies use to outsource their computing and data storage needs, and has held onto its lead.

However, Microsoft's business is growing faster, even though it's still smaller than AWS. The software company said on Wednesday that Azure cloud revenue grew 76 percent in the latest quarter.

Brian Weiser, an analyst at Pivotal Research Group, had estimated that AWS would generate fourth-quarter revenue of $7.41 billion.

"With substantial upside potential for AWS and a strong track record, we think we can safely assume significant ongoing revenue growth for the foreseeable future," wrote Weiser, who initiated Amazon coverage with a "buy" rating earlier this month.

AWS' big announcements in the period included the introduction of new computing instances that rely on ARM-based server chips, custom-built chips for accelerating artificial-intelligence work and a plan to offer hardware equipped with AWS software for corporate data centers.

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To: Sam who wrote (1497)2/1/2019 10:05:24 AM
From: Glenn Petersen
   of 1597
Microsoft slips on revenue miss
  • Microsoft's revenue was slightly below consensus as revenue from Windows device makers fell.
  • Azure's revenue growth was flat sequentially at 76 percent.
ordan Novet | @jordannovet
Published 3:30 PM ET Wed, 30 Jan 2019 Updated 6:30 PM ET Wed, 30 Jan 2019

Shares of Microsoft stock fell as much as 4 percent Wednesday after the company issued its fiscal second-quarter earnings report with slightly lower revenue than expected.

Here are the major numbers:

  • Earnings: $1.10 per share, excluding certain items, vs. $1.09 per share as expected by analysts, according to Refinitiv.
  • Revenue: $32.47 billion, vs. $32.51 billion as expected by analysts, according to Refinitiv.
Revenue increased 12 percent year over year in the quarter, which ended on Dec. 31, Microsoft said in a statement.

While Microsoft again declined to disclose exact revenue for the Azure cloud business that's contributed to the company's success in recent years, Microsoft did say Azure grew 76 percent, which is flat sequentially from the previous quarter.

Given comments from Intel, Juniper and other companies related to spending on infrastructure, Microsoft investors had reason to be concerned about what that means for Azure, said Brent Bracelin, an analyst at KeyBanc Capital Markets who has a "buy" rating on the stock. Bracelin had predicted around 74 percent growth, or $2.85 billion in revenue.

Microsoft said it collected $9 billion in revenue from its Commercial Cloud category, which includes the Azure public cloud, commercial subscriptions to the Office 365 productivity software bundle, the Enterprise Mobility and Security products and commercial LinkedIn services.

The unit was up 48 percent, reflecting a sequentially higher growth rate from 47 percent one quarter ago. Bracelin had estimated it would rise 44.8 percent this time around. The gross margin for Commercial Cloud held steady sequentially at 62 percent.

Azure is second to Amazon Web Services in the market for cloud infrastructure, which lets companies offload their computing and data storage. Bracelin predicted Azure would contribute $2.85 billion in the quarter, implying around 74 percent growth, down sequentially from the prior quarter. Amazon, which publishes results tomorrow, is expected to report AWS revenue of $7.3 billion, according to analysts surveyed by FactSet.

"Within the next five years I don't envision Azure catching up," Bracelin said in an interview this week. He said that within 10 years, Azure could be bigger if AWS is still part of Amazon.

"The debate becomes at some point, do's ambitions limit the opportunities for AWS because of the competitive aspirations they have, that just limits the ability for AWS to grow," Bracelin said.

Microsoft's top business segment, More Personal Computing -- which encompasses gaming, search advertising, Surface and Windows -- hit $12.99 billion in revenue, below the $13.08 billion consensus estimate among analysts polled by FactSet.

Revenue from Windows device makers fell 5 percent year over year in the worst results there in more than two years. On a conference call with analysts, Microsoft's chief financial officer, Amy Hood, attributed those results in part to the timing of the supply of processors to PC partners. Meanwhile, Microsoft's Surface revenue, at $1.86 billion, was up 39 percent.

