From streaming TV to Gmail, it's all about the cloud

SAN FRANCISCO -- Whether you're watching your favorite show on Netflix or backing up all-important cat photos to Google Drive, the "cloud" has become an essential part of our digital lives.

No, not those large white bodies of water vapor floating through the sky -- the tech definition simply refers to having servers in remote data centers handling programs or data that people or businesses can access anywhere from devices of their choosing.

"You name it, it's happening in the cloud," analyst Rob Enderle of Enderle Group said. "It's really where everything is being done now."

Century-old technology stalwart IBM is making a $34 billion bet on cloud computing in the form of a mega-deal to buy Red Hat, a pioneering proponent of the open source movement that arose to counter giants like Microsoft whose models were based on keeping their source code secret.

Here is a look at the trend and its allure to technology titans such as Amazon, Google, Microsoft and IBM.

THE CLOUD IS EVERYWHERE

Developers craft software in the internet cloud.

Self-driving cars and smart cities will rely on computing in the cloud.

Web-based email and company payroll systems are in the cloud.

Sales teams on the road manage accounts and tap into resources in the cloud.

While businesses in the past used on-site mainframes built by IBM or its rivals, it has become cost effective for firms to rent applications or data storage hosted and maintained in the cloud by providers such as Amazon or Microsoft.

Such arrangements allow businesses to easily access more or less computing power as needed, without having to invest in data centers or system maintenance.

Companies interested in tighter control of some of the data or processes opt for "hybrid clouds," simply meaning that they let online data centers handle some of the computing work while keeping more sensitive aspects on their own machines.

CLOUD FUTURE CLEAR

The kind of computing power available in the cloud is seen as essential for processing data in real time for innovations such as cars safely driving themselves or cities allocating public services in real time as needs or situations change.

Mobile lifestyles ramp up reliance on cloud computing as people watch YouTube, post on Facebook, tweet, send photos to friends, and work on the go.

Smartphones, tablets, and laptops can open windows into immense computing power in data centers.

The more people "cut the cord" and let go of traditional cable TV, the more they turn to the cloud.

Streaming television services accessible at Netflix, Amazon Prime, and YouTube are hosted and powered by online data centers, as are web-based email and social media such as Facebook, Snapchat, Instagram, and Twitter.

Online music rains from the cloud.

But the cloud also comes with concerns about who is controlling and protecting data stored by third-parties online.

Cloud computing platforms are tempting targets for hackers who see gold or power in the massive amounts of information behind data center walls.

Some believe that will lead to a future with businesses preferring more balanced, or hybrid, setups with sensitive data kept in-house.

AMAZON LEADING RIVALS

Amazon Web Services (AWS) is considered the leader in cloud computing, with Microsoft's Azure platform its top rival.

"Amazon made a commitment to cloud computing, and their CEO is now the richest guy in the world," analyst Enderle said, referring to Jeff Bezos.

Amazon announced new AWS customers including Samsung Heavy Industries last week when it reported earnings for the third quarter of this year.

AWS net sales rose to $6.7 billion from $4.6 billion in the same period last year. AWS operating income jumped to $2.1 billion from $1.2 billion in the same year-over-year comparison of quarters.

Microsoft said last week that revenue from its cloud offerings to businesses soared to $8.5 billion in the recently ended quarter, up 47 percent from the same period a year earlier.

Alphabet-owned Google's earnings for the third quarter showed that, while it still made the bulk of its money from online ads, the amount of "other revenue" that presumably includes cloud services increased to $4.6 billion, an increase of a billion dollars from a year ago.

China-based Alibaba is considered a fast rising contender, according to analysts.

Gartner forecast that the overall public cloud services market worldwide would grow steadily from $187.2 billion this year to $338 in the year 2022.

While consumers enjoy the benefits of cloud-hosted services, most of the money made by hosts come from catering to the computing needs of businesses.

source: news.abs-cbn.com

Dow ends above 23,000 for first time on strong IBM earnings

NEW YORK - The Dow surged to a record Wednesday, easily topping 23,000 points following strong earnings from IBM that boosted confidence about the rest of the quarterly reporting season.

