Tag Archives: acquisition

Salesforce Datorama acquisition to bolster Marketing Cloud

The Salesforce Datorama acquisition is expected to enhance the Salesforce Marketing Cloud system and better compete with Adobe — the CRM software vendor’s main competitor in the marketing space.

The Salesforce Datorama acquisition marks the fourth purchase for the vendor this year, following its acquisitions of Attic Labs, CloudCraze and MuleSoft. The cost of buying Datorama, according to reports, was about $800 million.

Datorama uses AI and machine learning to provide marketing intelligence and analytics to help organizations identify which campaigns work best and what the next best marketing tactic should be. Salesforce appears to be looking to the Israel-based company’s technology to bolster its Einstein AI-backed business intelligence software.

The move will strengthen Salesforce’s portfolio in marketing and analytics, said Ray Wang, principal analyst and founder of Constellation Research.

“Datorama looks at every piece of analytics around the campaign to figure out why one was more successful than another. Salesforce has been building out its Marketing Cloud and [has] been doing specific acquisitions to bolster its marketing and ad-tech capabilities,” Wang said.

Not all observers think the Salesforce Datorama acquisition was the best move to help with marketing analytics.

Datorama customers have used the product more for reporting, rather than analytics, according to Tina Moffett, senior analyst at Forrester Research.

“Datorama’s strong suit is in its ability to connect disparate data sources — from Facebook and ad servers and email providers — into one central system, and it uses AI to do that,” Moffett said. “A lot of the organizations that we’ve talked to use Datorama as a central reporting and dashboard tool.”

Building capabilities through acquisition

When you see this acquisition, you have to think the next thing for Salesforce is ad tech.
Ray Wangprincipal analyst and founder of Constellation Research

Salesforce has been visibly working to improve Marketing Cloud and has done so mainly through acquisitions.

That campaign started with acquiring ExactTarget in 2013 and turning it into the core Marketing Cloud system. Salesforce then bought Krux in 2016 to improve Marketing Cloud’s data management capabilities and soon renamed Krux to Salesforce DMP.

Salesforce’s acquisition of Datorama AI marketing software fits the same theme, but the purchase may have surprised some.

“Salesforce’s [approach] is to build capabilities through acquisitions,” Moffett said. “For them to focus on marketing performance measurement and then acquire a company wasn’t that big of a shock. I think what was a big of a surprise was that it was Datorama.”

Surprise or not, Salesforce appears to have big plans for Datorama.

“Salesforce’s acquisition of Datorama will enhance Salesforce’s Marketing Cloud with expanded data integration, intelligence and analytics, enabling marketers to unlock insights across Salesforce data and the myriad of technologies used in today’s marketing and consumer engagement ecosystem,” Ran Sarig, Datorama CEO and co-founder, wrote in a blog post.

Meanwhile, Wang said he could see the Salesforce Datorama acquisition laying the groundwork for another Salesforce product: an advertising cloud.

“When you see this acquisition, you have to think the next thing for Salesforce is ad tech,” Wang said.

Salesforce graphic with Marketing Cloud logo
Salesforce acquired Datorama, an AI marketing analytics company, to help bolster its Marketing Cloud (pictured).

Salesforce sets sights on Adobe

Salesforce’s focus on strengthening Marketing Cloud also is apparently aimed at Adobe — another marketing software giant.

The two software goliaths have battled fiercely in recent years, and the Salesforce Datorama acquisition should be viewed in the context of that technological arms race, Wang said.

“From a Marketing Cloud perspective, it’s Salesforce and Google versus Microsoft and Adobe, and that’s what people need to recognize when considering their investments,” he said.

The big tech leaders all are trying to make it easier for organizations to connect the dozens of marketing tools that most large enterprises use.

“The bigger issue is the fact that most organizations run 40 to 50 martech solutions and want to know how to consolidate [their data],” Wang said. “Everyone is looking for one vendor to make this easier, and the integrations that Datorama has are important and allow you to connect those different pieces.”

Missions acquisition will simplify Slack integrations

Slack plans to use the technology gained from its acquisition of Missions, a division of the startup Robots & Pencils, to make it easier for non-developers to customize workflows and integrations within its team collaboration app.

A Slack user with no coding knowledge can use Missions to build widgets for getting more work done within the Slack interface. For example, a human resources department could use a Missions widget to track and approve interviews with job applicants.

The Missions tool could also power an employee help desk system within Slack, or be used to create an onboarding bot that keeps new hires abreast of the documents they need to sign and the orientations they must attend. 

“In the same way that code libraries make it easier to program, Slack is trying to make workflows easier for everyone in the enterprise,” said Wayne Kurtzman, an analyst at IDC. “Without training, users will be able to create their own automated workflows and integrate with other applications.”

Slack said it would take a few months to add Missions to its platform. It will support existing Missions customers for free during that time. In a note to its 200,000 active developers, Slack said the Missions purchase would benefit them too, by making it easier to connect their Slack integrations to other apps.

Slack integrations help startup retain market leadership

The acquisition is Slack’s latest attempt to expand beyond its traditional base of software engineers and small teams. More than 8 million people in 500,000 organizations now use the platform, which was launched in 2013, and 3 million of those users have paid accounts.