The company's Productivity and Business Process Segment -- including Dynamics, LinkedIn and Office -- generated $10.10 billion in revenue, coming in barely over the $10.09 billion FactSet analyst estimate. Office revenue from consumers was affected by the PC environment, along with "some execution challenges we had," Hood said.

And the Intelligent Cloud Segment, which includes Azure, enterprise services, SQL Server and Windows Server, posted revenue of $9.38 billion, beating the $9.28 billion estimate. In the past few years Microsoft's capital expenditures -- to support Azure and other products -- has risen sequentially from the fiscal first quarter to the fiscal second quarter, but this time it fell sequentially, going from $4.3 billion to $3.9 billion.

In the quarter Microsoft had 33.3 million Office 365 consumer subscribers, up from 32.5 million in the fiscal first quarter. In December Microsoft had 64 million monthly active Xbox Live users, up from 57 million in September.

Microsoft announced some notable cloud deals in the quarter including Gap and Walgreens. The company also acquired Glint and disclosed a change to its Edge browser strategy, a market where it competes with Google Chrome.

In terms of guidance, Hood said Microsoft expects between $29.4 billion and $30.1 billion in revenue in the fiscal third quarter. The midpoint of that range is just below the Refinitiv consensus estimate of $29.87 billion. She said Microsoft expects "continued market impact" because of a more limited supply of chips, and she said the PC conditions could also hinder Office consumer revenue growth. Microsoft's stock rose slightly in extended trading after Hood provided guidance.

Microsoft has been going back and forth with Amazon in recent weeks for the title of world's most valuable company by stock market value. The shares are up about 4 percent so far this year.

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From: Sam2/4/2019 2:06:14 PM
1 Recommendation   of 1597
Enterprise Cloud Adoption Rates Rising With Microsoft, Amazon Leading Ahead of JEDI Award
MT NEWSWIRES 2:04 PM ET 2/4/2019

Symbol Last Price Change
105.44 +2.66 (+2.59%)
1636 +9.77 (+0.6%)
QUOTES AS OF 02:04:30 PM ET 02/04/2019

02:04 PM EST, 02/04/2019 (MT Newswires) -- Adoption rates in the cloud are rising among businesses, with Microsoft's(MSFT) Azure and Amazon's(AMZN) Web Services leading the way as anticipation grows ahead of the awarding of a key government contract, Wedbush Securities said on Monday.

Azure revenue grew 76% year-on-year and AWS was up 45%, quarterly reports last week showed, with Alphabet's (GOOGL) a "distant third" with more details to be given later Monday in its own earnings, analysts Daniel Ives and Strecker Backe said in a note.

Microsoft (MSFT) "continued to be in the midst of shifting its business from traditional, slow growing PCs, into a leader in the fast-growing cloud market on the shoulders of its core Azure platform," the analysis said. The cloud battle versus AWS "remains front and center" for Microsoft(MSFT) in 2019 and beyond, especially as other companies come at the cloud market aggressively from different angles, Wedbush said.

"While this will be a pivotal year ahead for Google and its key GCP endeavour, we believe Azure and AWS remain miles ahead of the nearest competitor," Ives and Backe said.

But anticipation is growing for the winner to be announced likely in late March or early April for the US Department of Defense's Joint Enterprise Defense Infrastructure, or JEDI, Cloud contract, which Wedbush said is worth $10 billion.

"All investor eyes are trying to decipher if this is an AWS win or potentially Azure given Microsoft's(MSFT) long standing DOD relationship," the analysts said. "While both Amazon(AMZN) and Microsoft(MSFT) have their proponents and critics within government circles from an IT and security perspective, based on our discussions it appears this battle for JEDI is more of (about) 60%/40% AWS vs MSFT chances to win." But that's different than the "runaway" 80%/20% for AWS a year ago, they said.

JEDI's underlying goal is to deliver a cloud services solution to support unclassified, secret and top secret requirements across the department of defense, Wedbush said.

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From: Glenn Petersen2/22/2019 5:16:09 PM
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Using Notecard, devices can connect to cloud providers like Amazon's AWS or Microsoft’s Azure without ever having to cross the public internet, offering additional security benefits.

