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   Technology StocksCloud, edge and decentralized computing

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From: Glenn Petersen4/10/2019 5:02:34 PM
   of 1641
CIA Considering Cloud Contract Worth ‘Tens of Billions’

The agency is hungry for more commercial cloud.

By Frank Konkel
April 9, 2019


After six years in a classified commercial cloud built by Amazon Web Services, the CIA wants more commercial cloud capabilities from potentially multiple companies.

The agency is in the early stages of planning a contract for commercial cloud computing services that will be worth “tens of billions” of dollars, according to contracting documents presented to select tech companies by the CIA in late March and obtained by Nextgov.

Dubbed the Commercial Cloud Enterprise, or C2E, the two-phase initiative will “expand and enhance” the commercial cloud capabilities it first contracted for with Amazon Web Services in 2013.

That contract, called C2S and valued at up to $600 million over 10 years, provided commercial cloud capabilities such as data storage, computing and analytics to the CIA and its 16 sister agencies within the intelligence community.

“Since that time, cloud computing has proven transformational for the IC–increasing the speed at which new applications can be developed to support mission and improving the functionality and security of those applications,” the CIA contracting documents state.

Whereas C2S has been managed by a single company, the CIA expects to “acquire foundational cloud services” from multiple vendors in phase one of C2E, which is good news for companies like IBM, Microsoft, Google and others expected to compete for the contract.

The initiative’s second phase also opens up competition with a stated goal to “acquire through multiple vehicles” cloud management capabilities and specialized platform- and software-as-a-service offerings. To be considered for the contract, cloud service providers must have a commercial presence and must meet rigid government requirements to host secret and top secret classified information. AWS is currently the only commercial cloud provider cleared to host all levels of classified data.

AWS established a foothold in the national security space through C2S. Over the years, it has introduced new services and earned plaudits from the CIA’s top tech officials for being more secure than the agency’s own data repositories. Most recently, Andrew Hallman, deputy director for innovation at the CIA, praised the department’s previous cloud efforts and said its future plans will focus on fusing various cloud architectures together.

“We have a major cloud provider and we have had a journey to cloud becoming very successful,” said Hallman, speaking March 28 at an event hosted by Nextgov and Defense One.

“The important thing is to look at what the future of cloud looks like—hybrid cloud architectures, multi-cloud architectures—and that, for us, the very important thing is making really wise decisions about how those architectures work together.”

Meanwhile, cloud computing’s import across government continues to expand, with federal agencies collectively expected to spend $2 billion on the technology in the coming year. AWS has been favored to win the largest cloud contract up for grabs, the Pentagon’s multibillion Joint Enterprise Defense Infrastructure contract.

Currently held up in court, JEDI is the Pentagon’s nascent effort to bring enterprisewide commercial cloud capabilities to the Defense Department and its branches, akin to what C2S did for the intelligence community. Like C2S, JEDI will be awarded to a single commercial cloud service provider, one of the reasons it’s been so controversial, with companies vying in public and private to influence the deal.

The CIA’s C2E contract, however, dwarfs even JEDI in size and scope, though the contract is subject to change because the government is so early in the contracting process. According to a proposed acquisition timeline accompanying the contracting documents, the CIA intends to engage industry regarding contract requirements through next year. The timeline proposes the C2E contract be bid out in May 2020 with an award “no later than July 2021.”

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From: Glenn Petersen4/28/2019 10:37:26 PM
   of 1641
Alibaba Pushes Its Cloud Unit Globally As It Trounces Amazon in Asia

By Lulu Yilun Chen
April 24, 2019

-- Chinese web giant will continue cloud investment abroad

-- Alibaba Cloud won largest market share in Asia, Gartner says

Alibaba Group Holding Ltd.’s $3 billion cloud services arm is fast becoming an important driver of its global expansion.

The e-commerce giant widened its lead over Inc. and Microsoft Corp. in Asia’s cloud computing market in 2018, according to Gartner, which in turn helped it narrow its global gap with those two rivals. That’s helping Alibaba advance billionaire co-founder Jack Ma’s vision of earning half its revenue beyond China.