With more than 1,500 third-party apps available in its directory, Slack has more outside developers than competitors such as Microsoft Teams and Cisco Webex Teams. The vendor has sought to capitalize on that advantage by making Slack integrations more useful.

Earlier this year, Slack introduced a shortcut that lets users send information from Slack to business platforms like Zendesk and HubSpot. Slack could be used to create a Zendesk ticket asking the IT department for a new desktop monitor, for example.

The automation of workflows, including through chatbots, is becoming increasingly important to enterprise technology buyers, according to Alan Lepofsky, an analyst at Constellation Research, based in Cupertino, Calif.

But it remains to be seen whether the average Slack user with no coding experience will take advantage of the Missions tool to build Slack integrations.

“I believe the hurdle in having regular knowledge workers create them is not skill, but rather even knowing that they can, or that they should,” Lepofsky said.

Tintri acquisition proposal leaves customers in limbo

While DataDirect Networks awaits the outcome of its proposed acquisition of Tintri assets, Tintri customers wonder what it all means for them.

High-performance computing (HPC) storage specialist DataDirect Networks (DDN) believes the Tintri acquisition is a way to appeal to mainstream enterprise IT shops. DDN made a bid to acquire Tintri’s assets for an undisclosed sum after Tintri filed for bankruptcy in early July — barely a year after going public on the Nasdaq.

DDN sees a way to broaden its appeal with Tintri’s flash-based, analytics-driven storage arrays, but the acquisition isn’t yet certain. The two vendors have signed a letter of intent, but the proposed sale won’t be finalized until the completion of a court-ordered bidding process. That means bidders could emerge to challenge DDN.

Users react to planned Tintri acquisition

The uncertainly of the Tintri acquisition affects its customers, who remain unsure of what it means for their maintenance contracts. DDN declined to estimate how long the bidding process might take.

That leaves Tintri customers bracing for what comes next. The city of Lewiston, Idaho, used Tintri arrays to replace legacy storage. Systems administrator Danny Santiago said the hybrid storage was a “magic cure-all” for labor-intensive management. Lewiston’s storage includes a Tintri T620 and two T820 hybrid arrays for primary storage, backup and replication.

“I spent about half my day fighting LUN management. When we got the Tintri, I got that time back,” Santiago said. “I can go six months and never have to touch the Tintri storage. The interface is beautiful. It gives you metrics to let you know if a problem is [tied to] storage, the network or on the Windows OS side.”

Now, Santiago said he doesn’t know what to expect. His agency is in year one of an extended three-year Tintri support contract for the T620.

“Financially, we’re not in a position to change our storage,” he said. “We put a lot of money into these Tintri boxes, and we need to get the life expectancy out of them.”

The Fay Jones School of Architecture and Design at the University of Arkansas installed Tintri several years ago to replace aging EMC Clariion storage — the forerunner to the Dell EMC VNX SAN array. Scott Zemke, the Fayetteville, Ark., school’s director of technology, said Tintri competitors have already started knocking on his door.

“Quite honestly, we rarely have issues with the Tintri arrays. But, of course, we’re looking at contingency plans if we have to do a refresh. One vendor is offering ridiculously stupid deals to trade in our Tintri storage, so it will be an interesting next couple of months,” Zemke said.

“I know Tintri really wanted the business to work, but it seems like they have just had management problem after management problem. Hopefully, DDN will continue to support the stuff. We have DDN arrays in our HPC data center, and they’re a great company to work with, too,” Zemke said.

Is predictive analytics key to Tintri acquisition?

According to Tintri’s securities filings, DDN’s bid would encompass most of Tintri’s assets, including all-flash and hybrid virtualization arrays. But the predictive Tintri Analytics platform may have a greater impact on DDN’s business. The SaaS-based data lake provides real-time analytics and preventive maintenance. Customers can automate capacity and performance requirements for each virtual machine.

Predictive analytics is considered a valuable feature for modern storage arrays. Hewlett Packard Enterprise considered Nimble Storage’s InfoSight analytics a key driver of its $1.2 billion acquisition of Nimble in 2017, and HPE has since integrated InfoSight into its flagship 3PAR arrays. DDN could follow the same playbook by incorporating Tintri Analytics into its other products.

Financially, we’re not in a position to change our storage. We put a lot of money into these Tintri boxes, and we need to get the life expectancy out of them.
Danny Santiagosystem administrator for the city of Lewiston, Idaho

Tintri’s technology would help DDN serve mainstream enterprises seeking to implement AI and machine learning, said Kurt Kuckein, senior director of marketing at DDN, based in Chatsworth, Calif.

“We have plenty of organizations where we work with data scientists or the analytics team, but we really haven’t had a product for enterprise IT shops. Adding Tintri gives us a well-baked technology and a large installed base,” Kuckein said.

In the near term, DDN plans to maintain the Tintri brand as a separate engineering division. Real-time Tintri analytics eventually could wind up in branded AI ExaScaler turnkey appliances, he said.