The Dow Jones Industrial Average jumped 0.7 percent to 23,157.60, its third straight record.

The broad-based S&P 500 rose 2,561.26, while the tech-rich Nasdaq Composite Index edged up to 6,624.22. Both the S&P 500 and Nasdaq also finished at records.

IBM shot up 8.9 percent after it reported a 4 percent drop in third-quarter earnings to $2.7 billion, but offered a more bullish outlook on revenue growth after more than 5 years of declining sales. Key businesses such as cloud computing and artificial intelligence scored higher revenues.

Canaccord Genuity now estimates that third-quarter earnings growth will come in at 4.4 percent, up from 3.5 percent at the start of the period and more upward revisions likely.

Canaccord said it also sees a strong likelihood of additional earnings growth in 2018 due to an improving economy, a likely US tax cut and other factors.

"In our view, investors are not adjusting expectations up enough to reflect headwinds that have become tailwinds for growth," said Canaccord, which has predicted the S&P 500 would hit 2,800 in 2018.

Housing data released Wednesday showed a drop in September in housing starts and permits for new construction, due partly to US hurricanes, but also declines in regions outside the hurricane-ravaged areas.

A report from the Federal Reserve characterized growth around the US as "split between modest and moderate" and said wages remain stubbornly low despite labor shortages.

Health insurer Anthem rose 2.4 percent and CVS Health gained 2 percent after the companies unveiled plans starting in 2020 for a new pharmacy benefits program.

The venture replaces Anthem's program with Express Scripts, which Anthem accused of overbilling it by billions of dollars. Express Scripts rose 1 percent.

Dow member Chevron fell 1.8 percent following a downgrade by Societe Generale.

source: news.abs-cbn.com

Trump creates business advisory council stacked with CEOs

WASHINGTON - President-elect Donald Trump announced the formation of a council to advise him on job creation, a group comprised of the leaders of a variety of major US corporations including GE, GM, Boeing, Disney and IBM.

Stephen Schwarzman, chief executive officer of major investment firm Blackstone Group LP, will chair the council.

"My administration is committed to drawing on private sector expertise and cutting the government red tape that is holding back our businesses from hiring, innovating, and expanding right here in America," Trump said in a statement announcing the formation of the council.

Trump called Schwarzman earlier this week to ask for his help in chairing the council, according to a source familiar with the discussions who was not authorized to speak publicly on the arrangements. The two men, who are not friends and have not done business together before, drafted a list of CEOs to ask to participate in the forum, and then Schwarzman asked each individual to participate.

The forum could meet as frequently as monthly, the source said.

Trump has said that his top priorities will include cutting regulations that affect business and lowering the corporate tax rate, positions business leaders have cheered.

Presidents often convene councils of business leaders. President Barack Obama frequently met with the CEOs of large companies and often spoke before the Business Roundtable, comprised of CEOs of big corporations.

In 2011, Obama convened a jobs council that was led by General Electric Co CEO Jeff Immelt and an export council headed by Xerox Corp CEO Ursula Burns.

Obama and business leaders worked on trade, technology and immigration efforts.

Some members of Trump's council also served in advisory roles with Obama, including Bob Iger, the CEO of Walt Disney Co ; Jim McNerney, former CEO of Boeing Co ; and Ginni Rometty, CEO of International Business Machines Corp . All three served on Obama's export council and will continuing advising the next administration.

Noticeably absent from the council are heads of leading U.S. technology companies such as Google's parent Alphabet Inc , Apple Inc and Facebook Inc. Trump's transition team has been slow to establish a group to address cyber security and other technology issues.

The council could still add leaders from technology companies, a source familiar with the formation of the group said.