Alibaba’s overseas cloud expansion will continue to outpace its domestic growth as the company pushes further into other countries, according to Lancelot Guo, Alibaba Cloud’s vice president and head of strategy. “Internationalization is a key strategy for Alibaba and cloud,” Guo said in a phone interview. “We want to grow even faster.”

The company declined to disclose its budget or revenue target. Guo said it seeks to cater to U.S. companies investing in China and vice versa, and that setting up data centers in Indonesia and Malaysia will help it comply with local data requirements.

The cloud business underpins Alibaba’s revenue growth, helping it offset saturation in its home e-commerce arena. The overall cloud market could grow by 55 percent to $331.2 billion in three years, according to Gartner, and Alibaba’s cloud business has been generating triple-digit revenue growth over the past three years, outpacing the industry.

Gartner estimates that Alibaba last year accounted for 19.6 percent of the Asia region’s markets for infrastructure as a service and infrastructure utility services, two of the most popular forms of cloud business. That means its regional market share rose by nearly a third from 2017, while Amazon’s fell slightly to 11 percent. (Globally, Amazon leads with 30.4 percent to Alibaba’s 4.9 percent.)

It’s been a tumultuous year for global tech operators as the U.S., Europe and countries across Southeast Asia tighten their grip on data services. Vietnam and Thailand are among the nations warming to a stricter model of governance than tech companies have been accustomed to in the internet era.

That’s one reason to invest in local data centers. Alibaba has 15 such facilities in Asia excluding China, including Hong Kong, Australia, India and Japan. “We are very, very sensitive and aware,” said Guo. “We work with a lot of third parties to understand each country’s laws.”

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From: Glenn Petersen5/27/2019 10:20:33 AM
   of 1641
Nvidia announces its first AI platform for edge devices

by Mike Wheatley
UPDATED 03:30 EDT / MAY 27 2019


Nvidia Corp. is bringing artificial intelligence to the edge of the network with the launch early Monday of its new Nvidia EGX platform that can perceive, understand and act on data in real time without sending it to the cloud or a data center first.

Delivering AI to edge devices such as smartphones, sensors and factory machines is the next step in the technology’s evolutionary progress. The earliest AI algorithms were so complex that they could be processed only on powerful machines running in cloud data centers, and that means sending lots of information across the network. But this is undesirable because it requires lots of bandwidth and results in higher latencies, which makes “real-time” AI something less than that.

What companies really want is AI to be performed where the data itself is created, be it at manufacturing facilities, retail stores or warehouses. And it’s a problem that several tech firms have attempted to address, most recently Intel Corp. with the launch of its first 10-nanometer “Ice Lake” chips today but also dozens of startups.

But Nvidia’s entrance into the AI edge is notable because the company’s graphics processing units are widely regarded as some of the best AI-processing hardware around. That includes its Tesla V100 for deep learning, and its Quadro GV100, which enables ray tracing, the process of creating realistic images, to be done in real time.

The new NVIDIA EGX platform is scalable from a light server based on the Jetson Nano processor that performs 0.5 Trillion operations per second in a few watts, to a micro data center with a rack of NVIDIA T4 based edge servers that can do 10,000 trillion operations per second. The energy-saving capabilities of the chip are important for AI, since traditional hardware is a massive power hog when running such tasks.

In a media briefing, Justin Boitano, senior director of enterprise and edge computing at Nvidia, said there will be huge demand for a platform such as NGX because there will be something like 150 billion machine sensors and “internet of things” devices in the world by 2025. He said many of these sensors would be used for initiatives such as “smart cities,” and will be pumping out data that needs to be processed onsite, for reasons such as a demand for lower latency, real-time response, data sovereignty rules or privacy concerns.

“AI is really the killer application in all industries both in vision and in speech,” Boitano said.