Exclusive: Ray Ozzie wants to wirelessly connect the world

Ina Fried
February 22, 2019

Photo illustration: Axios Visuals

Ray Ozzie, the man who created Lotus Notes and helped usher Microsoft into the cloud era has a new goal: helping devices in the home get smarter by hooking them up directly to the cellular airwaves. In an exclusive interview, Ozzie said his startup has started trials with AT&T on a module that securely connects all sorts of products, from appliances and alarms to vending machines and construction equipment.

Bottom line: There's no doubt that many more devices are going to be connected wirelessly in coming years and that not all device makers will want to handle connectivity themselves. Ozzie's startup is likely to be just one of many companies willing to take on that task.

The premise behind Ozzie's new company, Blues Wireless, is that everyone from appliance makers to logistics companies will want their products to have a secure wireless connection without the hassles or risks of doing it themselves.

"Customers ate trying to connect virtually everything that exists to the cloud," Ozzie told Axios. "It’s fairly a no-brainer as compared to a technology in search of a problem."

Current and forthcoming cellular networks will be able to compete favorably with Wi-Fi, Ozzie said, offering several benefits.
    -- Unlike with Wi-Fi, devices can be set at the factory to connect wirelessly. Many Wi-Fi-equipped devices today never get connected because consumers either don't see enough benefit or get frustrated with the set-up process.

    -- Everything is encrypted, with secure credentials stored on the device itself.

    -- Using Notecard, devices can connect to cloud providers like Amazon's AWS or Microsoft’s Azure without ever having to cross the public internet, offering additional security benefits.
Yes, but: The problem is more than a technical one, Ozzie acknowledges: Cellular connections cost money, and efforts to connect devices in the past left customers to manage the data costs themselves.Blues Wireless hopes to take that hassle away by using a Kindle-like business model, selling the modules at enough of a profit to cover the cost of the device and the wireless data the devices will use. It isn't saying just how much it expects to charge.Also, Blues is still small, using mostly contractors and bankrolled by Ozzie.

History lesson: In the past, Ozzie's brainstorms have typically been directionally correct but ahead-of-their-time products looking to capitalize on shifts in the way people and computers interact. This time around, Ozzie says he's banking on making it easier for companies to get on board an inevitable hardware trend.

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From: Glenn Petersen3/11/2019 9:54:10 AM
   of 1597
Nvidia to Buy Mellanox for $6.9 Billion in Data Center Push

By Ian King
March 11, 2019

-- Mellanox holders offered $125-per-share in all-cash deal

-- Graphics chipmaker trying to further embed itself in servers

Jensen Huang holds a Nvidia Drive Xavier Autonomous Machine Processor at CES.
Photographer: David Paul Morris/Bloomberg

Nvidia Corp. agreed to buy chipmaker Mellanox Technologies Ltd. for $6.9 billion, gaining expertise to help it push into the growing market for data center components.

The $125-a-share cash offer for Mellanox is a 14 percent premium to Friday’s close of $109.38. But traders may not be sold on the idea that the deal will go through, with Mellanox trading up 8.6 percent to $118.80, still short of the bid from Santa Clara, California-based Nvidia.

Nvidia’s biggest-ever acquisition is aimed at accelerating momentum for one of Chief Executive Officer Jensen Huang’s most successful initiatives. The company’s founder built a multi-billion-dollar business in under three years by persuading owners of data centers that his graphics chips are the right solution for processing the increasingly large amounts of information needed for artificial intelligence work, such as image recognition.

“The data center is more important than ever,” Huang said in an interview. “This combination allows us to innovate faster.”

Nvidia is said to have won a bidding process for the American-Israeli company, which makes chips used to speed the flow of information across computer servers, beating out rivals including Intel Corp. Mellanox’s market value, now at about $5.9 billion, started to run up last year when activist investors took stakes and talk that it was up for sale emerged. Shares of the company, which is based in Yokneam, Israel and Sunnyvale, California, have risen 66 percent from their October trough and 18 percent this year before the deal was announced. Nvidia shares were up 1.5 percent Monday in New York to $152.89.

