HP shares rose nearly 5 percent to $22.10, up $1.02 as of 11:15 am ET. Investors appear to be showing new confidence in HP and how CEO Meg Whitman is running the show. All the announcements that HP made yesterday bear repeating, because it was a busy afternoon:

 
Update: A few readers have written to point out I was wrong about HP’s old ticker symbol. It wasn’t HP but HWP. Silly me. Even so, if the Compaq name is headed for some lesser level of importance in HP’s future, then perhaps the Q in the ticker symbol, which was added as a nod to Compaq’s old symbol CPQ, to give the impression that the combination was more a merger of equals, should go. Given the choice between them, I would vote for HP. I should stress that I have zero indications that this is even under consideration, and is really just me ruminating.

Analysts had a mixed view. Chris Whitmore of Deutsche Bank Securities has been one of the more skeptical voices on HP’s turnaround prospects. “New sheriff, old game plan,” was the headline on his note to clients today. “We remain cautious on HP’s weak fundamentals, challenging macro conditions and deteriorating cash flow,” he wrote. Despite the beat on earnings, free cash flow — at $1.4 billion in the quarter — declined by half, pointing to what Whitmore calls “very poor earnings quality.” He rates HP as a “sell,” with a $20 price target.

Brent Bracelin of Pacific Crest Securities wrote that he remains unconvinced that an unexpected strength in HP’s PC unit is sustainable. “Apple and Samsung now account for 39 percent of market share across PCs, tablets and smartphones, and have a volume advantage relative to HP’s 6 percent share,” he wrote in a note to clients this morning. He rates the shares “market perform,” or neutral, and worries that HP’s biggest problem is that about half its sales are still tied to PCs and printers.

Whitman took to CNBC this morning to talk about HP’s situation. She portrayed the turnaround under way as about “10 to 15 percent” complete. That means there’s still a lot of work to do ahead. “We’ve laid a lot of pipe and done a lot of groundwork,” Whitman told the network’s anchors in a 13-minute appearance. I’ve embedded it below:

Ariba operates something called a buyer-seller network that’s aimed at helping companies manage their supply chains more efficiently. The price amounts to a 20 percent premium on Ariba shares, which closed yesterday at $37.64 a share. Ariba reported sales in the year ended September 2011 of $444 million and a profit of $33.3 million.

It’s the second big cloud deal for SAP in recent memory. In December it spent $3.4 billion to acquire SuccessFactors, a player in the cloud-based human resources software business. That deal flipped the switch on a wave of acquisitions by Oracle, which soon acquired Taleo, and Salesforce.com, which bought the start-up Rypple in response.

Here’s the announcement below.

SAP to Expand Cloud Presence with Acquisition of Ariba
Combination Creates the Business Network of the Future;
Provides Open Business Commerce Community and Procurement Solutions in the Cloud;
Network to Benefit from SAP’s Flagship In-Memory Platform, SAP HANA

WALLDORF, Germany and SUNNYVALE, Calif., May 22, 2012 /PRNewswire/ — SAP AG (SAP) and Ariba, Inc. (ARBA) today announced that SAP’s subsidiary, SAP America, Inc., has entered into an agreement to acquire Ariba, the leading cloud-based business commerce network, for $45.00 per share, representing an enterprise value of approximately $4.3 billion. The acquisition will combine Ariba’s successful buyer-seller collaboration network with SAP’s broad customer base and deep business process expertise to create new models for business-to-business collaboration in the cloud.

The Ariba board of directors has unanimously approved the transaction. The per share purchase price represents a 20% premium over the May 21 closing price and a 19% premium over the one month volume weighted average price per share. The transaction will be funded from SAP’s free cash and a €2.4 billion term loan facility. The transaction is expected to close in the third quarter of calendar year 2012, subject to Ariba stockholder approval, clearances by relevant regulatory authorities and other customary closing conditions. The transaction is expected to be accretive to SAP’s non-IFRS earnings per share in 2013.

Business Network to Drive Growth

With the addition of Ariba, SAP will acquire the leader in cloud-based collaborative business commerce. The acquisition establishes SAP as the leading business network, adding business-to-business collaboration to its existing solutions. The move positions SAP in a fast-growing segment as buyers and sellers across the globe connect in new ways through the cloud.

SAP’s entry into the inter-enterprise business network space significantly expands its growth opportunities and accelerates its momentum in the cloud. Last week, SAP announced the roadmap for its cloud applications business (Software-as-a-Service), focusing on managing customers, suppliers, employees, and financials, in addition to its cloud suite offerings SAP Business ByDesign and SAP Business One. The acquisition will also significantly boost SAP’s cloud applications portfolio with the addition of Ariba’s leading cloud-based procurement solutions.

Headquartered in Sunnyvale, California, Ariba has approximately 2,600 employees. The company is the leader in cloud-based collaborative commerce applications and the second-largest cloud vendor by revenue. Ariba combines industry-leading technology with a web-based trading community to help companies discover, connect and collaborate with a global network of partners – all in a cloud-based environment. With $444 million in total revenue, Ariba experienced 38.5 percent annual growth in 2011. Its business network recorded 62 percent organic growth in the same period.

“The cloud has profoundly changed the way people interact. The impact will be even greater as enterprises connect and collaborate in new ways with their global networks of customers and partners,” said SAP Co-CEOs Bill McDermott and Jim Hagemann Snabe. “Cloud-based collaboration is redefining business network innovation, and we are catching this wave in the early stage of its evolution. The addition of Ariba will create the business network of the future, deliver immediate value to our customers and provide another solid engine for driving SAP’s growth in the cloud.”

Businesses to Benefit from Combination

Industry experts estimate the cloud-based enterprise network and procurement segment at a current size of $5 billion in revenue. The Ariba network is the largest and most global trading network, connecting and automating more than $319 billion in commerce transactions, collaborations, and intelligence among more than 730,000 companies. SAP’s global customer base of more than 190,000 companies includes the largest buyers and sellers in the world, offering great potential to increase the number of participants, as well as the volume and types of transactions conducted through this network. Already today 63% of the world’s transaction revenue touches an SAP system. SAP and Ariba will facilitate collaborative commerce within and between companies of all sizes.

The combination of SAP’s innovations and core applications with the Ariba cloud-based network will create new business value for customers:

Together, SAP and Ariba can deliver a truly end-to-end solution that enables companies to achieve a closed-loop from source-to-pay, regardless of whether they deploy in the cloud, on-premise or through a combination of both.

Ariba’s open network and SAP’s integration expertise will facilitate participation and extend the benefits of business collaboration to all companies, on any system, from any provider.

The Ariba network will benefit from the performance delivered by using SAP’s flagship in-memory platform SAP HANA.

Relationship and transaction information from commerce activity in the Ariba network together with SAP’s leading analytics will provide real-time insights to enable trading partners to discover, connect and collaborate more effectively.

All SAP customers will be able to easily connect to the business network through pre-built integration points.

Through the combination of the business network procurement solutions from Ariba and SAP, organizations can gain 360-degree business intelligence and effectively demonstrate that spending activities, contracts, and supplier interactions adhere to corporate compliance guidelines.

“In our personal lives, networks are playing an increasingly important role in how we connect, share, and shop – bringing more insight and efficiency into everything we do,” said Bob Calderoni, CEO, Ariba. “Businesses are looking for the same connectedness, insight, and efficiencies in the processes and collaboration with customers, suppliers, and partners beyond the walls of their companies. By combining Ariba’s open global trading network and SAP’s solutions and analytics, we are ushering in a new era of business-to-business collaboration and driving new levels of productivity.”

Upon completion of the transaction, it is planned to consolidate all cloud-related supplier assets of SAP under Ariba. The existing management team will continue to lead Ariba, which will operate as an independent business under the name “Ariba, an SAP company.” The SAP Executive Board intends to nominate Ariba CEO Bob Calderoni to the SAP Global Managing Board after closing of the transaction and subject to the approval of the SAP Supervisory Board.

Other examples that have punctured my attention bubble in recent years are platform-as-a-service, infrastructure-as-a-service and storage-as-a-service, and there are probably many more. Then they get turned into ever-weirder acroynyms: Saas, PaaS, Iaas. You get the idea.

Today, Netsuite, the cloud player whose traditional approach is essentially to run your business from the cloud, today contributed its own new thing offered as a service: Commerce. (Cue the acronym: CaaS.)

One of the big things that businesses have to do is buy and sell goods and services from other businesses. The most basic example is that widget makers have to buy cardboard boxes from a supplier, because the goods don’t show up on the loading dock by magic. The same goes for every bit of physical stuff a business needs and also the services it pays for to keep its operations running smoothly.

Netsuite isn’t just managing the back-end business-to-business commerce, but also the direct-to-customer type of commerce. And the experience works pretty much anywhere a customer may be coming from: On a phone, tablet or PC, in a store or on social media.