Partnerships are important as well if people are actually going to put those chips to good use. For that reason Nvidia is integrating the NVIDIA Edge Stack software than runs on EGX with Red Hat Inc.’s OpenShift Kubernetes container orchestration platform in order to make it compatible with modern software applications.

The platform also integrates security, storage and networking technologies from Mellanox Technologies Ltd., which is a company that Nvidia intends to acquire by the end of year for a cool $6.9 billion.

“Mellanox Smart NICs and switches provide the ideal I/O connectivity for data access that scale from the edge to hyperscale data centers,” said Mellanox Chief Technology Officer Michael Kagan.

Nvidia is teaming up with no fewer than 13 different server makers to sell the EGX platform, including big-name manufacturers such as Cisco Systems Inc., Dell-EMC, Hewlett Packard Enterprise Co. and Lenovo Group Holding Ltd.

NGX is also compatible with AI applications running on major cloud infrastructure services such as Amazon Web Services and Microsoft Azure, and can connect to IoT services such as AWS IoT Greengrass and Azure IoT Edge.

images: Nvidia

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From: Glenn Petersen6/5/2019 3:02:53 PM
   of 1641
Mee described some of the complexity in the market as related to public cloud companies providing traditional on-premises offerings. He didn’t provide names, but Amazon Web Services leads the public cloud market and has been promoting its ability to serve customers even in their own data centers. He also mentioned Kubernetes, open-source software created at Google that lets developers easily move around their applications and workloads.

Pivotal Software loses almost half its value after ‘train wreck’ of an earnings report

Published an hour ago
Jordan Novet@jordannovet
  • Wedbush downgraded Pivotal stock in the wake of the earnings report.
  • The company said it’s taking steps to fix sales execution issues.

Pivotal Software CEO Rob Mee.
Source: Pivotal Software

Pivotal Software shares crashed on Wednesday, knocking off about half the company’s market value, after a light revenue forecast raised concerns that demand for its products is weakening.

The stock plunged as much as 45% to a low of $10.10, pulling its market capitalization below $3 billion. Prior to Wednesday, Pivotal’s worst day since its IPO last year came in September, when the shares dropped 20%.

Pivotal, which sells subscriptions for software that’s designed to help companies deploy applications across multiple clouds, lowered its full-year revenue guidance and now expects sales of $756 million to $767 million, well below the Refinitiv consensus estimate of $803 million.

CEO Rob Mee told analysts on a conference call after hours on Tuesday that the company was experiencing sales execution problems.

“Some of the deals we expected to close in Q1 slipped,” Mee said. He highlighted “a complex technology landscape that is lengthening our sales cycle.”

It’s a theme investors have heard from other enterprise technology vendors competing in crowded markets against large incumbents and high-growth upstarts. Pure Storage had its worst day ever as a public company last month following disappointing earnings. In lowering its outlook for the year earlier this week, Box Chief Financial Officer Dylan Smith pointed to “anticipation of longer sales cycles across our larger deals.” Zuora CEO Tien Tzuo said his company needed to improve its sales execution based on its latest quarterly results, which led to a 30% plunge in the stock on Friday.

For the fiscal second quarter, Pivotal expects revenue of $185 million to $189 million, trailing the average analyst estimate of $198 million, according to Refinitiv.

Mee described some of the complexity in the market as related to public cloud companies providing traditional on-premises offerings. He didn’t provide names, but Amazon Web Services leads the public cloud market and has been promoting its ability to serve customers even in their own data centers. He also mentioned Kubernetes, open-source software created at Google that lets developers easily move around their applications and workloads.

“I think it’s really causing customers to take their time and think about what they’re doing,” Mee said. He added that the company named a new head of sales for the Americas.

Pivotal’s first-quarter results were actually better than expected. The company reported a loss of 3 cents per share, excluding certain items, on $185.7 million in revenue. Analysts polled by Refinitiv had been expecting a loss of 5 cents per share on $184.1 million in revenue.

