News of Note: Week of October 15, 2017
For your weekend reading pleasure, take a look at our recap of this week’s news in enterprise IT.
HPE Dips into its Savings
On Wednesday, Hewlett Packard Enterprise’s board of directors approved a $2B stock buyback for next fiscal year and an additional $500k in dividends, dipping into its nearly $7B in cash reserves. The company has been going through an identity crisis of sorts, announcing this week that it’s backing off from commoditized servers to the big cloud computing customers. Simultaneously, the company has madeI heavy investments in analytics and storage through a series of acquisitions this year, including hyperconverged infrastructure provider Simplivity, Nimble Storage, cloud analytics provider Cloud Cruiser, and Niara, a security analytics provider. While its traditional hardware-focused counterpart Hewlett Packard Inc. recently forecasted a 5 percent quarterly dividend increase for FY 2018 stemming from a focus on emerging-tech hardware such as 3D printing devices, Meg Whitman’s HPE expects a paltry annual organic revenue growth of 0% to 1% annual organic revenue growth. But HPE, spun off from Hewlett Packard in 2015, is still very much in a nascent period, and a little bit of wobbling as it finds its groove doesn’t seem that unusual, especially as it’s still trying to figure out how the leverage the ever-evolving cloud market. 2018 is sure to be an interesting—and defining—year for the whippersnapper company as it matures and finds its footing.
Top Ten in Fortune’s Future 50 Shows Every Company Is a Tech Company
Fortune released its list of the 50 companies it thinks are poised for “breakout growth” next year, and the results, while notable, aren’t all that surprising for anyone not living under a rock. The list separates companies as “leaders”—organizations with a market value above $20B—and “challengers.” Each company was given a score based on its market potential and its capacity in four areas: strategy, people, technology and investment, and corporate structure. If you’re looking for business trends that provide a crystal ball into the future of the market, look no further than the top 10 in each category:
The few organizations on this list that aren’t explicitly technology companies are leading their fields because of their emphasis on tech. Note the big presence of healthcare companies on this list. It’s looking as though partners specializing in this sector can write their own ticket—and those still searching for a niche could do worse than signing up for the burgeoning health-tech field.
Salesforce CEO Mark Benioff on What It Means to Be ‘Innovative’
Judging from its No. 1 spot on the aforementioned Fortune Future 50 list, CEO Mark Benioff clearly seems to be doing something right. Fortune’s Adam Lashinsky sat down with Benioff to find the secret to his success: weaving innovation into Salesforce’s very corporate culture. “I think our top three are a technology model which is now known as the cloud, the subscription business model, and our 1-1-1 [philanthropic] model [that gives away 1 percent each of equity, products, and employee hours],” Benioff told Lashinsky. The company has excelled at predicting market trends, jumping on emerging technology, influencing regulatory bodies, and most especially, product marketing. Read the full interview here, and let us know in the comments below if you think Salesforce and Benioff live up to Lashinsky’s praise.
Cisco Adds Muscle to One Acquisition with Another
Cisco announced this week that it’s acquired machine learning startup Perspica to beef up its acquisition of AppDynamics. San Jose-based Perspica boasts 20 employees and has raised about $8.85 million in funding—small potatoes compared to many of the networking giant’s recent buys. AppDynamics’ forte is finding errors in corporate software, while Perspica’s forte is using machine learning to detect flaws in corporate infrastructure. As we wrote earlier this week, Cisco is pivoting hard away from physical routers and switches to software and services, and the combination of these two acquisitions will position Cisco to compete against other monitoring services like Splunk.
IBM’s Losing Streak Continues—Kinda
Big Blue posted its 22nd straight quarter of declining revenue this week (that’s gotta be some kind of record), but things are looking up. The decline of 0.4 percent to $19.15B beat analysts’ predictions of $18.6B, causing a three percent rise in stock prices in after hours trading. IBM’s heavy investments in emerging technology like mobile, analytics, cloud computing, and security are yielding big dividends; those strategic imperatives showed an impressive 11 percent year over year. Cloud revenue alone was up a full 20 percent from 2017. IBM announced an artificial intelligence collaboration with MIT in the third quarter, as well as a multi-organization blockchain collaboration. Look for Big Blue’s continued investments in these technologies to pay off in 2018. Hopefully, its partner program will evolve to reflect its new emphasis and the increasing demand from the channel for a simpler, more streamlined PartnerWorld.