Tintri Analytics is part of the Tintri Global Center management portal. The intelligence can predict hardware failures and automate support tickets. Tintri typically shipped replacement parts to customers by the next business day.

According to George Crump, president of IT analyst firm Storage Switzerland, Tintri’s analytics are “as good, if not better,” than Nimble’s InfoSight.

“DDN is probably the perfect acquirer for Tintri,” Crump said. “It’s profitable. It has a massive amount of storage experience. And there’s almost no overlap between the DDN and Tintri product. All the Tintri stuff would be net-new business.”

Will DDN breathe new life into Tintri storage?

The proposed Tintri acquisition follows a rocky period for the vendor. Tintri filed for Chapter 11 protection this month — just weeks after the one-year anniversary of its initial public offering (IPO). Some experts saw going public as a desperation move after Tintri failed to secure additional private investment. Tintri also went through two CEOs between April and June.

Tintri initially hoped for a share price in the range of $11.50 to raise about $109 million in June 2017, but its IPO opened at $7 and raised only $60 million. Shares rose no higher than $7.75, and Nasdaq eventually delisted Tintri after its shares dropped to below $1 for 30 consecutive trading sessions.

Aside from investors’ lukewarm reception, several strategic missteps conspired to doom Tintri. Crump said the company undercut its key differentiators of analytics and quality of service (QoS) when it launched an all-flash array in 2015.

“Tintri’s marketing message should have been, ‘Don’t buy an all-flash array, and here’s why,'” Crump said. “DDN should get rid of the all-flash model and just focus on selling the hybrid arrays. When your system is faster than all of your workloads combined, then you don’t really need QoS. That would get people’s attention.”

Broadcom acquisition of CA seeks broader portfolio

The out-of-the-blue Broadcom acquisition of CA Technologies has analysts scratching their heads about how the two companies’ diverse portfolios weave together strategically, and how customers might feel the impacts — beneficial or otherwise.

CA’s strength in mainframe and enterprise infrastructure software, the latter of which is a growing but fragmented market, gives chipmaker Broadcom another building block to create an across-the-board infrastructure technology company, stated Hock Tan, president and CEO of Broadcom.

But vaguely worded statements from both companies’ execs lent little insight into potential synergies and strategic short- or long-term goals of the $18.9 billion deal.

One analyst believes the deal is driven primarily by financial and operational incentives, and whatever technology synergies the two companies create are a secondary consideration for now.

“The operating margins from mainframes are very healthy and that fits very well with Broadcom’s financial model,” said Stephen Elliot, an analyst at IDC.

The bigger issue will be Broadcom’s ability to manage the diverse software portfolio of a company the size of CA. To date, Broadcom’s acquisition strategy has focused almost exclusively on massive deals for hardware companies, in areas such as storage, wireless LAN and networking. “The question is, is this too far of a reach for them? Customers are going to have to watch this closely,” Elliot said.

The overall track record of acquisitions that combine hardware-focused companies and large software companies is not good, Elliot noted. He pointed to the failures of Intel’s acquisition of LANDesk and Symantec’s purchase of Veritas.

Broadcom’s ability to manage CA’s complex and interwoven product portfolio is another concern.

The question is, is this too far of a reach for [Broadcom]? Customers are going to have to watch this closely.
Stephen Elliotanalyst, IDC

“As far as I can see, Broadcom has little or no visible prior execution or knowledge about a complicated and nuanced software and technology arena such as the one CA addresses … that includes DevOps, agile and security,” said Melinda Ballou, research director for IDC’s application life-cycle management program. “Infrastructure management would be more in their line of work, but still very different.”

Broadcom’s acquisition of CA also fills a need to diversify, particularly in the aftermath of its failed attempt to buy Qualcomm earlier this year, which was blocked by the Trump administration for national security reasons.

“They need to diversify their offerings to be more competitive given they primarily focus on chips, networking and the hardware space,” said Judith Hurwitz, president and CEO of Hurwitz & Associates LLC. “CA has done a lot of work on the operational and analytics side, so maybe [Broadcom] is looking at that as a springboard into the software enablement space.”

Hurwitz does see opportunities for both companies to combine their respective products, particularly in network management and IoT security. And perhaps this deal portends more acquisitions will follow, potentially among companies that compete directly or indirectly with CA. Both Broadcom and CA have pursued growth through numerous acquisitions in recent years.

“You could anticipate Broadcom goes on a spending spree, going after other companies that are adjacent to what CA does,” Hurwitz said. “For example, there was talk earlier this year that CA and BMC would merge, so BMC could be a logical step with some synergy there.”

Cisco acquires July Systems for its location, analytics services

Cisco announced this week the acquisition of a company that provides cloud-based location services through retailers’ Wi-Fi networks, while Extreme Networks and Ruckus Networks launched improvements to their wired and wireless LANs.

Cisco plans to use July Systems technology to improve its enterprise Wi-Fi platform for indoor location services. July, a privately held company headquartered in Burlingame, Calif., sells its product by subscription.

July Systems’ platform integrates with a company’s customer management system to identify people walking into a retail store or mall. The July software can then interact with the people through text messages, email or push notifications.