Some analysts downgraded the stock after the report. Daniel Ives and Strecker Backe of Wedbush Securities, reduced their rating to “neutral” from “outperform,” cut their price target from $26 to $15 and described the quarter and guidance as a “train wreck.”

“It is clear to us that this management team does not have a handle on the underlying issues negatively impacting its sales cycles and the activity in the field which gives us concern that this quarter will be the start of some ‘dark days ahead’ for Pivotal,” the analysts wrote.

They said Pivotal could be an acquisition prospect over time, but for now no buyer would closely consider it because of the issues it faces with growth.

Alex Kurtz and Steven Enders of KeyBanc Capital Markets maintained their “overweight” rating on Pivotal but lowered their price target from $27 to $21.

“Better understanding the breadth of the demand slowdown will be an important factor in this lowered outlook, as the miss could be localized to a handful of accounts given PVTL deal size,” the analysts wrote.

With Wednesday’s drop, Pivotal shares are down 34% this year.

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From: FJB6/6/2019 1:55:19 PM
2 Recommendations   of 1641
Microsoft and Oracle to combine clouds
1h | Natalie Bannerman
Microsoft and Oracle have entered into a cloud interoperability partnership enabling customers to migrate and run enterprise workloads across Microsoft Azure and Oracle Cloud.

Thanks for the partnership enterprises can connect Azure services like Analytics and AI, to Oracle Cloud services like Autonomous Database.

“As the cloud of choice for the enterprise, with over 95% of the Fortune 500 using Azure, we have always been first and foremost focused on helping our customers thrive on their digital transformation journeys,” said Scott Guthrie (pictured), executive vice president of Microsoft’s Cloud and AI division. “With Oracle’s enterprise expertise, this alliance is a natural choice for us as we help our joint customers accelerate the migration of enterprise applications and databases to the public cloud.”

By allowing customers to run one of part of their workload in Azure and the other in Oracle Cloud it enabling a best-of-both-clouds experience, creating a one-stop shop for all the cloud services and applications they need to run their business.

In addition to providing interoperability for customers running Oracle software on Oracle Cloud and Microsoft software on Azure, it enables new and innovative scenarios like running Oracle E-Business Suite or Oracle JD Edwards on Azure against an Oracle Autonomous Database running on Exadata infrastructure in the Oracle Cloud.

“The Oracle Cloud offers a complete suite of integrated applications for sales, service, marketing, human resources, finance, supply chain and manufacturing, plus highly automated and secure Generation 2 infrastructure featuring the Oracle Autonomous Database,” said Don Johnson, executive vice president, Oracle Cloud Infrastructure (OCI). “Oracle and Microsoft have served enterprise customer needs for decades. With this partnership, our joint customers can migrate their entire set of existing applications to the cloud without having to re-architect anything, preserving the large investments they have already made.”

Through the expanded partnership, a number of new capabilities have been made available including:

  • Seamless connection to Azure and Oracle Cloud , allowing customers to extend their on-premises data centres to both clouds.
  • Unified identity and access management, via a unified single sign-on experience and automated user provisioning, to manage resources across Azure and Oracle Cloud.
  • Supported deployment of custom applications and packaged Oracle applications on Azure with Oracle databases (deployed in Oracle Cloud.
  • A collaborative support model to help IT organisations deploy these new capabilities while enabling them to use existing customer support relationships and processes.

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    From: Glenn Petersen6/10/2019 9:30:41 AM
       of 1641
    Salesforce counters Microsoft:

    Salesforce is buying data visualization company Tableau for $15.7B in all-stock deal

    Ingrid Lunden @ingridlunden
    June 10, 2019

    On the heels of Google buying analytics startup Looker last week for $2.6 billion, Salesforce today announced a huge piece of news in a bid to step up its own work in data visualization and (more generally) tools to help enterprises make sense of the sea of data that they use and amass: Salesforce is buying Tableau for $15.7 billion in an all-stock deal.