As customers have essentially come to expect to be able to buy anything and everything online, the traditional back-end commerce engines like Microsoft Dynamics, Great Plains, Sage and even SAP were imperfectly combined with patchwork solutions for selling on the Web. And the bits of the system that faced customers have rarely if ever been unified with the ones that also face suppliers, which has a way of complicating things like inventory, the supply chain and everything else that stems from basic ebb and flow of supply and demand.

And things are getting even more complicated as machines are programmed to automatically buy things from other machines based on a pre-defined set of circumstances.

NetSuite has built what it calls a commerce engine — dubbed SuiteCommerce — that speaks directly to the core enterprise resource planning (ERP) and customer relationship management (CRM) functions that are already its bread and butter. In English that means that the new engine comes into the process already knowing what everything is, and also who everyone is. That makes it ready to wheel and deal not only with customers but also with suppliers. And when you get down to it, that’s a good way to reduce a lot of friction in any business, which is pretty much what cloud computing is supposed to be about.

The commerce service was probably the biggest news to come out of Netsuite’s SuiteWorld conference in San Francisco today, where CEO Zach Nelson (pictured) gave a keynote address. The company also announced a partnership with Square, the maker of little white credit-card reading thingies that you can insert into an iPhone or iPad for the purpose of accepting payment. Square’s Register application has been integrated with SuiteCommerce, so if you see more businesses using Squares, maybe this has something to do with it.

For years, the applications were traditional on-premise software — you’d run it on a server or a series of desktop machines wherever the people who used them happened to be. And the biggest players were — or rather, still are — Oracle, by way of its takeover of PeopleSoft, and SAP. But when these apps started to migrate to the cloud and be available on demand, things started getting interesting. Companies that used them started to love the functionality, the ease of use, maintenance and support, and also the lower cost, and they started voting with their purchase orders in favor of the cloud.

That’s when the established on-premise suppliers got grabby. Last year, the race to roll up the cloud players started in earnest when SAP spent $3.4 billion for SuccessFactors. Not long after that, Taleo, another cloud player, went to Oracle for $1.9 billion. And Salesforce.com nabbed Rypple. Meanwhile, a bunch of former PeopleSoft execs are building Workday into a credible threat to all of them.

So this makes today’s news from SilkRoad — yet another player in the cloud-based HR application business — all the more interesting. The company announced a $35 million Series C led by Keating Capital and NTT Finance, joining existing investors Intel Capital, Crosslink Capital, Foundation Capital, Azure Capital and Tenaya Capital. Customers include McAfee and International Paper.

Another reason for all the heat being generated by this low-profile sector: The market research firm IDC reckons that, by 2015, companies will spend north of $8 billion on human-capital management tools.

The company says the funding will support its international expansion plans, especially internationally. Its products currently support 18 languages, and there are plans to add to those.

Barely two weeks after hiring former Jive exec Lynda Smith as its chief marketing officer, today it will announce that it has a new CFO. It’s Lee Kirkpatrick, and he’s leaving Say Media, where he had the same title. He started his new job on May 7.

Twilio is growing so fast that it’s a little hard to keep track of all the news coming out of it. In his new role, Kirkpatrick will be responsible for Twilio’s finances and worldwide strategy. The company recently added Belgium, Finland, the Netherlands and Sweden to the steadily growing stable of countries where it is operating. It also recently struck a deal with Microsoft to add telephony features to its Azure cloud computing platform, so, yeah, maybe now might be the time to add a CFO.

What’s Job One? Well, here’s a funny tradition at Twilio: Every employee, no matter their level or level of technical ability, is required to build a Twilio application in order to become familiar with how the service works. So, part of this week will be devoted to that. Companies like eBay unit StubHub, Salesforce.com and Airbnb have used it to create some custom apps that include the use of a phone.

It’s a very Twilio sort of thing to do. When the company was in the process of raising its most recent funding round — a $17 million series C led by Bessemer Venture Partners and Union Square Ventures — Bessemer partner Byron Deeter created a Twilio-connected number and asked CEO Jeff Lawson to call it. As VentureBeat reported at the time, when Lawson called, he heard an automated voice message asking him to press 1 for $5 million, press 2 for $10 million and press 3 for $15 million.

It turned out that C round topped out at $17 million late last year, bringing its total capital raised to about $34 million, so there’s a decent-sized pile of money to look after. Before Say Media, Kirkpatrick held executive jobs at Ofoto, the Kodak Gallery and Reuters.

Aneel Bhusri

Sources familiar with the company’s plans tell AllThingsD that Workday has chosen the four bankers that will lead it through the IPO process: Morgan Stanley, Goldman Sachs, Allen & Company and JPMorgan Chase & Co. The search for bankers caps a process begun in December.

The company’s IPO path calls for an S-1 filing to be made with the Securities and Exchange Commission by mid-July. After a late summer or early fall road show, its shares would debut between October and December, depending on how favorable market conditions are, sources familiar with the matter tell me.

The process began in earnest after Workday hired its new CFO, Mark Peek, away from VMware, where he was also CFO.

Workday is feeling emboldened in part by the successful offerings of Jive Software and Splunk, both enterprise companies with their hands in the cloud business. Workday itself is a pure cloud software play, specializing in human resources applications, a white-hot area of enterprise that has seen a lot of M&A activity of late.

In December, software concern SAP spent $3.4 billion to acquire SuccessFactors. Then, in February, software giant Oracle spent $1.9 billion to acquire Taleo, in a deal that took place shortly after I interviewed Taleo’s CEO. Even Salesforce got into the act, acquiring the start-up Rypple for an undisclosed amount in December.

Much of that dealmaking came in response to concerns about Workday, especially after its impressive $85 million Series F round of institutional funding at a $2 billion valuation, which AllThingsD reported exclusively in October. A Bloomberg News report said that round was oversubscribed and grew to $100 million when Michael Dell’s MSD Ventures joined.

Investors in that round included several who also took part in institutional rounds in Facebook and Web gaming player Zynga: T. Rowe Price, Morgan Stanley Investment Management, Janus, and Bezos Expeditions, the personal investment entity of Amazon CEO and founder Jeff Bezos. William Danoff, the manager of Fidelity’s $80 billion Contrafund, the mutual fund giant’s largest stock-based fund, also participated in that round.

A Workday IPO, which would raise about $500 million, would make for a sweet payday for the company’s earlier investors, which include Dave Duffield and Greylock Partners, who invested $90 million in four rounds, and New Enterprise Associates, which joined a $75 million Series E round in 2009. By my math, Workday’s total capital raised comes to a cool $195 million.

So how’s business? With the company having disclosed $160 million in billings total bookings in 2010, sources familiar with its operations tell me bookings in 2011 exceeded 100 percent growth. That would be above the $320 million in 2011 bookings CEO Aneel Bhusri told me he expected last October.

Workday is essentially the creation of PeopleSoft vets Bhusri and Duffield. They started the company in 2005, not long after losing a pitched battle to resist a $10 billion hostile takeover by Oracle. Bhusri and Duffield concluded that the next battlefield for enterprise software would be in the cloud. They kickstarted Workday using their own money and some funding from Greylock, and brought some PeopleSoft employees with them.

The idea was to re-create PeopleSoft, which makes software that businesses need to run day to day, but to deliver it from the cloud.

And unlike other cloud players that approach smaller companies and work their way up to ever-larger customers, Workday’s customers are already in the big leagues. The average Workday customer — there are 280 — has between 10,000 and 15,000 employees. The biggest is Flextronics, the huge electronics manufacturing company, which has 200,000 employees. Other customers include Time Warner, Thomson Reuters, Chiquita Brands and Salesforce.com. There are Workday records on more than two million employees on its system. All that after only four-plus years of active selling. A second, newer line of financial applications aimed at helping companies more efficiently manage their spending is getting traction, too.

Workday will probably be the biggest among a pending batch of enterprise-oriented IPOs set for summer and fall after the Facebook madness is over. For one, there’s Violin Memory, which I’ve been reporting on quite a bit. And Reuters is reporting that cloud storage and collaboration concern Box is looking like it’s eyeing an IPO in 2013. The bankers are going to be busy.

XtremIO makes storage arrays based on flash memory chips, and is a would-be rival to Violin Memory, the Silicon Valley start-up that’s revving its engine for an IPO later this year, following an $80 million Series D funding round which AllThingsD reported exclusively last month.

Another player in the all-flash storage array business is Pure Storage, which came out of stealth mode last August with a $30 million Series C led by Redpoint Ventures.

News of the deal gave shares of Fusion-IO a jolt. Fusion-IO rose 50 cents, more than 2 percent, to $21.63, just as the markets opened for trading in New York. As of yesterday’s close, Fusion shares have fallen by more than 6 percent since its IPO debut last June.