The system also continuously maps the physical location of retail customers and uses the information to calculate their behavior patterns. July Systems software can also send collected data to business intelligence applications for further analysis.

Before the acquisition, July Systems was a Cisco partner. The company made its location services and analytics available through the Cisco Connected Mobile Experiences. CMX is a set of location-based products that use Cisco’s wireless infrastructure.

Cisco plans to complete the acquisition by the end of October. The company did not release financial details.

Extreme, Ruckus releases

Extreme Networks has introduced wired and wireless LAN infrastructure called Smart OmniEdge that incorporates technology Extreme acquired when it bought Avaya’s enterprise networking business last year.

The latest release includes an on-premises version of Extreme’s cloud-based management application, called ExtremeCloud. Both versions provide a single console for overseeing the vendor’s wired and wireless infrastructure, including access points and edge switches. They are also engineered for zero-touch provisioning, enabling customers to configure and activate devices without manual intervention.

Other infrastructure additions include hosted software for radio frequency management on the wireless network, which in today’s workplace has to serve a variety of devices, including PCs, mobile phones, printers and projectors. Automated features in the technology include access point tuning and optimization, load balancing and troubleshooting.

Smart OmniEdge utilizes Avaya’s software-defined networking product for simpler provisioning, management and troubleshooting of switches and access points. Extreme has also added APIs to integrate third-party network products and hardware adapters that companies can plug into medical devices to download and enforce policies.

Extreme has designed Smart OmniEdge for networking a campus, hotel, healthcare facility and large entertainment venue. The company’s wired and wireless networking portfolio incorporates technology from acquisitions over several years, including wireless LAN vendor Zebra Technologies, Avaya’s software-based networking technology and Brocade’s data center network products.

Extreme’s acquisition strategy helped boost sales in its latest quarter ended in May by 76% to $262 million. However, results for the quarter, coupled with modest guidance for the current quarter, disappointed analysts, driving its stock down by 19.5%, according to the financial site Motley Fool.

Meanwhile, Ruckus Networks, an Arris company, released a new version of the operating system for its SmartZone controllers for the wired and wireless LAN. SmartZoneOS 5 provides a central console for controlling, managing and securing Ruckus access points and switches.

SmartZoneOS customers can build a single network control cluster to serve up to 450,000 clients. The controller also contains RESTful APIs, so managed service providers can invoke SmartZoneOS features and configurations.

In February, Ruckus launched SmartZoneOS software that provides essential management and security features for IoT devices. The software works in conjunction with a Ruckus IoT module plugged into the USB port on each of the company’s access points.

Jaguar Land Rover, BI Worldwide share GitLab migration pros and cons

Microsoft’s proposed acquisition of popular code repository vendor GitHub also thrust competitor GitLab into the spotlight. A quarter-million customers tried to move code repositories from GitHub to GitLab last week in the wake of the Microsoft news, a surge that crashed the SaaS version of GitLab.

Enterprises with larger, more complex code repositories will need more than a few days to weigh the risks of the Microsoft acquisition and evaluate alternatives to GitHub. However, they were preceded by other enterprise GitLab converts who shared their experience with GitLab migration pros and cons.

BI Worldwide, an employee engagement software company in Minneapolis, considered a GitLab migration when price changes to CloudBees Jenkins Enterprise software drove a sevenfold increase in the company’s licensing costs for both CloudBees Jenkins Enterprise and GitHub Enterprise.

GitLab offers built-in DevOps pipeline tools with its code repositories in both SaaS and self-hosted form. BI Worldwide found it could replace both GitHub Enterprise and CloudBees Jenkins Enterprise with GitLab for less cost, and made the switch in late 2017.

“GitLab offered better functionality over GitHub Enterprise because we don’t have to do the extra work to create web hooks between the code repository and CI/CD pipelines, and its CI/CD tools are comparable to CloudBees,” said Adam Dehnel, product architect at BI Worldwide.

GitLab pipelines
GitLab’s tools include both code version control and app delivery pipelines.

Jaguar Land Rover-GitLab fans challenge Atlassian incumbents

Automobile manufacturer Jaguar Land Rover, based in London, also uses self-hosted GitLab among the engineering teams responsible for its in-vehicle infotainment systems. A small team of three developers in a company outpost in Portland, Ore., began with GitLab’s free SaaS tool in 2016, though the company at large uses Atlassian’s Bitbucket and Bamboo tools.

As of May 2018, about a thousand developers in Jaguar Land Rover’s infotainment division use GitLab, and one of the original Portland developers to champion GitLab now hopes to see it rolled out across the company.

Sometimes vendors … get involved with other parts of the software development lifecycle that aren’t their core business, and customers get sold an entire package that they don’t necessarily want.
Chris Hillhead of systems engineering, Jaguar Land Rover’s infotainment systems

“Atlassian’s software is very good for managing parent-child relationships [between objects] and collaboration with JIRA,” said Chris Hill, head of systems engineering for Jaguar Land Rover’s infotainment systems. “But sometimes vendors can start to get involved with other parts of the software development lifecycle that aren’t their core business, and customers get sold an entire package that they don’t necessarily want.”