    The latter is publicly traded and this deal will involve shares of Tableau Class A and Class B common stock getting exchanged for 1.103 shares of Salesforce common stock, the company said, and so the $15.7 billion figure is the enterprise value of the transaction, based on the average price of Salesforce’s shares as of June 7, 2019.

    This is a huge jump on Tableau’s last market cap: it was valued at $10.79 billion at close of trading Friday, according to figures on Google Finance. (Also: trading has halted on its stock in light of this news.)

    The two boards have already approved the deal, Salesforce notes. The two companies’ management teams will be hosting a conference call at 8am Eastern and I’ll listen in to that as well to get more details.

    This is a huge deal for Salesforce as it continues to diversify beyond CRM software and into deeper layers of analytics.

    The company reportedly worked hard to — but ultimately missed out on — buying LinkedIn (which Microsoft picked up instead), and while there isn’t a whole lot in common between LinkedIn and Tableau, this deal is also about extending engagement with the customers that Salesforce already has.

    This also looks like a move designed to help bulk up against Google’s move to buy Looker, announced last week, although I’d argue that analytics is a big enough area that all major tech companies that are courting enterprises are getting their ducks in a row in terms of squaring up to stronger strategies (and products) in this area. It’s unclear whether (and if) the two deals were made in response to each other.

    “We are bringing together the world’s #1 CRM with the #1 analytics platform. Tableau helps people see and understand data, and Salesforce helps people engage and understand customers. It’s truly the best of both worlds for our customers–bringing together two critical platforms that every customer needs to understand their world,” said Marc Benioff, Chairman and co-CEO, Salesforce, in a statement. “I’m thrilled to welcome Adam and his team to Salesforce.”

    Tableau has about 86,000 business customers including Charles Schwab, Verizon (which owns TC), Schneider Electric, Southwest and Netflix. Salesforce said it will operate independently and under its own brand post-acquisition. It will also remain headquartered in Seattle, WA, headed by CEO Adam Selipsky along with others on the current leadership team.

    That’s not to say, though, that the two will not be working together: on the contrary, Salesforce is already talking up the possibilities of expanding what the company is already doing with its Einstein platform ( launched back in 2016, Einstein is the home of all of Salesforce’s AI-based initiatives); and with “Customer 360”, which is the company’s product and take on omnichannel sales and marketing. The latter is an obvious and complementary product home, given that one huge aspect of Tableau’s service is to provide “big picture” insights.

    “Joining forces with Salesforce will enhance our ability to help people everywhere see and understand data,” said Selipsky. “As part of the world’s #1 CRM company, Tableau’s intuitive and powerful analytics will enable millions more people to discover actionable insights across their entire organizations. I’m delighted that our companies share very similar cultures and a relentless focus on customer success. I look forward to working together in support of our customers and communities.”

    “Salesforce’s incredible success has always been based on anticipating the needs of our customers and providing them the solutions they need to grow their businesses,” said Keith Block, co-CEO, Salesforce. “Data is the foundation of every digital transformation, and the addition of Tableau will accelerate our ability to deliver customer success by enabling a truly unified and powerful view across all of a customer’s data.”

    More to come as we learn it. Refresh for updates.

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    From: Glenn Petersen6/12/2019 12:51:55 PM
       of 1641
    CrowdStrike pops nearly 80% in debut, now worth about $12 billion

    Published 42 min agoUpdated Moments Ago
    Lauren Feiner @lauren_feiner
    • CrowdStrike opened its first day of trading on the Nasdaq with a share price of $63.50, surging from its IPO price of $34.
    • The company provides cloud-based security software to companies like Amazon Web Services and Credit Suisse.
    • CrowdStrike recorded a net loss of $140 million for the year ended Jan. 31, while revenue more than doubled to $249.8 million.

    George Kurtz
    Heidi Petty | CNBC

    CrowdStrike rocketed as much as 97% in its first day of trading on the public market on Wednesday. The security software vendor opened trading at $63.50 after it priced its IPO at $34 a share, above the high end of its expected range of $28 to $30 per share.