The acquisition process was ‘‘very competitive,’’ Huang said. Once complete, the combination is expected to be immediately accretive to profit and free cash flow, Nvidia said.

The growing reams of data generated means work on AI and large databases needs to be split between multiple computers. Simply using a faster processor isn’t enough, Huang said. To deal with this, data centers in future will be built as though they are single giant computers “with tens of thousands of compute nodes,” requiring inter-connections that let them work in parallel. Nvidia will use its newly acquired technology to make those giant warehouses full of machinery more efficient and effective, he said.

The deal may signal a resumption of consolidation in the $470 billion semiconductor industry, which has been reshaped over the past five years as companies combined to gain scale while battling rising costs and shrinking customer lists.

“This could reinvigorate M&A discussions across the entire sector. Net Net: while the transaction would be a positive, given the size of the company, we wouldn’t view it as a transformation,” RBC Capital Markets analyst Mitch Steves wrote in a note to clients. “A deal would be more impactful for the broader semiconductor industry.”

Mellanox’s technology is crucial in transferring information from one component to another, both within and between computers. Chips that direct that traffic have become increasingly pivotal as corporate networks and internet-based cloud service providers try to make sense of the plethora of data.

Multiple companies have an interest in adding such capabilities to their own products as they try to court major buyers of servers and other computer infrastructure, such as Alphabet Inc.’s Google, Inc. and Microsoft Corp.

Nvidia is the largest maker of graphics chips used by computer gamers. Such chips excel at executing multiple small calculations in parallel at high speed. Under Huang, the company developed the Cuda programming language now widely adopted by the industry, which helps tailor chips for artificial intelligence processing. The Nvidia unit that serves that market has tripled sales in the past three years.

Mellanox’s revenue surged 26 percent in 2018, topping $1 billion for the first time. Nvidia had $2.9 billion in sales from its data center unit last year, up from $830 million two years earlier.

The transaction now needs approval from regulators. That process has become more complicated as the U.S. faces off with China over trade. The Trump administration has blocked deals over concerns about China’s ambitions to acquire new semiconductor technology, and Beijing -- the world’s largest consumer of chips -- has in turn made it harder to secure its approval for transactions.

Huang said Nvidia studied carefully how the deal would be reviewed by regulators and believed it wouldn’t face significant hurdles because the two companies are complementary. Goldman Sachs served as exclusive financial adviser to Nvidia, while Credit Suisse Group and JPMorgan Chase & Co. advised Mellanox.

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From: Glenn Petersen3/21/2019 10:15:02 AM
   of 1597
Google Just Showed Us the Future of Gaming

Data centers could make individual game consoles obsolete

Eric Ravenscraft
Mar 19

Photo: Justin Sullivan/Getty

On Tuesday at GDC 2019, Google announced Stadia, a new game-streaming service that will let you play AAA video games—the industry’s blockbusters—on almost every device you own, including your laptop, phone, TV, or even a Chromecast. If it works as advertised—a big “if”—it could end the gaming hardware market as we know it.

With Stadia, which is slated to launch later this year, Google is aiming for nothing less than entirely detaching video games from the hardware you own. Instead of downloading a game to your computer or putting a disc in your console, the game would be installed on a remote server that Google owns and operates.

You won’t have to buy a new console or build a new PC to run the latest generation of games. Instead, Google can upgrade Stadia servers entirely behind the scenes. You’ll just wake up one day and find that you can play games with better graphics. This presumably means high-end gaming is about to get a lot cheaper—a top-of-the-line PlayStation 4 Pro costs about $400—though Google declined to share pricing details with OneZero.

We don’t tend to think about it too much, but video games have an unusually intimate connection with the hardware they run on. Every few years, Sony, Microsoft, Nintendo, and PC hardware manufacturers release new devices that add more power and features to the games you play. Microsoft made 4K gaming possible with the Xbox One X, NVIDIA launched graphics cards capable of ray tracing, and Nintendo had that weird expansion pack that made Donkey Kong 64 not crash. For as long as they’ve existed, video games and their hardware have been intrinsically linked. Think The Legend of Zelda: Ocarina of Time, for instance, and you’ll picture the Nintendo 64 it ran on.