A comparison between tools such as GitLab and Bitbucket and Bamboo largely comes down to personal preference rather than technical feature gaps, but Hill said he finds GitLab more accessible to both developers and product managers.

“We can give developers self-service capabilities so they don’t have to chew up another engineer’s time to make merge requests,” Hill said. “We can also use in-browser editing for people who don’t understand code, and run tutorials with pipelines and rundeck-style automation jobs for marketing people.”

Jaguar Land Rover’s DevOps teams use GitLab’s collaborative comment-based workflow, where teams can discuss issues next to the exact line of code in question.

“That cuts down on noise and ‘fake news’ about what the software does and doesn’t do,” Hill said. “You can make a comment right where the truth exists in the code.”

GitLab offers automated continuous integration testing of its own and plugs in to third-party test automation tools. Continuous integration testing inside GitLab and with third-party tools is coordinated by the GitLab Runner daemon. Runner will be instrumental to deliver more frequent software updates over the air to in-car infotainment systems that use a third-party service provider called Redbend, which will mean Jaguar Land Rover vehicle owners will get automatic updates to infotainment systems without the need to go to a dealership for installation. This capability will be introduced with the new Jaguar I-Pace electric SUV in July 2018.

Balancing GitLab migration pros and cons

BI Worldwide and Jaguar Land Rover both use the self-hosted version of GitLab’s software, which means they escaped the issues SaaS customers suffered with crashes during the Microsoft GitHub exodus. They also avoided a disastrous outage that included data loss for GitLab SaaS customers in early 2017.

Still, their GitLab migrations have come with downsides. BI Worldwide jumped through hoops to get GitLab’s software to work with AWS Elastic File System (EFS), only to endure months of painful conversion from EFS to Elastic Block Store (EBS), which the company just completed.

GitLab never promised that its software would work well with EFS, and part of the issue stemmed from the way AWS handles EFS burst credits for performance. But about three times a day, response time from AWS EFS in the GitLab environment would shoot up from an average of five to eight milliseconds to spikes as high as 900 milliseconds, Dehnel said.

“EBS is quite a bit better, but we had to get an NFS server setup attached to EBS and work out redundancy for it, then do a gross rsync project to get 230 GB of data moved over, then change the mount points on our Rancher [Kubernetes] cluster,” Dehnel said. “The version control system is so critical, so things like that are not taken lightly, especially as we also rely on [GitLab] for CI/CD.”

GitLab is working with AWS to address the issues with its product on EFS, a company spokesperson said. For now, its documentation recommends against deployment with EFS, and the company suggests users consider deployments of GitLab to Kubernetes clusters instead.

Microsoft to acquire GitHub for $7.5 billion | Stories

Acquisition will empower developers, accelerate GitHub’s growth and advance Microsoft services with new audiences

Chris Wanstrath, Satya Nadella and Nat Friedman
From left: Chris Wanstrath, Github CEO and co-founder; Satya Nadella, Microsoft CEO; and Nat Friedman, Microsoft corporate vice president, Developer Services

REDMOND, Wash. — June 4, 2018 Microsoft Corp. on Monday announced it has reached an agreement to acquire GitHub, the world’s leading software development platform where more than 28 million developers learn, share and collaborate to create the future. Together, the two companies will empower developers to achieve more at every stage of the development lifecycle, accelerate enterprise use of GitHub, and bring Microsoft’s developer tools and services to new audiences.

“Microsoft is a developer-first company, and by joining forces with GitHub we strengthen our commitment to developer freedom, openness and innovation,” said Satya Nadella, CEO, Microsoft. “We recognize the community responsibility we take on with this agreement and will do our best work to empower every developer to build, innovate and solve the world’s most pressing challenges.”

Under the terms of the agreement, Microsoft will acquire GitHub for $7.5 billion in Microsoft stock. Subject to customary closing conditions and completion of regulatory review, the acquisition is expected to close by the end of the calendar year.

GitHub will retain its developer-first ethos and will operate independently to provide an open platform for all developers in all industries. Developers will continue to be able to use the programming languages, tools and operating systems of their choice for their projects — and will still be able to deploy their code to any operating system, any cloud and any device.

Microsoft Corporate Vice President Nat Friedman, founder of Xamarin and an open source veteran, will assume the role of GitHub CEO. GitHub’s current CEO, Chris Wanstrath, will become a Microsoft technical fellow, reporting to Executive Vice President Scott Guthrie, to work on strategic software initiatives.

“I’m extremely proud of what GitHub and our community have accomplished over the past decade, and I can’t wait to see what lies ahead. The future of software development is bright, and I’m thrilled to be joining forces with Microsoft to help make it a reality,” Wanstrath said. “Their focus on developers lines up perfectly with our own, and their scale, tools and global cloud will play a huge role in making GitHub even more valuable for developers everywhere.”

Today, every company is becoming a software company and developers are at the center of digital transformation; they drive business processes and functions across organizations from customer service and HR to marketing and IT. And the choices these developers make will increasingly determine value creation and growth across every industry. GitHub is home for modern developers and the world’s most popular destination for open source projects and software innovation. The platform hosts a growing network of developers in nearly every country representing more than 1.5 million companies across healthcare, manufacturing, technology, financial services, retail and more.