    The stock settled to a pop of more than 78%, pushing its market cap to about $12 billion, quadruple the valuation from its last private round in June 2018. The company is worth more than 37-year-old security software provider Symantec despite having about 5% as much revenue.

    Crowdstrike, trading on the Nasdaq under ticker symbol “CRWD,” joins a rapidly growing 2019 IPO class, which already includes Uber, Lyft and Pinterest. In the business software market, CrowdStrike follows the debuts of Zoom and PagerDuty and comes just a head of Slack’s direct listing.

    With the first-day surge, CrowdStrike CEO George Kurtz is a billionaire, and the company’s early backers are notching huge returns. Warburg Pincus owns a stake worth over $3 billion. Accel’s stake is valued at over $2 billion, and Alphabet’s CapitalG controls shares worth over $1 billion.

    CrowdStrike, whose cloud-based technology is used to detect and prevent breaches, recorded a net loss of $140 million for the year ended Jan. 31, while revenue more than doubled to $249.8 million, according to the company’s prospectus.

    The company counts Credit Suisse, Tribune Media and Amazon Web Services among its customers.

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    From: Glenn Petersen6/28/2019 2:57:28 PM
    1 Recommendation   of 1641
    Enterprise SaaS revenue hits $100B run rate, led by Microsoft and Salesforce

    Ron Miller
    June 27, 2019

    In its most recent report, Synergy Research, a company that monitors cloud marketshare, found that enterprise SaaS revenue passed the $100 billion run rate this quarter. The market was led by Microsoft and Salesforce.

    It shouldn’t be a surprise at this point that these two enterprise powerhouses come in at the top. Microsoft reported $10.1 billion in Productivity and Business Processes revenue, which includes Office 365, the Dynamics line and LinkedIn, the company it bought in 2016 for $26.2 billion. That $10.1 billion accounted for the top spot with 17 percent

    Salesforce was next with around 12%. It announced $3.74 billion in revenue in its most recent earnings statement with Service Cloud alone accounting for $1.02 billion in revenue, crossing that billion-dollar mark for the first time.

    Adobe came in third, good for around 10% market share, with $2.74 billion in revenue for its most recent report. Digital Media, which includes Creative Cloud and Document Cloud, accounted for the vast majority of the revenue with $1.8 billion. SAP and Oracle complete the top companies

    A growing marketWhile that number may seem low, given we are 20 years into the development of the SaaS market, it is still a significant milestone, not to be dismissed lightly. As Synergy pointed out, while the market feels mature, if finds that SaaS revenue still accounts for just 20 percent of the overall enterprise software market. There’s still a long way to go, showing as with the infrastructure side of the market, things change much more slowly than we imagine, and the market is growing rapidly, as the impressive growth rates show.

    “While SaaS growth rate isn’t as high as IaaS (Infrastructure as a Service) and PaaS (Platform as a Service), the SaaS market is substantially bigger and it will remain so until 2023. Synergy forecasts strong growth across all SaaS segments and all geographic regions,” the company wrote in its report.

    Salesforce is the only one of the top five that was actually born in the cloud. Adobe, an early desktop software company, switched to cloud in 2013. Microsoft, of course, has been a desktop stalwart for many years before embracing the cloud over the last decade. SAP and Oracle are traditional enterprise software companies, born long before the cloud was even a concept, that began transitioning when the market began shifting.

    Getting to a billionYet in spite of being late to the game, these numbers show that the market is still dominated by the old guard enterprise software companies and how difficult it is to achieve market dominance for companies born in the cloud. Salesforce emerged 20 years ago as an early cloud adherent, but of all of the enterprise SaaS companies that were started this century only ServiceNow and WorkDay show up in the Synergy list lumped in “the next 10.”

    That’s not to say there aren’t SaaS companies making some serious money, just not quite as much as the top players to this point. Jason Lemkin, CEO and founder at SaaStr, a company that invests in and supports enterprise SaaS companies, says a lot of companies are close to that $1 billion goal than you might think, and he’s optimistic that we are going to see more.