But while this relationship is widely accepted in gaming, the same isn’t true for most other kinds of software. A professional video editor might need a better machine to squeeze more out of Adobe Premiere, but no one has to upgrade their phone every couple years to use Gmail or buy a new laptop to run the latest version of Microsoft Word.

Photo: Justin Sullivan/Getty

This kind of cloud gaming service has been tried many times before, from the failed OnLive to PlayStation Now and to the still-in-beta NVIDIA GeForce Now. But two key factors set Google’s attempt apart. First, you may already own a device capable of running Stadia. GeForce Now is the closest to this platform-agnostic dream, with support for both Mac and Windows computers, but Stadia goes a step further by including Chromebooks, phones, and even the modest Chromecast streaming device. If you have a gadget capable of running YouTube, Google says you can play the newest high-end games using Stadia.

Second, the servers these games will run on are owned by Google. And Google is very good at building servers. Video games, especially the visually rich AAA games that most modern consoles can play, are among the most resource-hungry applications any computer can run. For an individual player, keeping up with the pace of hardware innovation can be a Sisyphean task—and an obscenely expensive one at that. For Google, upgrading massive systems with the latest hardware is done routinely.

Consider the current gold standard of gaming: 4K resolution, running at 60 frames per second. If you have a 4K TV today, you have a few options available to play games that can get the most out of it. You can buy an Xbox One X or a PlayStation 4 Pro, or you could build a PC capable of playing 4K games.

According to Google, Stadia will launch with support for playing games at 4K HDR at 60 fps right off the bat. For a new service launching in 2019, perhaps that’s to be expected. However, the company went a step further, announcing that it would scale up to 8K and 120 fps in the future. The company didn’t give a timeline for when this would happen, but since the first consumer-level 8K TVs were only just announced this year, few consumers are likely to be in any rush.

This approach also removes the roadblock for more subtle innovations. For example, NVIDIA’s new ray-tracing graphics cards simulate the way light works in the real world, creating instant shadows and realistic reflections and simplifying a lot of the work game developers have to do to make a game look good. The benefit is so immediately obvious that it spawned its own meme.

But ray tracing presents a problem for game developers: It only works on NVIDIA graphics cards that support the feature. The company is expanding the list of supported cards, but that still leaves a potential audience that’s limited to a subset of PC gamers who have a small selection of relatively high-end graphics cards. With such a minuscule audience, few outside of the biggest studios will invest resources into developing games for it. It’s just not worth it yet.

Were that technology to be incorporated into Stadia servers, however, the potential audience would be massive. Instead of waiting for consumers to slowly migrate to new hardware, bigger and better games can be shipped as soon as Google’s data servers are upgraded. Companies like NVIDIA would also be more likely to sell their new high-end hardware directly to Google, rather than trying to incrementally sell $600-plus cards to average consumers.

There are still a lot of potential stumbling blocks for Stadia. The biggest bottleneck is home internet speeds, which, in the United States, have not always had the bandwidth to support something as intense as 4K game streaming. There’s also the price: $20 a month for access to a library of games?—?as is the case for PlayStation Now?—?might be reasonable, but if the company makes users pay separately for additional features like 4K streaming or ray tracing, it might end up a wash compared to just buying a console.

What’s not in question is the earth-shattering effect Stadia will have on gaming hardware in the home if the service works as advertised. To use a soon-to-be-timely pop culture analogy, the industry has resembled the endlessly turning wheel of power in Westeros that Daenerys Targaryen describes in Games of Thrones: Nintendo, Sony, Microsoft, NVIDIA, each taking their turn on top with successive and expensive upgrades. Consumers have accepted the need to buy new consoles or graphics cards every few years, because there has been no other way to play the latest games. In a world where you can play the newest Tomb Raider in perfect 4K HDR on something as simple as a Chromecast, however, the endlessly turning wheel of hardware upgrades won’t just stop—it will break altogether.

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