Upon closing, Microsoft expects GitHub’s financials to be reported as part of the Intelligent Cloud segment. Microsoft expects the acquisition will be accretive to operating income in fiscal year 2020 on a non-GAAP basis, and to have minimal dilution of less than 1 percent to earnings per share in fiscal years 2019 and 2020 on a non-GAAP basis, based on the expected close time frame. Non-GAAP excludes expected impact of purchase accounting adjustments, as well as integration and transaction-related expenses. An incremental share buyback, beyond Microsoft’s recent historical quarterly pace, is expected to offset stock consideration paid within six months after closing. Microsoft will use a portion of the remaining ~$30 billion of its current share repurchase authorization for the purchase.

Simpson Thacher & Bartlett LLP is acting as legal advisor to Microsoft. Morgan Stanley is acting as exclusive financial advisor to GitHub, while Fenwick & West LLP is acting as its legal advisor.

Media & Analyst Conference Call

Nadella, Friedman, Wanstrath and Microsoft Chief Financial Officer Amy Hood will host a joint conference call for media today, June 4, 2018, at 7 a.m. Pacific/10 a.m. Eastern to discuss this transaction. The call will be available to international callers at +1 (201) 689-8023 (no password required), to U.S. callers at (877) 407-0666 (no password required), or via webcast at https://edge.media-server.com/m6/p/eudfciq3 at that time. More information is available on http://news.microsoft.com.

Additional details will be available when the acquisition closes.

About GitHub

GitHub is the developer company. We make it easier for developers to be developers: to work together, to solve challenging problems, to create the world’s most important technologies. We foster a collaborative community that can come together — as individuals and in teams — to create the future of software and make a difference in the world.

About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.

For more information, press only:

Microsoft Media Relations, WE Communications, (425) 638-7777,

rrt@we-worldwide.com 

Forward looking statements

This press release contains forward-looking statements, which are any predictions, projections or other statements about future events based on current expectations and assumptions that are subject to risks and uncertainties. The potential risks and uncertainties include, among others, that the expected financial and other benefits from the GitHub transaction may not be realized, including because of: the risk that the transaction may not be completed in a timely manner or at all; any restrictions or limitations imposed by regulatory authorities; the impact of the acquisition on GitHub’s developer community and enterprise customers; the extent to which we achieve anticipated financial and buyback targets; the impact of management and organizational changes on GitHub’s business; the impact on GitHub employees and our ability to retain key personnel; our effectiveness in integrating the GitHub platform and operations with Microsoft’s business; and our ability to realize our broader strategic and operating objectives. Actual results may differ materially from the forward-looking statements because of these and other risks and uncertainties of our business, which are described in our filings with the Securities and Exchange Commission (“SEC”), including our Forms 10-K and 10-Q. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Microsoft undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center at http://news.microsoft.com. Web links, telephone numbers and titles were correct at time of publication, but may have changed. For additional assistance, journalists and analysts may contact Microsoft’s Rapid Response Team or other appropriate contacts listed at http://news.microsoft.com/microsoft-public-relations-contacts.

Microsoft scoops up NAS vendor Avere for hybrid cloud services

Microsoft moved to bolster its cloud storage capabilities with the acquisition of NAS vendor Avere Systems, giving it a high-performance file system to manage unstructured data in hybrid clouds.

The Pittsburgh-based NAS vendor Avere’s OS file system is incorporated in FXT Edge filers in all-flash or spinning disk versions for on-premises or hybrid cloud configurations. Avere also provides a virtual appliance, the Virtual FXT Edge filers, which are available for Amazon Web Services (AWS) and the Google Cloud Platform. 

The terms of the deal were not disclosed.

Microsoft disclosed the acquisition in a blog post on its website but declined an interview request to provide more details about its plans for the cloud NAS vendor. Microsoft acquired early cloud NAS vendor StorSimple in 2012, and gives that technology to Azure subscribers to tier data into the cloud.

However, Avere CEO Ron Bianchini wrote in a company blog post that the two companies’ “shared vision” is to use Avere technology “in the data center, in the cloud and in hybrid cloud storage …” while tightly integrating it with Azure.

“Avere and Microsoft recognize that there are many ways for enterprises to leverage data center resources and the cloud,” Bianchini wrote. “Our shared vision is to continue our focus on all of Avere’s use cases — in the data center, in the cloud and in hybrid cloud storage and cloud bursting environments. Tighter integration with Azure will result in a much more seamless experience for our customers.”

Avere was founded in 2008 as a company that focused on the data center with its FXT Core Filers that used flash to accelerate network-attached storage (NAS) performance on disk systems. The company later transitioned to the cloud with its Avere FXT Edge Filers that served as NAS public clouds, allowing customers to connect on-premises storage to AWS, Google Cloud and Azure services.

In addition to NFS and SMB protocols, the Avere Cloud NAS appliance supports object storage from IBM Cleversafe, Western Digital, SwiftStack and others through its C2N Cloud-Core NAS platform.