    “We will have at least 100 companies top $1 billion in ARR, probably many more. It is just math. Almost everyone IPO’ing [SaaS company] has 120-140% revenue retention. That will compound $100 million or $200 million to $1 billion. The only question is when,” he told TechCrunch.

    Chart courtesy of SaasStr


    He adds that annualized numbers are very close behind ARR numbers and it won’t take long to catch up. Yet as we have seen with some of the companies on this list, it’s still not easy to get there.

    It’s hard to develop a billion dollar SaaS company, and it takes time and patience, and perhaps some strategic acquisitions to get there, but the market trajectory continues to move upward. It will likely only grow stronger as more companies move to software in the cloud, and that bodes well for many of the players in this market, even those that didn’t show up on Synergy’s chart.

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    From: Glenn Petersen7/17/2019 5:05:41 PM
       of 1641
    A big win for Microsoft:

    Microsoft wins multibillion-dollar cloud deal from AT&T

    Published Wed, Jul 17 2019 9:00 AM EDTUpdated 4 hours ago
    Jordan Novet
    Josh Lipton
    • All AT&T Communications employees will use Microsoft 365, which includes Windows 10 and Office 365.
    • AT&T will move applications to Microsoft’s Azure cloud.
    • The deal is not exclusive, as AT&T announced a separate deal this week.

    Microsoft just scored a marquee deal for its cloud business, announcing Wednesday that AT&T will use the company’s Azure infrastructure and move most of its employees to the Microsoft 365 package of productivity apps and security services.

    The multiyear deal is worth more than $2 billion, according to a person familiar with the matter who asked not to be named because the terms are confidential. For Microsoft, which is chasing Amazon Web Services in the cloud infrastructure market, AT&T represents both a hefty buyer and a highly recognizable brand with significant data storage and computing needs for its more than 250,000 staffers.

    Beyond AT&T’s own internal use of Microsoft technology, the companies are working together on developing tools for artificial intelligence and high-speed 5G wireless, and plan to announce additional services later this year.

    “With things like 5G coming together, we absolutely think the combination of AT&T and Microsoft can really go fulfill the demand which is going to be very broad-based across what is commercially led innovation,” Microsoft CEO Satya Nadella told CNBC in an interview. “This next phase of, I’ll call it the cloud and edge and AI era, will be led by what I would broadly call more production versus just consumption.”

    Accenture estimated last year that U.S. telecom operators will spend $275 billion over seven years to build out communications networks for autonomous cars and the world of connected devices, or internet of things.

    Many of Microsoft’s big wins of late have come in the retail market, where companies like Gap, Kroger, Albertsons and Walmart’s don’t want to finance Amazon, their biggest competitor, especially as the e-commerce leader pushes further into physical retail. AT&T is a longtime customer of Microsoft and, in moving its technology to the cloud and the latest apps, underscores how Microsoft can use its existing position in the enterprise market as an advantage over AWS.

    “The ability to work with someone who has a really strong track record in how enterprises are creating, recreating themselves into a digital form is a very important part of why we selected Microsoft,” John Donovan, CEO of the AT&T Communications business, said in an interview with CNBC.

    The deal is not exclusive, and AT&T is permitted to use other cloud providers in addition to Azure, Donovan said. On Tuesday, IBM announced a deal with AT&T that involves cloud migration.

    Microsoft investors are counting on continued expansion out of Azure, which grew 73% in the latest quarter, though the company still doesn’t break out numbers from the business. Its achievements in cloud have been the driving force behind Nadella’s success since he was elevated to CEO in 2014, and have catapulted Microsoft past $1 trillion in market cap to become the world’s most valuable publicly traded company.

    Shareholders are so bullish on Microsoft’s prospects that they now value the company at more than 26 times earnings for the next 12 months, the highest multiple since 2002, according to FactSet.