Fusion is a founding member of the Flash Madness Club. Its flash memory insert cards for servers are widely used in data centers of companies like Apple, Salesforce.com and Facebook, speeding up the ability of servers to process data by eliminating bottlenecks created by conventional hard drives. Its customers also include Hewlett-Packard, Dell and IBM among other server manufacturers.

But after a major company-wide restructuring and the divestiture of several non-core businesses, CEO John Chambers (pictured here at D5) is finding that turning the massive Cisco ship around — something he seemed to have started two quarters ago, and which continued last quarter, isn’t coming easy.

There’s the global economy to worry about. All that messy complicated news coming out of Europe about sovereign debt and cuts in government spending around the world has a way of eating into technology budgets both at Cisco’s government customers and at its large enterprise customers.

Cisco’s guidance for the quarter ending in July was especially worrisome for investors, who promptly sent Cisco’s share price plummeting by more than 8 percent in after-hours trading. Cisco called for revenue to grow between 2 percent and 5 percent, which works out to sales in the range of $11.4 billion to $11.8 billion, well off the consensus forecast of $12 billion.

Guidance on earnings was equally disappointing. At 44 cents to 46 cents a share, the midpoint lags the consensus by two cents.

So what’s going on? I asked Chambers about it in a phone interview with AllThingD held after the conclusion of Cisco’s conference call with analysts.

AllThingsD: John, the markets clearly don’t like very much what they saw today. So, from a high level, what happened — good, bad and indifferent — with this quarter?

Chambers: The first thing from a high level is that we’re executing pretty well on our vision and strategy, and we did exactly what we said we would do. We guided for growth of 5 percent to 7 percent for the year and for the first nine months we’re at 7.5 percent [revenue]. We said profits faster than revenues, and we’re at 9.5 percent. Earnings per share increasing 13 percent year over year for the first nine months and gross margins down just 1 percent primarily on product mix. We’re winning versus our key competitors and winning at a pretty fast rate. When you’re number one or two in most product categories, holding your own in switching and making it very challenging for the Huawei’s of the world, the Junipers and Hewlett-Packards … Juniper and HP we’re pulling away from and we’ll see if we can maintain it. Huawei, for the first time we’re getting much better and competing against them and understanding their weaknesses. And if you look where we are in terms of the bigger picture, we’re in the right markets. We’re in the mobility market. We’re in video. We’re in the cloud market. We’re in the social networking segment. We’re pulling them all together, and our customers are buying the architecture in a pretty good amount. Even in service providers, where most people thought they would never move toward having preferred vendors, we’re seeing something close to that at some service providers and at many of them they are starting to think about going all-Cisco.

So on things we can control and influence I think we’re in pretty good shape. In terms of the market, I’d like to add another couple of points [of growth] in service providers, another couple of points from commercial customers. The public sector is at 3 percent. I’d take that for the year, but we think it’s going to be flat, give or take a couple points.

The issue is the enterprise. And there the problem is not that they don’t have the money or that they don’t understand that it’s important to get productivity. It’s that they’re uncertain. When they are uncertain, that’s because of economic issues primarily because of Europe. And uncertainty on government policy. Then you see people deciding not to invest. And that affects not only capital spending but jobs.

So I think the market understood what we’re saying and I think most people would give us credit for being a very good indicator of what the point in time change is. But this is not necessarily a given for what is going to happen in the second half of the year. I’m just trying to be as transparent as I know how.

The July quarter is usually your seasonally strongest. Given that your guidance was relatively weak compared to the consensus, what are we to make of the quarter coming up? Is it a secular weakness or mostly the economy? Are your competitors just taking it on the chin worse that you are?

Let’s look at Juniper. It’s down 6 percent a year and routing down 9 percent. Huawei is growing 11 percent a year, but its service provider segment is growing only 3 percent. HP’s networking business is back to the levels in their switching business to what they were when HP first bought 3Com. There’s an explosion in the data center business, it’s to the point that companies who have been there a long time like IBM or HP, we’re growing 67 percent and their servers are flat or slightly down. So the results speak for themselves in terms of what we’re doing right in some areas. But we’re learning to tie things together in a way that saves customers money, saves them time to market and allows them to achieve their business goals quicker. That is the game we’re playing for. The major thing we’re after is getting the enterprises spending again. Customers — almost uniformly — are saying that my business is okay, not great, they expect it will go up gradually, and that they’re probably going to spend more in the second half of the year than they did in the first. But immediately as a follow-up to that, they all say that’s true only if they’re not surprised by something from the economy. That’s the kind of uncertainty we’re seeing, and in talking with my peers in the industry who are in similar markets, they can finish my sentences. The question is whether it’s temporary or is it a blip? We just don’t know yet.

So given the restructuring we’ve been talking about for the last year or so, is Cisco the right size? Your overall headcount is down more than 8,000 from a year ago, but it’s up by more than 1,300 since the last quarter. Are you at the right size or are there more changes coming?

Out of the 1,353 people we added, the vast majority were either advanced services or engineers. We needed more engineers. The additions were around either building products or converting services. In terms of our organization structure, we re-did Cisco. We’ve learned from what we did well in the past, and you wouldn’t see the turnaround as quickly as we did if the structure weren’t so strong. But we needed to restructure how our customers buy, and how we build products. We needed to be nimbler and simpler in how we get decisions done. And that is a journey. In the past we tended to get a market transition, good or bad, and take off on a good one or address a bad one, and we would end up gaining market share almost always coming out of these. We’ll see if we do it again this time. But we weren’t constantly reinventing ourselves to avoid hitting the next wall or the next inflection point. That is what we’re trying to do. This is a continuous journey. While we were four or five inches around the waist, I think there’s still more work to be done in our middle levels. I think you’ll see us address that in the next year or two. Does that mean we’re going to adjust the market given that the market may have slowed? I’m not sure it has yet, we’ll know in a couple of quarters which way it’s going. The answer is, not in a major way. It’s too early to say which way this market is going. We’re not going to over-react or under-react.

You just made a major acquisition with NDS, about $5 billion. You still have a lot of cash on the balance sheet. What’s your stance on acquisitions?

Ongoing at Cisco we will do innovation through internal development, including internal start-ups, through strategic partnership, and acquisitions and intergrating all of the above. NDS is one of multiple moves that we will make, not just in the video space for us, but it was also a major cloud play for us and a major social media move if we do this right. It plays right into the sweet spot of our service providers and content providers. Our ideal target has not changed: 100 engineers with a product that is just about to come to market, where our customers say that if they were owned by Cisco they’d buy a lot of it. The $5 billion price is higher than what we’ve traditionally paid, but it’s on the order of Stratacom and Tandberg, for which we paid about $3 billion each. But our ideal target is smaller, and you’ll see us continue to be selectively active in the market.

You’re said to be heavily focused on gross margins. One point that came up on UCS: You say it’s growing like crazy, off a low base, but one of the analysts pointed out this week that it has the overall effect of bringing down the gross margin a bit. How are you addressing that?

That’s true on specifics. UCS by itself, even with a premium versus our peers, is going to be below our gross margin of 65 percent. So, by definition, as you add more of those it has a major effect on gross margin. When you combine UCS with our Nexus 2000 and 5000 switches the blended version gets the margin higher, though still not as high as the overall gross margin. Our challenge on gross margin, and the reason why we’re going to focus aggressively on each gross margin area this year, is that it’s more of a product mix issue than it is an issue of pressure on gross margins on any specific product. In terms of the base for UCS, it’s getting close to a $2.5 billion run rate and probably closer to $3 billion by now. So the base is getting larger, and in North America our market share is close to 20 percent and globally our best guess is 14 percent as best as we can tell. So that’s pretty good execution.

At this point, as he did last time we talked, Chambers asked me what song I’d pick to musically illustrate Cisco’s quarter, sticking with a tradition started a few quarters back and continued last quarter. I told him I wanted it to be a surprise, but that I think he’d like it.

This quarter, I dedicate to Cisco Ringo Starr’s “It Don’t Come Easy.” The hard work of transformation done, Cisco is finding that, despite being leaner and meaner, it has still got some way to go and finds itself in a tough market. In the video below, Ringo performs with fellow Beatle George Harrison at the 1971 Concert for Bangladesh. As everyone at Cisco knows, nothing worth having comes easy.

Revenues were $11.6 billion, up 6.6 percent from the year-ago quarter, while per-share earnings on a non-GAAP basis were 48 cents, versus 42 cents a year ago, up 14 percent. That’s essentially right in line with what the consensus of Wall Street analysts had expected Cisco to report: $11.58 billion in sales, and 47 cents in per-share of earnings, with a penny-per-share beat on the EPS front.