The members of Trump's council include:

* Stephen A. Schwarzman (Forum Chairman), chairman, CEO, and co-founder of Blackstone;

* Paul Atkins, CEO, Patomak Global Partners, LLC, former commissioner of the Securities and Exchange Commission

* Mary Barra, chairman and CEO, General Motors Co

* Toby Cosgrove, CEO, Cleveland Clinic

* Jamie Dimon, chairman and CEO, JPMorgan Chase & Co

* Larry Fink, chairman and CEO, BlackRock Inc

* Bob Iger, chairman and CEO, The Walt Disney Co

* Rich Lesser, president and CEO, Boston Consulting Group

* Doug McMillon, president and CEO, Wal-Mart Stores Inc

* Jim McNerney, former chairman, president, and CEO, Boeing

* Adebayo "Bayo" Ogunlesi, chairman and managing partner, Global Infrastructure Partners

* Ginni Rometty, chairman, president, and CEO, IBM

* Kevin Warsh, Shepard Family distinguished visiting fellow in economics, Hoover Institute, former member of the Board of Governors of the Federal Reserve System

* Mark Weinberger, global chairman and CEO, EY

* Jack Welch, former chairman and CEO, General Electric

* Daniel Yergin, Pulitzer Prize winner, vice chairman of IHS Markit Ltd

- With additional reporting by Gui Qing Koh and Gregory Roumeliotis

source: news.abs-cbn.com

Etihad, IBM sign $700-M tech deal

MANILA - Etihad Airways and IBM have entered into a 10-year technology services agreement worth approximately $700 million.

The deal aims to provide Etihad with world-class infrastructure and security, and improve efficiency through IBM's technology services.

The agreement includes plans for the creation of a new cloud data center in Abu Dhabi, which is envisioned to be one of the most sophisticated technology facilities in the Middle East.

“This is a long-term, strategic partnership which will allow Etihad Airways and its partners to harness the latest technologies as we deliver our award-winning services. This is a game-changing agreement for Etihad Airways, for our partners and employees, and for Abu Dhabi," said James Hogan, Etihad Airways president and chief executive officer.

As part of the agreement, around 100 Etihad Airways information technology employees will transition to IBM, where they will have access to further IT skills development opportunities.

IBM will manage the data center operation, including individual infrastructure services and IT help desk for Etihad Airways.

“This landmark agreement, a fundamental part of our technology and innovation strategy, will bring us a global IT delivery platform that is secure, resilient and future-ready for Etihad Airways’ companies and equity partner airlines," Robert Webb, Etihad Airways’ chief IT officer said.

In 2014, Etihad Airways carried 14.8 million passengers.

source: www.abs-cbnnews.com

Apple, IBM unveil plan for iPhone, iPad 'big data'

NEW YORK -- Apple and IBM unveiled a "landmark" partnership Tuesday to win over business customers by offering iPhones and iPads that are specially tailored to the corporate world.

The tie-up between what were historically rivals aims to boost Apple's share of the market for mobile devices for businesses and will offer custom-made apps which bring the power of IBM's supercomputing analytics to a mobile workforce, a joint statement said.

"The landmark partnership aims to redefine the way work will get done, address key industry mobility challenges and spark true mobile-led business change," the statement said.

"Apple and IBM's shared vision for this partnership is to put in the hands of business professionals everywhere the unique capabilities of iPads and iPhones with a company's knowledge, data, analytics and workflows."

The companies plan to release more than 100 industry-specific enterprise solutions including apps developed for the iOS platform, along with IBM cloud services, security and analytics.

As part of the deal, IBM will also sell iPhones and iPads tailored to specific industries.

"For the first time ever, we're putting IBM's renowned big data analytics at iOS users' fingertips, which opens up a large market opportunity for Apple," said Apple's chief executive Tim Cook. "This is a radical step for enterprise and something that only Apple and IBM can deliver."

Ginni Rometty, IBM chairman, president and CEO, said the alliance "will build on our momentum in bringing these innovations to our clients globally."

The deal was the result of several conversations between Cook and Rometty over the last few months, the Re/code website said.

"If you were building a puzzle, they would fit nicely together as puzzle pieces with no overlap," Cook told Re/code of the two companies. "When you put our teams in the room together, we both have engineering cultures, so they feed off of one another. And when you do that you end up with something better than either of you could produce yourself."

Rometty said of the relationship between IBM and Apple: "We both think of each other as the gold standard."

'Hottest-growing segments'

Industry analyst Jeff Kagan called the tie-up between what were fierce competitors an "incredible turn of events."

"Apple is looking for growth in the business community for their devices like iPhone, iPad and iCloud services. IBM is the company who can help Apple do just that," he said.