The only other vendor that offers end-to-end is Oracle. But Oracle does not have a global namespace. Avere has a global namespace.
Marc Staimerfounder, Dragon Slayer Consulting

The NAS vendor also sells FlashCloud, which runs on FXT Edge Filers with object APIs to connect to public and private clouds. The systems can be clustered so that cloud-based NAS can scale on premises while also providing high-availability access to data in the cloud. Customers can use FlashCloud software as a file system for object storage and move data to the cloud without requiring a gateway.

“They provide a true NAS filer,” said Marc Staimer, founder of Dragon Slayer Consulting. “They provide a complete, end-to-end package. The only other vendor that offers end-to-end is Oracle. But Oracle does not have a global namespace. Avere has a global namespace.”

Avere founders Bianchini, CTO Michael Kazar and technical director Daniel Nydick came from NetApp, which acquired their previous company Spinnaker Networks in 2004 for its clustered NAS technology.

Some of Avere’s customers include Sony Pictures’ Imageworks, animation studio Illumination Mac Guff, the Library of Congress, Johns Hopkins University and Teradyne Inc. The company is private so it does not disclose revenue, but a source close to the vendor put its bookings at $7 million in the fourth quarter of 2016 and $22 million for the year. Those bookings were up from $4.8 million in the fourth quarter and $14.5 million in 2015.

In March of 2017, Google became an Avere investor during the company’s $14 million Series E funding round. Avere raised about $100 million in total funding. Previous investors include Menlo Ventures, Norwest Venture Partners, Lightspeed Venture Partners, Tenaya Capital and Western Digital Technologies.

The Avere team will continue to work out of its Pittsburgh office for Microsoft.

Level 3-CenturyLink merger could open doors for UC partners

CenturyLink’s $34 billion acquisition of Level 3 Communications is complete, and the two telecom providers have merged under the CenturyLink brand. But questions linger over what will become of Level 3’s unified communications partnerships following the CenturyLink merger.

Level 3, based in Broomfield, Colo., announced a partnership with Amazon in July to offer the Amazon Chime communications service. Amazon chose Level 3 and Vonage to deliver Chime as a managed service with Level 3 targeting medium to large businesses. Level 3 also has UC partnerships with vendors such as AVI-SPL and Unify Square.

CenturyLink, based in Monroe, La., acquired Level 3 to expand its reach in the business communications market and compete against larger providers, such as AT&T and Verizon. UC partnerships could thrive as the Level 3-CenturyLink merger gives partners like Amazon a broader range of customers to target, according to Frost & Sullivan analyst Michael Brandenburg.

However, the CenturyLink merger with Level 3 is still in its early days. CenturyLink will take its time to refine the company’s combined portfolio with as little impact to customers as possible, he said.

CenturyLink is “willing to take on multiple solutions that fit what their customers need or want,” Brandenburg said. “I don’t think they’ll put partnerships in jeopardy at this point.”

RingCentral revenue on the rise

RingCentral’s revenue in the third quarter grew to $129.8 million, a 34% increase from the previous year. RingCentral CEO Vlad Shmunis attributed the results to growth in the unified communications as a service (UCaaS) provider’s midmarket and enterprise business, as well as its channel partners.

RingCentral, based in Belmont, Calif., also saw its software subscription revenue grow 30% year over year to $119.4 million. The vendor’s shares have more than doubled since the start of this year.   

A recent report from Synergy Research Group found that strong adoption was driving the UCaaS market. The report named RingCentral a market share leader based on quarterly revenues and subscriber seats. RingCentral was also named a market leader in the latest Gartner Magic Quadrant for UCaaS.

RingCentral has expanded its services this year by introducing new integrations with Google G Suite, Amazon Alexa and Slack, offering expanded coverage in Latin America and adding new quality of service analytics.

Vidyo revamps product portfolio

Vidyo has streamlined its product portfolio under its VidyoCloud platform. VidyoCloud supports two key platforms: VidyoConnect and VidyoEngage, as well as the Vidyo.io platform-as-a-service offering.

VidyoCloud offers a new user interface for a consistent experience across endpoints. It also offers noise suppression to filter background noise such as keyboard tapping. The platform is powered by Vidyo’s new VP9 codec to support real-time video communications.

VidyoConnect is an enterprise meeting service for team collaboration. The service offers a unified experience across endpoints, from mobile devices to conference rooms. The service also offers a hybrid capability to manage video communication traffic within the corporate network.

VidyoEngage enables enterprises and healthcare systems to provide face-to-face video interactions with customers and patients. The service also offers integrations with DocuSign to streamline processes.

VidyoCloud also offers added support for Xamarin and Electron in Vidyo.io to allow app development from a single code base.

New RingCentral app integrations include Google, Slack, Alexa

While Cisco and BroadSoft grabbed the headlines last week with their acquisition news, another unified communications provider showcased its market momentum. RingCentral Inc., a UC-as-a-service vendor based in Belmont, Calif., unveiled several application integrations that fortify its platform and highlight the pervasiveness of open, cloud-based communications.

RingCentral has expanded its API platform that lets developers integrate voice, messaging and fax into business workflows. In today’s multicloud applications environment, RingCentral said its open platform is an ecosystem-friendly approach that can enable business communications with new artificial intelligence, chatbot and app integrations.