I’m going quickly through the numbers, but here’s the announcement in full so you can look for yourselves. I’ll be dialing in to the conference call shortly and will be talking to CEO John Chambers after that.

Cisco shares are headed lower in after-hours trading. As of 4:45 pm ET, shares are down 48 cents to $18.30, or 2.5 percent.

Update: Cisco just issued its guidance on the conference call. CFO Frank Calderoni says that Cisco expects to report revenue to grow 2 percent to 5 percent year over year in the fourth quarter. It also expects to earn a gross margin in the range of 61 percent to 62 percent on a non-GAAP basis. Operating margins should be 26.5 percent to 27.5 percent, up about a point from the year-ago quarter. EPS will be 44 to 46 cents a share. The outlook is lower than the consensus of 49 cents.

On this, the shares have continued to fall after hours. Cisco shares are now, as of 5:02 pm ET, down more than 8 percent, or $1.55, to $17.23. Investors clearly don’t like what they see. Tomorrow looks like it’s going to be a rough day.

SAN JOSE, CA–(Marketwire -05/09/12)- Cisco (CSCO)

Q3 Net Sales: $11.6 billion (increase of 7% year over year)

Q3 Net Income: $2.2 billion GAAP (increase of 20% year over year); $2.6 billion non-GAAP (increase of 11% year over year)

Q3 Earnings per Share: $0.40 GAAP (increase of 21% year over year); $0.48 non-GAAP (increase of 14% year over year)

Cisco, the worldwide leader in networking that transforms how people connect, communicate and collaborate, today reported its third quarter results for the period ended April 28, 2012. Cisco reported third quarter net sales of $11.6 billion, net income on a generally accepted accounting principles (GAAP) basis of $2.2 billion, or $0.40 per share, and non-GAAP net income of $2.6 billion, or $0.48 per share.

“We delivered solid results this quarter with record revenue and non-GAAP earnings per share,” said John Chambers, Cisco chairman and CEO. “We are successfully executing against our long-term strategic plan of growing profit faster than revenue, and in a cautious IT spending environment, we continue to outperform our competitors.”

Chambers continued, “In a world of clouds, video and mobile device proliferations, the role of the intelligent network has never been greater and our value proposition with our customers is the strongest it has ever been. Our vision and strategy is focused on the right market transitions, and I want to thank our shareholders, employees, customers and partners for their ongoing commitment to Cisco.”

GAAP Results

Q3 2012 Q3 2011 Vs. Q3 2011
—————- —————- —————
Net Sales $ 11.6 billion $ 10.9 billion 6.6%
Net Income $ 2.2 billion $ 1.8 billion 19.8%
Earnings per Share $ 0.40 $ 0.33 21.2%

Non-GAAP Results

Q3 2012 Q3 2011 Vs. Q3 2011
————— ————— —————
Net Income $ 2.6 billion $ 2.3 billion 10.9%
Earnings per Share $ 0.48 $ 0.42 14.3%

Net sales for the first nine months of fiscal 2012 were $34.4 billion, compared with $32.0 billion for the first nine months of fiscal 2011. Net income for the first nine months of fiscal 2012, on a GAAP basis, was $6.1 billion, or $1.13 per share, compared with $5.3 billion, or $0.94 per share, for the first nine months of fiscal 2011. Non-GAAP net income for the first nine months of fiscal 2012 was $7.5 billion, or $1.38 per share, compared with $6.8 billion, or $1.22 per share, for the first nine months of fiscal 2011.

A reconciliation between net income on a GAAP basis and non-GAAP net income is provided in the table on page 5.

Cisco will discuss third quarter results and business outlook in a conference call and webcast at 1:30 p.m. Pacific Time today. Call information and related charts are available at http://investor.cisco.com.

Other Financial Highlights

Cash flows from operations were $3.0 billion for the third quarter of fiscal 2012, compared with $3.1 billion for the second quarter of fiscal 2012, and compared with $3.0 billion for the third quarter of fiscal 2011.

Cash and cash equivalents and investments totaled $48.4 billion at the end of the third quarter of fiscal 2012, compared with $46.7 billion at the end of the second quarter of fiscal 2012, and compared with $44.6 billion at the end of fiscal 2011.

During the third quarter of fiscal 2012, Cisco repurchased 27 million shares of common stock under its stock repurchase program at an average price of $20.28 per share for an aggregate purchase price of $550 million. As of April 28, 2012, Cisco had repurchased and retired 3.6 billion shares of Cisco common stock at an average price of $20.47 per share for an aggregate purchase price of approximately $74.3 billion since the inception of the stock repurchase program. The remaining authorized amount for stock repurchases under this program is approximately $7.7 billion with no termination date. During the third quarter of fiscal 2012, Cisco also paid a cash dividend of $0.08, or $432 million.

Days sales outstanding in accounts receivable (DSO) at the end of the third quarter of fiscal 2012 were 31 days, compared with 31 days at the end of the second quarter of fiscal 2012, and compared with 37 days at the end of the third quarter of fiscal 2011.

Inventory turns on a GAAP basis were 11.5 in the third quarter of fiscal 2012, compared with 11.1 in each of the second quarter of fiscal 2012 and the third quarter of fiscal 2011. Non-GAAP inventory turns were 11.1 in the third quarter of fiscal 2012, compared with 10.8 in the second quarter of fiscal 2012, and compared with 10.3 in the third quarter of fiscal 2011.

Select Global Business Highlights

Cisco announced its intent to acquire NDS Group Ltd., a provider of video software and content security solutions. The acquisition is expected to help Cisco’s ability to transform how service providers and media companies deliver next-generation video experiences to subscribers.
Cisco completed the acquisition of privately held Lightwire, Inc. Lightwire develops advanced optical interconnect technology for high-speed networking applications. The acquisition is expected to allow Cisco to deliver cost-effective, high-speed networks with the next generation of optical connectivity.
Cisco acquired privately held ClearAccess, Inc. The acquisition enhances Cisco’s network management capabilities and enables service providers to better deliver, manage and monetize their services.
Cisco announced strategic investments in Brazil to foster innovation, transformation and socio-economic development.

Cisco Innovation

Cisco announced it has updated its cloud-ready switching portfolio to enhance network virtualization with simplicity and scale.
Cisco announced a successful demonstration and validation of its coherent 100G dense wavelength division multiplexing solution, exceeding 3,000 km in reach without the need for regeneration. This distance is 50 percent farther than any non-Raman alternative solution on the market today.
Cisco introduced the industry’s first carrier-grade, end-to-end Wi-Fi infrastructure to deliver next-generation hotspots. The technology is designed to deliver seamless mobile experiences and enables operators to support a continuing expansion of mobile traffic, devices and new services.
Cisco announced innovations across the Cisco Unified Computing System® (UCS) that quadruple memory capacity, double switching capacity and simplify management for large-scale Cisco UCS® deployments.
Cisco introduced new Linksys Smart Wi-Fi Routers with app-enabled capabilities for new home experiences. The three new routers offer wireless performance and support for Cisco Connect® Cloud.
Cisco announced it expanded its small business product portfolio with new wireless access points, routers, switches, unified communications and partner-managed service offerings.
Cisco and NetApp announced FlexPod was the first data center infrastructure solution to be validated by Microsoft for the updated Microsoft Private Cloud Fast Track 2.0 program.

Select Customer Announcements

TELUS announced it has deployed key components of the Cisco Videoscape™ platform to extend its Optik TV services to mobile devices.
Cisco announced it has been chosen by Fastway Transmissions Private Ltd. to facilitate cable digitization deployment across its customer base in India. Fastway is expected to deploy more than two million next-generation digital set-top boxes from Cisco during the next two years.
Magyar Telekom rolled out 4G LTE services with Cisco mobile internet solutions. Magyar Telekom is Hungary’s largest telecommunications company.
IPLAN chose Cisco technology for its newest data center which is expected to be launched in June 2012. IPLAN is a leader in telecommunications and cloud computing services for small and medium-sized businesses in Argentina.
Videotron launched its enhanced illico digital TV service with Cisco’s HD set-top box platform. Videotron is a leading Canadian telecommunications operator providing communications and broadband entertainment services.
Peru Credit Bank implemented the Cisco Unified Communications system to increase business flexibility and reduce costs.
Kabel Deutschland (KD) selected Cisco CRS-3 routers for its Internet Protocol Next-Generation Network core to meet demand for video and broadband services. KD is Germany’s largest cable operator.
Netelligent announced that it will collaborate with Desktone, Inc. to offer cloud-hosted virtual desktops. These cloud-based solutions will include Cisco UCS, the Desktone desktops-as-a-service (DaaS) platform and NetApp storage systems.