    AT&T says it’s becoming a “public cloud first” company, moving applications from its data centers to Azure and employees in its communications business to Microsoft 365, which includes Windows 10, Office 365, and mobility and security services. AT&T Communications accounts for about 78% of total company revenue.

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    From: Glenn Petersen7/17/2019 8:49:40 PM
       of 1641
    Trump Expressed Concern About Pentagon Cloud-Computing Contract

    By Jennifer Jacobs, Naomi Nix, and Steven T. Dennis
    July 17, 2019

    -- Pentagon poised to give JEDI contract to Amazon or Microsoft

    -- President frustrated he was unaware of Republican concerns

    Donald Trump Photographer: Al Drago/Bloomberg

    President Donald Trump recently demanded more information about how the Pentagon crafted a massive cloud-computing contract it’s poised to award to Inc. or Microsoft Corp., in order to decide whether he should intervene.

    The Defense Department is set to give the contract, worth as much as $10 billion over ten years, to one of the two companies next month. Amazon, whose cloud-computing technology leads the market, is seen as the favorite.

    But Trump recently was made aware of letters Republican members of Congress have written to the White House and military leaders complaining that the contract’s terms froze some companies -- including Oracle Corp. -- out of the competition, according to two people familiar with the matter. Trump expressed frustration he wasn’t aware of the concerns and asked aides to show him the correspondence, the people said.

    Trump said he’s interested in looking into the circumstances of the bid but didn’t indicate he’ll try to block the contract from being awarded to one of the two finalists, they said.

    Senate Homeland Security Chairman Ron Johnson, a Wisconsin Republican who recently wrote to the Pentagon to express concerns about the contract, said in an interview that he discussed it with the president aboard Air Force One last week.

    “He wanted to understand what the issues were, what our concerns were,” Johnson said in an interview.

    Senator Marco Rubio, a Florida Republican, sent a letter to National Security Adviser John Bolton on Thursday asking him to delay the contract award, saying the bid “suffers from a lack of competition.” Trump and Rubio spoke about the contract by phone the next day, a Rubio spokesman said.

    A person familiar with the call said that it sounded as if Trump was thinking about canceling the contract.

    All of the people asked not to be identified discussing a sensitive procurement issue. Spokesmen for the White House and Pentagon didn’t immediately respond to requests for comment.

    While Trump has leaned on defense contractors to reduce costs on contracts they already hold -- and even to paint new Air Force One planes in his choice of colors -- it may be unprecedented for a president to intervene in a defense contract competition while it’s underway.

    The cloud-computing program, known as Joint Enterprise Defense Infrastructure or JEDI, has been contentious. Legacy tech companies including Oracle and International Business Machines Corp. waged a fierce lobbying and legal campaign against the Pentagon’s plan to award the contract to a single company.

    “Nothing good can come from President Trump becoming personally involved in an individual procurement, particularly one of this complexity,” said Steven Schooner, a professor of government procurement law at George Washington University. “Historically, the system has operated best with limited -- to no -- high-level political involvement.”

    Oracle lost a legal challenge last week contesting the terms of the bid and alleging the Pentagon had crafted unfair requirements and that there were conflicts of interest involving Amazon. Republican lawmakers have taken up Oracle’s cause, pressuring the White House to intervene in the Pentagon project.

    Oracle at one point coordinated with at least seven other companies including Microsoft and SAP America to try to block Amazon from winning the entire contract, Bloomberg News has reported. Amazon has already won a contract with the Central Intelligence Agency.

    Oracle declined to comment for the story.

    In April 2018, Oracle Corp. Chief Executive Officer Safra Catz dined with Trump at the White House and complained that it seemed designed for Amazon to win, Bloomberg has reported. The final requirements for the contract were released in July of that year.

    The White House raised concerns about the contract with senior Pentagon leaders while they were still drafting the final requirements for the deal, according to a person familiar with the matter.

    (Updates with expert comment in 12th paragraph. The spelling of Oracle CEO Safra Catz’s name was corrected in a previous version of the story.)

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