For instance, the newly announced RingCentral for Google is a native integration with G Suite. With the add-on service, users can promote an email conversation to a RingCentral call and send SMS from Gmail. Users can also view recent call history, voicemail, SMS and see presence for online or offline status of RingCentral contacts.

Additionally, the new RingCentral for Alexa Skills is an integration with Amazon Alexa-powered devices that lets users interface through voice to request playback and respond to voicemails. Users could also send and check text messages and start a RingCentral outbound call and SMS through the RingCentral app. This integration is expected to be available by the end of this year.

App integrations enable chatbots

Another integration, RingCentral for Slack, is designed to introduce meetings and calling capabilities into the Slack messaging platform. The integration lets Slack users use slash commands to access RingCentral and launch video meetings and audio conferences. The service is available in the RingCentral App Gallery, and it requires a Slack account and subscription to RingCentral Office, the vendor’s cloud phone system.

RingCentral also announced last week updated integrations for its Glip team collaboration tool with AI and chatbot capabilities to automate business processes. For instance, the Salesforce Alert Bot in Glip can capture Salesforce events and send notifications to Glip teams. This feature enables sales managers to have immediate updates on opportunities without having to open Salesforce in a separate application. The bot is expected to be available in early 2018.

Kore.ai, a chatbot platform partner of RingCentral, has enabled four bots within the Glip platform, including Salesforce, Twitter, Asana and Trello. Gong.io, a conversation intelligence platform for sales teams, provides call transcription and analytics within the Glip platform, so teams can replicate best sales practices.

RingCentral’s platform enhances business communications through an integrated and pervasive approach, said David Lee, RingCentral’s vice president of platform products, in a statement. The RingCentral App Gallery has more than 7,000 developers and over 100 cloud app integrations.

Open APIs benefit communications

While the RingCentral integrations are important, many other UC-as-a-service (UCaaS) platforms are also fairly open, as they move to an API model, said Zeus Kerravala, principal analyst at ZK Research in Westminster, Mass. App integrations are almost becoming a mandatory feature in the market, he added.

Many vendors, for instance, integrate with Salesforce, the popular cloud-based customer relationship management platform. But Kerravala suggested customers consider additional app integrations beyond the most common ones, especially integrations that could benefit certain vertical markets or business units.   

“Now that every vendor has exposed APIs, it makes it much easier to integrate with them,” he said. “I think that’s been one of the big benefits of the industry.”

RingCentral, in particular, has the most mature UCaaS platform, plus a team messaging service with Glip, industry analyst Dave Michels wrote in a recent report. But several providers are nipping at RingCentral’s heels.

“RingCentral is firing on all cylinders — UCaaS, messaging, video, contact center and integrations,” Michels said. “They are in the enviable position of delivering today what most of the industry is attempting to create.”

A supply and demand problem

We’ve got too many UCaaS providers today. There’s too much supply and not enough demand. Some consolidation is necessary.
Zeus Kerravalaanalyst at ZK Research

The UCaaS market is particularly packed with providers, including 8×8, West, Fuze, Mitel and Masergy, among others. Traditional telecom vendors, like AT&T, are also in the UCaaS market. System integrators, like Dimension Data, sell UCaaS tools. And traditional UC vendors, like Cisco and Microsoft, offer their respective UCaaS products.    

“We’ve got too many UCaaS providers today,” Kerravala said. “I think there’s too much supply and not enough demand. Some consolidation is necessary.” 

Some consolidation occurred last week when Cisco said it will acquire BroadSoft, a deal that validates the market’s strength, Michels said. Industry consolidation will continue, he added, as UCaaS alone is increasingly viewed as a commoditized service.

For now, Kerravala added, the acquisition will have a neutral effect on RingCentral and other providers, because small and midsize businesses primarily buy UCaaS products. But that effect could turn negative for RingCentral and benefit Cisco as more large organizations start to buy UCaaS.  

Go beyond calling capabilities

Users navigating this market need to understand what exactly they are buying, Kerravala said. Cisco’s Hosted Collaboration Solution, for instance, is a private cloud offering sold to service providers that then offer it to their customers.

RingCentral, meanwhile, is more of a multi-tenant public cloud, where one change to the service can affect many customers.

The first thing customers need to do is not jump on board cloud just to do cloud, but to understand what they want and why.
Zeus Kerravalaanalyst at ZK Research

A private cloud offers more customization, but might require more upfront work, Kerravala said. Highly distributed and regulated companies with data sovereignty issues might prefer a private cloud. Big retailers, however, might favor a public cloud if they need to get telephony out to thousands of stores.

“The first thing customers need to do is not jump on board cloud just to do cloud, but to understand what they want and why,” Kerravala said.

After that initial step, organizations should compare UCaaS vendors more closely. While the calling capabilities and audio quality are quite comparable among the vendors, customers should dig deeper and examine other services, such as team messaging and mobility.

“Looking at the services outside the core calling is probably the most important criteria for determining which of these many vendors you want to go with,” Kerravala said.