Editor’s Note:

Q3 FY 2012 conference call to discuss Cisco’s results along with its business outlook will be held at 1:30 p.m. Pacific Time, Wednesday, May 9, 2012. Conference call number is 888-848-6507 (United States) or 212-519-0847 (international).
Conference call replay will be available from 4:30 p.m. Pacific Time, May 9, 2012 to 4:30 p.m. Pacific Time, May 16, 2012 at 866-493-8039 (United States) or 203-369-1749 (international). The replay also will be available via webcast from May 9, 2012 through July 20, 2012 on the Cisco Investor Relations website at http://investor.cisco.com.
Additional information regarding Cisco’s financials, as well as a webcast of the conference call with visuals designed to guide participants through the call, will be available at 1:30 p.m. Pacific Time, May 9, 2012. Text of the conference call’s prepared remarks will be available within 24 hours of completion of the call. The webcast will include both the prepared remarks and the question-and-answer session. This information, along with GAAP reconciliation information, will be available on the Cisco Investor Relations website at http://investor.cisco.com.

About Cisco

Cisco (CSCO) is the worldwide leader in networking that transforms how people connect, communicate and collaborate. Information about Cisco can be found at http://www.cisco.com. For ongoing news, please go to http://newsroom.cisco.com.

It has been relatively quiet there in the Utah desert ever since, which is odd, because it had been such a chatty company, throwing parties to kill old outdated identities, holding complicated math contests to guess its new name, things like that.

Now it’s about to get noisy again. Effective today, you’re going to start hearing a lot more from Domo and from its employees, and not because its new product is ready. Not quite. (James tells me the company will be talking about it this summer.)

No, starting today, all employees — everyone in the company — will be required as a condition of employment to get seriously engaged on social media in all its various forms in order to make Domo part of the wider conversations taking place on Twitter and Facebook and Foursquare and Pinterest and the rest. It’s called the #Domosocial experiment, and will last eight weeks. James puts it thusly in a post on the company blog:

“The program is designed to get everyone here engaged with and learning from consumer and social technologies. The goal is to help us develop a better product, understand the viral nature of web offerings more effectively, assist in getting the Domo brand out there, enable better customer conversations and see what impact it all has on our business.”

Part of the intent, James told me, is a matter of geography and culture. Being based in Utah, Domo employees are probably better than their equal numbers at other Utah start-ups when it comes to being facile with the ebb and flow of the daily global conversation that takes place on all the social spaces. But they’re probably not as familiar with it all as their rivals in Silicon Valley.

James has seen this sort of thing before. He started Omniture in Utah in 1996 and by 2009 sold it to Adobe for $1.8 billion. “With Domo, I wanted to ensure that we are every bit as adept at understanding and leveraging social as any other bleeding-edge startup,” he wrote.

But on top of that, he’s turning the effort into a live case study to see just how much of a difference it makes in Domo’s business prospects, if any. The company will track important metrics and share them with the world. “We’ll track how things change week after week. The good, the bad and the ugly, it’s all going to be public,” he told me.

Though not about everything. There’s a list of “don’ts.” Don’t tweet about deals in the pipeline, don’t debate with or quarrel with the boss on Facebook. Don’t post about meetings or leak financial information.

What do employees stand to benefit? The best among them will be getting cash rewards for their performance, extra days off, that sort of thing.

What does he expect? He’s been exploring social media pretty seriously for the last six months, and occasionally now gets stopped in the local mall by people who recognize him. “You start having influence in ways you didn’t before,” James told me. He learned with a 10-page article he shared on Twitter, where he has about 12,000 followers, that he experienced a 15 percent click-through rate. “The influence will increase dramatically,” he told me. Also, Domo’s development team will have their eyes opened to the finer points of what works and what doesn’t with social features that are under development at Domo. “We don’t want to re-invent what Facebook and Twitter did, but if you’re not intimately familiar with how those things work, then how can you learn from their mistakes?”

Less than nine months later, she’s expanding, VentureWire has learned, adding financials and order management to Kenandy’s core software, changing the software’s name to Social ERP (for Enterprise Resource Planning) and targeting customers that make products.

Read the rest of this post on the original site »

Today, Birst will announce that it has taken a $26 million round of funding led by Sequoia Capital. It is Birst’s fourth round of funding, and existing investors including Hummer Winblad and DAG Ventures are also participating, but it’s not a traditional Series D. Sequoia is investing with its Growth Fund, and that creates a slightly different investment dynamic, Doug Leone, a Sequoia Capital partner, told me.

Here’s what happened: Sequoia had already invested in Birst with its Venture fund. But over the last year or so, Leone started seeing something interesting. Companies that Leone is involved with, either as an investor or as a director — specifically Aruba Networks and Rackspace — had selected Birst after a business-intelligence bake-off versus other vendors. As a director of those two companies, he was able to see the close-up evaluation they did in making their selection.

On top of that, Leone noticed that Birst kept bringing in more customers per quarter, and that those customers were putting ever more dollars on the table. “We decided to make a preemptive offer with our Growth Equity Fund,” Leone told AllThingsD yesterday. “We saw what we thought was the knee of the curve. We saw quite clearly that we were at the beginning of a phase of hypergrowth for this company.”

The main difference between the venture-capital and growth-equity investments is that growth investments are made in companies that have growing revenue and a proven business model, whereas VC investments are made in start-ups that are just getting off the ground. It’s sort of a statement of faith in where Birst appears to be going. “It’s like a later-stage investment. It’s the last money the company is going to need.”

It’s not a small statement, either. This $26 million round is bigger than its previous three rounds combined, and brings its total capital raised to $46 million.

So what’s it going to do with all that money? CEO Brad Peters said he’s seeing a significant acceleration. Customers like the flexibility of a cloud-type BI solution, even if it’s running on-premise. “We need to get Birst out there. We need to build our sales organization, we need to build our distribution channel.” He also said a big announcement around infrastructure is pending, in order to better help Birst — his words — “catch the big-data wave.”

And will it join the parade of companies going public after Facebook? Not right away, Peters said. “We’re on that trajectory, but it won’t happen this year, or probably next. Maybe just after that,” he told me. “We’re building this to be a standalone, independent company.”

The textbook case for BI is comparing data on marketing spend to deals. If you find you’re spending a lot of money on one type of marketing campaign that seems not to be generating leads and deals, and not enough on one that seems to be working better, you can see the pattern and make needed changes. It’s all about synthesizing raw data and turning it into information you can make a decision on, Peters told me last year.

There’s a lot of venture-capital money flowing into young BI companies. Both Good Data and Domo have raised a lot on their own, and there are probably other companies I haven’t thought of, not to mention the large software players like Oracle and SAP, who do business intelligence, and IBM, which tends to favor the word “analytics” over “business intelligence.” Hewlett-Packard’s Autonomy business unit could also arguably be considered a business-intelligence outfit. Given all that activity, it just might be intelligent to to keep watching this business.

Flying under the radar — and away from the eyes of the tech press that might have otherwise paid it attention — was sort of the plan, Demandforce chief marketing officer Patrick Barry told me in an interview a few minutes ago. “We built this company the old-fashioned way. That meant putting our customers first. PR and other things were not a priority. Our customers don’t read tech sites. We focused our efforts on reaching out to our customers.”

Whatever it was, it worked. Demandforce, launched in 2003, had attracted $11.8 million in venture capital investments, primarily from Benchmark Capital. By the time of the acquisition announced today, the San Francisco-based outfit had 300 employees, a profitable business with a run rate of $60 million in annual sales and — get this — $12 million in the bank.

So what does Demandforce do? Marketing for small businesses: Dentist’s offices and hair salons and auto-repair shops and scores of other types of small businesses that make up the majority of the U.S. economy and need help reaching out to their customers.

Demandforce, Barry told me, built bridges to the data stored in old-school marketing software programs — and there are dozens of them — that would typically run on desktop machines, freeing up the data and moving it into the cloud.

From there, it would apply its own marketing algorithms to the business: managing appointment reminders, asking customers for feedback and publishing customer reviews. So far, Demandforce has syndicated 1.5 million reviews to Google and CitySearch and other sites like them that accept Demandforce content.

Intuit said in a statement that it will make Demandforce into a new division in its Small Business Group; it will continue to be led by Rick Berry, Demandforce’s president and founder. He will report to Kiran Patel, the executive vice president and general manager of that group.

After the deal closes, Intuit said, it expects Demandforce to add one to two points to its revenue growth in fiscal 2013, and to be neutral or slightly dilutive this year. Intuit shares rose 44 cents, or less than 1 percent, to $58.04.

Nesuite, based in San Mateo, Calif., reported per-share earnings of 6 cents on a non-GAAP basis, double the consensus that analysts had projected. Revenue for the quarter was $69.3 million, which also beat the consensus and represented year-over-year growth of 30 percent. Cash flow from operations, at $10.6 million, was up 58 percent. Calculated billings — the sum of revenue plus the change in deferred revenue, and a key indicator of future revenue given Netsuite’s subscription-based business — rose 26 percent to $78 million.