"The mobile and telecom space is one of the hottest-growing segments. Apple really has not done a great job on the business side of the market. That's why this deal with IBM seems to make so much sense.

"We'll have to see if this works, but the thinking behind it sure makes sense."

Apple will create a new service and support offering tailored help, while IBM will manage some of the functions like device activation and security.

The deal also includes a private app catalog, and helps business customers transform IBM services for mobile devices.

The new offerings will be pushed through Apple's new mobile operating system, iOS 8, which was unveiled in June.

The news comes with Apple seeking to boost growth amid a global onslaught of smartphones and tablets using the Google Android operating system. While Apple is popular among many consumers, its appeal to corporate users has been more limited.

The research firm IDC said it expects Android smartphones to remain ahead of the pack with an 80.4 percent market share in 2014, and that Apple's market share for the iPhone is forecast to be 14.8 percent.

A survey by Strategy Analytics said Android grabbed 65.8 percent of global tablet sales in the first quarter, up from 53 percent a year ago. Apple meanwhile saw iPad sales slump and its market share tumbled to 28.4 percent from 40.3 percent a year earlier.

source: www.abs-cbnnews.com

IBM Third-Quarter Revenue Misses Street on China Woes

IBM reported a 4 percent drop in third-quarter revenue, worse than expected by Wall Street, amid a decline in hardware and emerging markets even as it beat earnings estimates.

IBM (IBM) shares fell 6 percent in after-hours trade to $175.56.

Chief Financial Officer Mark Loughridge said on a conference call for investment analysts that third quarters tended to be difficult for the world's largest technology service provider but added the company faced some particular challenges this year.

Profitability in its hardware business declined by $1 billion year-to-date and currency effects had a $500 million year-to-year negative impact, he added.

There is increasingly less demand for hardware as software replaces traditional infrastructure. IBM has recognized that trend and is itself shifting to become a more software focused business.

Hardware was mostly hit in China, which Loughridge said broadly accounted for about 5 percent of IBM's business and about 40 percent of that business was hardware. China's growth has slowed this year, impacting corporate and public spending as the country develops an economic reform plan.

"As far as the growth markets are concerned, we will be dealing with the China impact for another couple of quarters," Loughridge said.

Revenue dropped 4 percent to $23.7 billion, below Wall Street analyst expectations of $24.74 billion, mainly due to the decline in its hardware division, excluding its System z mainframe servers, and in emerging markets, which were down 9 percent.

Hardware revenue was down 17 percent, while System z mainframe revenue rose 6 percent.

Quarterly net income rose 6 percent to $4.0 billion, or $3.99 a share on a non-GAAP basis from $3.62 a year earlier, above estimates of $3.96 a share, according to Thomson Reuters I/B/E/S.

The revenue drop was worse than investors expected, RBC Capital analyst Amit Daryanani said.

Edward Jones analyst Josh Olson agreed, saying it was a disappointing quarter from a revenue standpoint.

"I think that the hardware business is going to be something they need to work through, and growth markets are down much more than expected," he said.




Olson added that the services backlog was healthy, but "we are not seeing the conversion of that backlog into meaningful revenue."

The company reiterated its full year outlook of non-GAAP EPS of at least $16.25. But ISI Group analyst Brian Marshall said there was concern that IBM's days of double-digit EPS growth are nearing an end.

"Increasingly, we believe IBM has been relying on non-operating, inorganic drivers of EPS growth," he said.

Asked on the call if investors should prepare for no revenue growth and less than double-digit earnings growth in the future, Loughridge promised "stronger operational performance as we go into 2014."

IBM's hardware business should return to profit growth in the second half and stabilize profit on a year to year basis for the year, he said. Emerging markets would return to mid-single-digit performance for the 2014 full-year especially after the implementation of China's new economic plans, he added, without specifying the measure of performance.

Asked about the impact of the U.S. federal government shutdown, Loughridge said that there would not be much of an impact to the company if the issue is resolved this month.

"If this extends into December, then it's going to get to be a meaningful number, say around a nickel, that we would probably not be able to contain," he said.

The U.S. federal government business was a little less than 3 percent of the total revenue mix, Loughridge said.

source: dailyfinance.com