Netsuite shares rose during the regular trading session to $50.47, up $2.45 or more than 5 percent, before the results were reported. The shares fell 89 cents or 1.75 percent in after-hours trading.

Netsuite’s statement is below.

NETSUITE ANNOUNCES FIRST QUARTER 2012 FINANCIAL RESULTS

• Record Q1 Revenue of $69.3 Million, a 30% Year-over-Year Increase

• Recurring Revenue Grows 27% Year-over-Year to $58.0 Million

• Non-GAAP Net Income Grows 116% Year-over-Year

• Operating Cash Flow Grows 58% Year-over-Year to $10.6 Million

SAN MATEO, Calif. – April 26, 2012 – NetSuite Inc. (NYSE: N), the industry’s leading provider of cloud-based financials / ERP software suites, today announced operating results for its first quarter ended March 31, 2012.

Total revenue for the first quarter of 2012 was $69.3 million, representing a 30% increase over the prior year. Subscription and support revenue for the first quarter of 2012 was $58.0 million, representing a 27% increase over the same period in the prior year.

Calculated billings, defined as revenue plus the change in deferred revenue, were $77.9 million for the first quarter of 2012, a 26% increase over the first quarter of 2011.

Cash flow from operations was $10.6 million in the first quarter of 2012, an increase of $3.9 million, or 58%, over the same period last year.

On a GAAP basis, net loss for the first quarter of 2012 was $7.7 million, or $(0.11) per share, as compared to a net loss of $7.7 million, or $(0.12) per share, in the first quarter of 2011.

Non-GAAP net income for the first quarter of 2012 was $4.1 million, or $0.06 per share, as compared to non-GAAP net income of $1.9 million, or $0.03 per share, in the first quarter of 2011.

“NetSuite’s Q1 results continue the momentum of 2011 as companies large and small accelerate their move from pre-Web client/server solutions to NetSuite’s cloud-based offerings. Our great Q1 reinforces that this migration from legacy offerings like Microsoft Dynamics GP/Great Plains, Sage and SAP to NetSuite continues unabated in 2012,” said Zach Nelson, CEO of NetSuite. “All companies, even non-technology companies, have realized they are cloud companies, and to effectively transition their business to this new model of reaching customers, they need to build their enterprise around an application suite like NetSuite that was designed to support operations in the Cloud Age.”

Now, Google is formally jumping into the cloud-based file storage and syncing business, offering a service called Google Drive, which will compete with products like Dropbox and others by offering lower prices and different features. It works on multiple operating systems, browsers and mobile devices, including those of Google’s competitors Apple and Microsoft. There are apps for Windows, Mac and mobile devices that automatically sync files with Google Drive.

I’ve been testing Google Drive, which launches today, and I like it. It subsumes the editing and file-creation features of Google Docs, and replaces Google Docs (though any documents you have stored there carry over). In my tests — on a Mac, a Lenovo PC, a new iPad and the latest Samsung Android tablet — Google Drive worked quickly and well, and most of its features operated as promised. At launch, it’s available for Windows PCs, Macs and Android devices. The version for the iPhone and iPad is planned for release soon.

Google Drive, which can be found at drive.google.com, offers users 5 gigabytes of free storage, compared with 2 gigabytes free for the popular Dropbox, and equal to the free offering from another cloud storage and syncing service I like, SugarSync. That’s enough for thousands of typical documents, photos and songs.

Prices for additional storage drastically undercut Dropbox and SugarSync. For instance, 100 GB on Google Drive costs $4.99 a month. By contrast, 100 GB costs $14.99 monthly on SugarSync and $19.99 on Dropbox. Google Drive will offer huge capacities, in tiers, all the way up to 16 terabytes. (A terabyte is roughly 1,000 gigabytes.) And if you buy extra storage for Google Drive, your Gmail quota rises to 25 GB.

But one of Google’s biggest rivals isn’t standing still. Microsoft is expanding both the features and capacity of its little-known SkyDrive cloud storage service as well. That product started out as a free, fixed-capacity (25 gigabytes) online locker mostly for users of the stripped-down, cloud-based version of Microsoft Office, though it also has been available as an app for Windows Phone smartphones and for iPhones. It’s giving away even more free storage than Google — 7 GB, though that is a cut from what it used to offer free. It also is charging less than Google. For instance, you can add 100 gigabytes for $50 a year. And users of the old version get to keep their 25-gigabyte free allotment. I wasn’t able to test this new version of SkyDrive for this column. It also is offering syncing apps for Windows and Mac.

Google Drive is meant as an evolution of Google Docs. While you could previously upload a file to Google Docs using your Web browser, for Google Drive, the company is providing free apps for Mac and Windows that, like Dropbox, do this for you. They create special folders that sync with your cloud-based repository and with the Web version of the product. So, you can drag a file into these local folders on your computer and that file will be uploaded to your cloud account and will rapidly appear in the Web version of Google Drive, in the Google Drive folders on your other computers, and in the Google Drive apps on Android, iPhone and iPad devices. These local apps also sync any changes to the files you make.

One big difference between Dropbox and Google Drive is you can edit or create files in the latter, rather than merely storing or viewing them. This is because Google Drive includes the rudimentary word processor, spreadsheet, presentation and other apps that make up Google Docs.

But there is a catch. If your stored document is in a Microsoft Office format, you can only view it. To edit it, you have to click a command to convert the file to Google’s own formats, or choose a setting that converts Microsoft Office files when uploaded. But this latter feature only works when uploading from the website.

Google Drive also is missing some features of SugarSync I like. The latter doesn’t require you to place files in a special folder; it syncs the folders you already use on your PC and Mac. Also, unlike SugarSync, Google Drive doesn’t let you email files directly into your cloud locker.

Google Drive allows you to share files and folders, and collaborate with others. You can also email files as attachments. People with whom you share files can be allowed different rights: To view, comment, or edit them. You can also keep the files private.

Because Google has run into hot water over keeping users’ information private, some people may be reluctant to trust their files to Google Drive. But the company insists that, while it does process and store your files, no human can see them and, at least today, the files aren’t used to target advertising at users. The company notes no file can be placed in Google Drive unless the user wants it there.

The service does a very good job of searching files, even finding words inside PDF or scanned documents. The company claims it can find images when you type in words describing them, like “bridge” or “mountain”—even if those words don’t appear in the image’s file name. But I found this mostly worked with photos of famous places or people Google has collected via its Google Goggles product. Google Drive failed to find images with generic file names on almost all of my own pictures, even when they included things like mountains or other common objects.

Google Drive did a good job in my tests with videos. It converts nearly every common video format into a format it can play, right inside its website. This process can take some time. While Google Drive can store music, it can’t play it directly via its website.

Google’s new service also works with third-party document creation and editing apps that are built to work with it. I used one, called Balsamiq Mockups, to create a quick wire-frame diagram.

I can recommend Google Drive to consumers looking for cloud-based storage, with the added bonus of integrated editing, at lower prices. But the new Microsoft SkyDrive also seems worth a try.

Email Walt at mossberg@wsj.com.

]]> http://allthingsd.com/20120424/google-stores-syncs-edits-in-the-cloud/feed/ 0 http://allthingsd.com/20120423/adobes-latest-creative-suite-floats-into-the-cloud/ http://allthingsd.com/20120423/adobes-latest-creative-suite-floats-into-the-cloud/#comments Mon, 23 Apr 2012 18:07:08 +0000 Arik Hesseldahl http://allthingsd.com/?p=198964 Today, the creative production software giant Adobe is taking the wraps off the latest version of its huge collection of products — collectively known as Creative Suite 6, or CS6 — at an event in San Francisco that is being streamed live on the Web.

The applications are usually expensive, and often prohibitively so, for the people who want to use them the most: $2,000, give or take, is a lot to invest for, say, a freelance Web and graphic designer. And this has fact encouraged more than a bit of software piracy as a result.

Today’s launch provides a new answer to that problem. Having previously unveiled subscription applications that run in a browser — I’m thinking specifically of the one I’ve used a little, called Photoshop Express — Adobe says it will launch a cloud-based version of its entire creative suite of applications. That includes InDesign, Illustrator, Dreamweaver, Photoshop and the rest. It’s being called Create Cloud, and the price is $49.99 a month with an annual contract. Members will have access to download and install every new Adobe CS6 application, including two new ones, Adobe Muse and Adobe Edge Preview.

The service integrates Adobe’s creative tablet applications, including Photoshop Touch, into the daily workflow. Files used in one place can be accessed from any device. Mobile apps that users build can be quickly offered up to Apple’s iTunes or Google’s Android Marketplace.

Creative Cloud members will also get access to upgrades to the applications before they’re generally introduced into the main creative suite; they’ll also get early access to new products.

Adobe CEO Shantanu Narayen, who spoke last year at the ninth D conference, went on CNBC this morning to talk about the cloud service. I’ve embedded the video below:

]]> http://allthingsd.com/20120423/adobes-latest-creative-suite-floats-into-the-cloud/feed/ 0 http://allthingsd.com/20120419/and-its-off-splunk-rockets-108-percent-in-ipo-debut/ http://allthingsd.com/20120419/and-its-off-splunk-rockets-108-percent-in-ipo-debut/#comments Thu, 19 Apr 2012 21:51:04 +0000 Arik Hesseldahl http://allthingsd.com/?p=198276 Here’s another thing about big data: How about a big IPO debut? That’s what shareholders of Splunk got today when the company’s stock opened trading today on the Nasdaq.

Priced yesterday at $17 a share, they closed their first day of trading at more than twice that: $35.08, making for an improvement of more than 108 percent.

That should bring big smiles to the faces of principals and partners of its two biggest shareholders: Sevin Rosen Funds and August Capital each hold stakes in Splunk worth, on paper, north of $570 million.

Splunk’s specialty, as CEO Godfrey Sullivan told me last year, is harvesting data from machines: Web servers or any industrial or other machinery that does something several times a minute, hour or day. If it can be measured it can generate data — data that, when examined, can be made useful.

Here’s a bit of useful data: $240 million. That’s what the 6.9 million shares Sullivan owns are worth on paper as of today’s closing price. I wonder if there’s a way to use Splunk to measure how many times he and his employees smiled today?

]]> http://allthingsd.com/20120419/and-its-off-splunk-rockets-108-percent-in-ipo-debut/feed/ 0 http://allthingsd.com/20120419/splunk-big-datas-first-ipo-begins-trading-on-nasdaq-today/ http://allthingsd.com/20120419/splunk-big-datas-first-ipo-begins-trading-on-nasdaq-today/#comments Thu, 19 Apr 2012 13:31:50 +0000 Arik Hesseldahl http://allthingsd.com/?p=198076 Sometime today, shares of the data analysis company Splunk will start trading on the Nasdaq National Market in New York, after pricing last night at $17 a share. The company’s offering has raised about $230 million.

Splunk is not your traditional big-data company, in that it is not running some variant of Hadoop, like so many upstart companies in that space. Its specialty, as CEO Godfrey Sullivan told me last year, is harvesting data from machines; they can be Web servers or they can be air-conditioning units. Its cloud-based database grabs all the data generated by the machine in the course of its operation and generates alerts. Those alerts can tell a human operator things like “everything’s cool” or “ouch, things are not so cool. I need help.”

If a machine does something that repeats many times a day, hour or minute, then it is generating data that can be measured. And if it can be measured, there’s a pretty good chance that you can make that data useful, using Splunk.

Big customers include cloud concerns like Salesforce.com and the Web gaming outfit Zynga. Wireless companies like MetroPCS and T-Mobile use it to monitor their wireless networks. Several government agencies use it to help watch for attacks on their networks. In all, it has about 3,700 customers in 75 countries.

So, who stands to get rich today?

The two biggest shareholders are the Sevin Rosen Funds and August Capital, which each own 20.4 percent of the shares, worth just a whisker less than $280 million at the offering price. Behind them is JK&B Capital, which owns a 17.6 percent stake worth $240 million. Ignition Partners has a 12.1 percent stake worth $165 million. Sullivan, the CEO, has an 8.2 percent share worth $118 million. Another name that jumped out at me: Patrick McGovern, head of the tech research and publishing house IDG, has 240,666 shares worth more than $4 million. (Update: I’ve since learned it’s a different Patrick McGovern. Sorry about that.)

]]> http://allthingsd.com/20120419/splunk-big-datas-first-ipo-begins-trading-on-nasdaq-today/feed/ 0 http://allthingsd.com/20120418/eucalyptus-creator-of-roll-your-own-cloud-platform-raises-30-million/ http://allthingsd.com/20120418/eucalyptus-creator-of-roll-your-own-cloud-platform-raises-30-million/#comments Wed, 18 Apr 2012 14:08:23 +0000 Arik Hesseldahl http://allthingsd.com/?p=197697 Not everyone wants to run their applications on the public cloud. Their reasons can vary widely. Some companies don’t want the crown jewels of their intellectual property leaving the confines of their own premises. Some just like having things run on a server they can see and touch.

But there’s no denying the attraction of services like Amazon Web Services or Joyent or Rackspace, where you can spin up and configure a new virtual machine within minutes of figuring out that you need it. So, many companies seek to approximate the experience they would get from a public cloud provider on their own internal infrastructure.

It turns out that a start-up I had never heard of before this week is the most widely deployed platform for running these “private clouds,” and it’s not a bad business. Eucalyptus Systems essentially enables the same functionality on your own servers that you would expect from a cloud provider.

Eucalyptus said today that it has raised a $30 million Series C round of venture capital funding led by Institutional Venture Partners. Steve Harrick, general partner at IVP, will join the Eucalyptus board. Existing investors, including Benchmark Capital, BV Capital and New Enterprise Associates, are also in on the round. The funding brings Eucalyptus’ total capital raised to north of $50 million.

The company has an impressive roster of customers: Sony, Intercontinental Hotels, Raytheon, and the athletic-apparel group Puma. There are also several government customers, including the U.S. Food and Drug Administration, NASA, the U.S. Department of Agriculture and the Department of Defense.

In March, Eucalyptus signed a deal with Amazon to allow customers of both to migrate their workloads between the private and public environments. The point here is to give companies the flexibility they need to run their computing workloads in a mixed environment, or move them back and forth as needed. They could also operate them in tandem.

Key to this is a provision of the deal with Amazon that gives Eucalyptus access to Amazon’s APIs. What that means is that you can run processes on your own servers that are fully compatible with Amazon’s Simple Storage Service (S3), or its Elastic Compute cloud, known as EC2. “We’ve removed all the hurdles that might have been in the way of moving workloads,” Eucalyptus CEO Marten Mickos told me. The company has similar deals in place with Wipro Infotech in India and CETC32 in China.

]]> http://allthingsd.com/20120418/eucalyptus-creator-of-roll-your-own-cloud-platform-raises-30-million/feed/ 0 http://allthingsd.com/20120412/in-pc-numbers-hp-investors-see-a-light-at-the-end-of-the-tunnel/ http://allthingsd.com/20120412/in-pc-numbers-hp-investors-see-a-light-at-the-end-of-the-tunnel/#comments Thu, 12 Apr 2012 23:38:23 +0000 Arik Hesseldahl http://allthingsd.com/?p=196134 It’s been awhile since Hewlett-Packard investors have had much to cheer about, but when they got some good news, they took it in spades.

HP shares surged by more than 7 percent, or $1.69, today to $25.10, mainly on a positive report on the state of its personal computer business from the market research firms Gartner and IDC.

As I noted yesterday, HP saw its share of the global market grow fractionally, according to the reckoning of Gartner, at the expense of Dell, Acer and Asus, while China-based rival Lenovo grew even more. IDC saw similar results, and both research houses were surprised to see the overall market grow in the first quarter of the year where a market decline had been expected.

That was enough to give HP shares a long-awaited jolt. So far in 2012, HP shares have fallen a little less than 3 percent, but that comes on top of the ridiculous 40 percent drop they suffered during 2011.

Much of that decline was suffered on Aug. 19, 2011, a day after the company, under then-CEO Léo Apotheker, missed its quarterly forecasts, spent $12 billion to acquire the British software firm Autonomy and floated an ill-advised plan to spin off the very PC operations that gave investors a rare moment to cheer. Looking back now, it does make for some irony, no?

To be sure, HP’s share price has had a better than average week. On days when the Dow was mostly in the red, HP has been one of the few stocks on the board showing green all week.

And frankly an uptick in the PC business, while welcome indeed, isn’t exactly going to fix HP in any fundamental way. At least not yet. PC sales were 31 percent of overall sales in 2011, and declined slightly over the prior year. And while that made HP’s Personal Systems Group the biggest business unit at HP last year — and now combined with printers it’s even bigger — profits both in PCs and in printers are seriously under attack.

The hope lies in the enterprise and in services, and maybe in the cloud. Profit margins in the enterprise business and in the services group were roughly twice what they were in PCs. HP also made a big announcement on the cloud computing front earlier this week that would seem to put it on course to compete with the likes of Amazon in providing computing capacity in a similar for-hire fashion as the Web retailer does with its Web Services unit.

It’s hard to know how profitable that business is for Amazon because it doesn’t disclose its operational size and profit margins and lumps that operation into its $1.4 billion category labeled “other.” However it’s worth noting — as HP surely has — that Amazon’s “other” category grew by 73 percent in 2011 and nearly tripled in size from 2009. There may be a real light at the end of that tunnel yet, but there’s lot’s of work to do.

]]> http://allthingsd.com/20120412/in-pc-numbers-hp-investors-see-a-light-at-the-end-of-the-tunnel/feed/ 0 http://allthingsd.com/20120412/fusion-io-brings-flash-madness-to-workstations-and-movies-like-hugo/ http://allthingsd.com/20120412/fusion-io-brings-flash-madness-to-workstations-and-movies-like-hugo/#comments Thu, 12 Apr 2012 14:35:02 +0000 Arik Hesseldahl http://allthingsd.com/?p=195840 After working mostly in the realm of servers, Fusion-io — the founding member of the AllThingsD Flash Madness Club and last summer’s hot IPO — said today that it is bringing its flash technology to workstations. It is calling the product ioFX.

One early customer is Rob Legato, the visual effects supervisor who won an Academy Award for his work on the Martin Scorsese-directed hit motion picture “Hugo.” Legato will be talking about ioFX with Fusion-io chief scientist and Apple co-founder Steve Wozniak at a conference in Las Vegas next week.

Fusion does some cool stuff with flash memory. Here’s the part where I roll out the old metaphor that has served me so well: In pretty much any computer, you can think of the processor as a fast-moving, highly efficient, type-A personality, constantly in a hurry, and always waiting impatiently for the rest of the system to give it more work to do. The slowpoke in the deal is the hard drive, which, though it’s already spinning at a super fast rate, just can’t get data to the processor fast enough. So the processor sits around, tapping its foot and looking at its watch, waiting for the other parts of the system that feed it data to work to keep up.

In high-performance computing, where there’s more data to be crunched than in most average computing situations, this is sort of a big deal. You want the processor to be as busy as possible — mainly because the systems are so expensive, and you want to get your money’s worth out of them — but also because jobs get done faster.

So Fusion-io’s stock in trade is a series of insert cards that bring flash memory right up next to the processor. The flash chips grab great big armloads of data and hold on to it, handing it off to the processor in a way that keeps it happy and busy and not impatiently waiting — at least not so much.

We’ve seen the technology brought to bear at places like Credit Suisse, which added Fusion’s flash cards to its trading systems. And its technology is also used in data centers belonging to Facebook and Apple.

On top of that, Fusion has relationships with all the big server vendors: Hewlett-Packard, IBM, Dell and SuperMicro all sell systems with Fusion-io on board.

Workstations are essentially heavily tricked-out PCs that are used primarily in two professions: Animation and special-effects work for movies and TV and computer-assisted design and modeling, used by folks who design buildings and cars and planes and pretty much anything else you can think of. They have the same problem that servers have — agitated processors constantly waiting for the rest of the system to catch up with them.

At this point, none of the workstation vendors are offering the card as an option, but if you’ve got a professional workstation — like, say, an Apple Mac Pro, which has three PCI Express slots — you might add one of these cards and speed up your work. In the meantime, the company is working with workstation vendors to get the ioFX insert cards certified. My guess is there will be more than a few visual artists who won’t bother to wait.

Fusion-io shares are up almost 11 percent — or $2.64 — to $27.30, as of 11 am ET; not so much on this news — workstations are kind of a low-volume market — but on an analyst report from Piper Jaffray suggesting that Cisco Systems may be close to a deal to add Fusion-io’s flash technology to its Unified Computing System platform.

The report goes on to suggest that Cisco could, over the next three or four quarters, become one of Fusion’s bigger customers, along with Facebook and Apple, and could account for more than 10 percent of Fusion’s business — which could, in turn, lead to a doubling of revenue this year. For the record, sales were $197.2 million in Fusion’s fiscal 2011. Do the math.

]]> http://allthingsd.com/20120412/fusion-io-brings-flash-madness-to-workstations-and-movies-like-hugo/feed/ 0 http://allthingsd.com/20120411/ibms-latest-hardware-aims-to-make-less-work-for-it-shops/ http://allthingsd.com/20120411/ibms-latest-hardware-aims-to-make-less-work-for-it-shops/#comments Wed, 11 Apr 2012 18:50:58 +0000 Arik Hesseldahl http://allthingsd.com/?p=195298 I don’t know if the following stat will surprise you as much as it did me, but here goes. When a company buys a server, it obviously incurs much more than just the cost of the hardware. There are a lot of labor costs associated with getting that server up and running, installing all the applications and tuning it to optimum efficiency. Then there’s ongoing maintenance: Software updates and the like.

Obviously, that’s not the part that surprises me. But here is the bit that did: When you add up all those expenses over a server’s lifetime, labor costs amount to about 70 percent of the total, according to IBM. If you had asked me, I would have guessed the cost of power would outweigh the cost of ongoing labor. Silly me.

I talked with IBM’s Steve Mills about this earlier this week. He’s Big Blue’s senior vice president and group executive for Software and Systems. It’s not uncommon, he says, for a company to take weeks or even a month between a server’s arrival and its deployment.

IBM today announced a hardware system it calls PureSystems that can cut that deployment time to hours and reduce the lifetime labor cost associated with the server by about one-third.

Basically what IBM is doing here is bringing to bear its expertise in services. Having done so well running IT services for a few thousand different companies, it has learned a thing or two about efficiency.

And it makes perfect sense when you consider that much of IBM’s $107 billion in revenue is derived from its services business. Now it’s taking some of that learning and applying it to its hardware and software business, which accounts for about 40 percent of sales.

The key feature, Mills told me, is something called the Flex Systems Manager, which is some IBM-made software that automates a lot of the set-up and maintenance work that traditionally has to be done more or less manually by one or a team of IT managers. “The purpose of the code is to do discovery. … Can I locate every piece of hardware in the frame? What are the rules for configuring it? Can I locate all the software I need and what are the rules for configuring that?” Mills told me.

All that data has been gathered into a single screen that makes the relevant information available at a glance. Mills says the system can be up and running within four hours of arriving at a company’s loading dock. That’s a bold claim.

It’s all based around patterns that IBM has seen over and over again for different types of deployments and configuration options. See them often enough and you can develop software scripts that take a great deal of the manual labor out of the process.

Sometimes companies have their own unique or wonky business processes that even someone as experienced as IBM hasn’t seen before. If that’s the case, a company can craft its own pattern and translate that into software that can automate a process that’s unique to its business or internal rules.

IBM has also teamed up with 125 independent software vendors or ISVs to develop their own patterns that clients can quickly download in order to get up and running. (IBM put out a video on that, which I’ve taken the liberty of embedding below.)

It’s also pretty diverse from a computing standpoint. IBM being IBM, the system has different hardware options, including processors from Intel or its own Power line of chips. There are also three OS options: Windows, Linux and AIX, IBM’s proprietary flavor of Unix. There’s also a wide choice of virtual machine managers: VMWare, KVM, Microsoft’s HyperV and IBM’s own PowerVM.

In the end, the point is to allow a company’s employees to spend more time working on their key lines of business and less time making the computers run properly, which is at its most basic level the IT shop’s highest mission.

]]> http://allthingsd.com/20120411/ibms-latest-hardware-aims-to-make-less-work-for-it-shops/feed/ 0 http://allthingsd.com/20120405/it-spending-this-year-almost-four-triiilllion-dollars/ http://allthingsd.com/20120405/it-spending-this-year-almost-four-triiilllion-dollars/#comments Thu, 05 Apr 2012 15:40:18 +0000 Arik Hesseldahl http://allthingsd.com/?p=193546 The growth rate in global spending on information technology is slowing down a bit, but, well, it’s still growing, and will total $3.7 trillion, according to the latest forecast on the topic by the tech research house Gartner.

It’s not so much about any shifts in sentiment or intention for spending among large companies, it’s just that the dollar is currently strong against other currencies, so U.S.-domiciled companies are in a weaker position when selling to customers in other countries. When accounting for that discrepancy, Gartner says it expects overall growth in spending of 2.5 percent, but on a constant currency basis, the digits would be transposed for a healthier 5.2 percent.

Spending by governments will likely contract, thanks in no small part to the austerity measures being put in place in the euro zone.

The highest rate of growth will be in the telecommunications equipment sector, which will grow by nearly 7 percent, Gartner says. A lot of that is thanks to mobile going to mobile, but also to speeding up networks. See the rest of the segments and their expected rates of growth in the table I screengrabbed from the press release, below:

Earlier this week, Gartner singled out IT spending in emerging economies, which it said will amount to an impressive trillion and change by itself. And last week we got a glance at the sentiment from 100 CIOs at large enterprises, courtesy of J.P. Morgan, indicating that growth is likely to tick upward this year. Up is good.

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