Verizon is 14th vendor to pull out of show over health concerns due to COVID-19
The concerns over the rapidly spreading novel coronavirus that cause the cancellation of the Mobile World Congress (MWC) 2020 show in Barcelona is impacting the RSA Conference 2020 as it gets underway this week in San Francisco.
The Lowdown: Verizon Communications late last week became the 14th company to pull out of the major cybersecurity event, joining the likes of IBM and AT&T Cybersecurity. About 40,000 attendees are scheduled to attend the annual event – which begins Monday – though as of Feb. 20, about 1.2% of expected attendees have canceled their registrations.
The Details: According to RSA organizers, six exhibitors from China – of the nine that registered to exhibit at the show – have pulled out and seven from the United States have done the same. Another company from Canada also has pulled out. The organizations are concerned about the health of their employees, opting to not have them congregate at crowded tech shows at a time when the number of cases and related deaths continues to spread, with some health professionals worried about a global pandemic.
As of this weekend, there were 79,930 cases of the people infected with the virus and a reported 2,465 deaths. China has been the hardest hit, though the number of cases in places like Italy and Iran are rising quickly and the United States has confirmed 34 cases. The Centers for Disease Control (CDC) has widened its travel advisories to include Japan and Hong Kong.
The concerns about the virus continue to have a widening ripple effect through the tech industry as the conference season gets underway. Along with MWC, which was scheduled to start this week with more than 100,000 attendees expected, Facebook canceled its Global Marketing Summit scheduled for March 9-12 in San Francisco. Facebook also said it will not attend the Game Developers Conference, also in San Francisco starting March 16.
Shows like Black Hat Asia and EmTech Asia have been postponed and Salesforce’s World Tour Sydney, set for March 4, which had been an in-person event will now be conducted only online.
The Impact: COVID-19 first appeared in December in the Chinese city of Wuhan and has since spread into most regions in the world. Governments are trying to stall the spread outside of China even as the number of new cases in that country may have started dropping. The virus is spread through human contact and as concerns grow about the dangers of gathering in places with large numbers of people from different parts of the world, upcoming tech events will likely continue to be impacted by cancellations of both exhibiting vendors and attendees.
The Buzz: “As media focuses on COVID-19 (Novel Coronavirus) throughout the world, we want to assure you that San Francisco is open for business and events are proceeding as planned,” San Francisco Mayor London Breed wrote in an open letter Feb. 20. “San Francisco is working closely with global, federal and state health agencies to monitor the virus in order to protect residents, businesses, and visitors. Risk of being infected with COVID-19 in San Francisco is low, as the virus is not circulating in our community.”
“In addition to following CDC recommendations like frequent hand washing, RSA Conference reminds attendees that other preventive measures have been put in place to help reduce the risk of infection,” RSA organizers wrote in a statement. “The Moscone Center is following recommendations in the US EPA’s Emerging Pathogen Policy regarding the use of cleaning disinfectants effective against the coronavirus and CDC health screenings for qualified travelers arriving from international destinations at the San Francisco International Airport.”
Effort is designed to force Xerox and other potential buyers to negotiate with board
HP has adopted a shareholder rights plan, the latest step in its efforts to push back against rival printer maker Xerox’s unsolicited $35 billion takeover bid.
The Lowdown: The giant PC and printer maker also this week declared a dividend distribution initiative to slow down Xerox’s aggressive efforts, including plans to issue a tender offer to acquire all outstanding share of HP common stock.
The Details: The shareholder rights plan doesn’t prevent Xerox or any other company from trying to acquire HP but is designed to convince any potential buyers to negotiate with the HP board before trying other methods to gain shares.
Shareholder protections in the plan include:
>Guards against coercive tactics: HP investors should be paid an appropriate premium for their shares rather than be pressured by potential buyers looking to gain control.
>One-year expiration date: The HP board could terminate the rights plan even earlier depending on circumstances.
>Investment protection: Ensures shareholders will get long-term value from the shares of HP they’ve bought.
Shareholders will be able to exercise these rights only if a person or group acquires 20% or more of HP’s common stock. Each right will entitle shareholders to buy one one-hundredths of a share of new series stock for $100. If someone gains 20% of common stock, each right will enable its holder – other than those in the group with 20% of the stock – to buy HP common shares for $100.
The dividend distribution of one preferred share purchase right on each outstanding share of HP common stock will be made March 2.
The Impact: Shareholders will get more information from HP Feb. 24, when the company plans to outline its multi-year strategic and financial plan. The company also will give shareholders access to HP’s full earnings and balance sheets before responding to Xerox’s efforts to buy outstanding shares.
Background: Xerox has been making a strong pitch directly to HP shareholders, including meeting with several of the larger ones. The takeover bid also has the support of activist investor Carl Icahn, who owns a 4.2% stake in HP and a 10.9% stake in Xerox. According to a report by Bloomberg, Icahn late last year also suggested to HP CEO Enrique Lores that HP buy Xerox.
Xerox is pushing for the deal despite HP being four times its size, arguing that a combined company will be a significant competitor in a changing printer market and could save $2 billion annually. HP officials have argued that Xerox is undervaluing the company and that they are satisfied with their plans going forward.
The Buzz: “HP’s board is focused on creating long-term value for HP shareholders. We believe it is essential that HP shareholders have sufficient time and full information when considering any tender offer that Xerox may commence,” HP Board Chairman Chip Bergh said. “As we have previously said, we are very concerned about Xerox’s aggressive and rushed tactics, and any process that is not based on full information is a threat to our shareholders.”
Gary Wojtaszek’s departure comes after data center services firm reports disappointing quarterly numbers
The president and CEO of CyrusOne is leaving the data center services company, refueling speculation that the Dallas-based firm may be sold.
The Lowdown: The resignation of Gary Wojtaszek and the appointment of CyrusOne veteran Tesh Durvasula to fill the position on an interim basis this week was announced the day after the company announced its quarterly earnings, which included a loss of $52.1 million and a 15% revenue jump, to $253.9 million.
The Details: Wojtaszek, whose resignation was by mutual agreement with the board of directors, will stay on to help with the transition as the board starts searching for a permanent successor. Durvasula, who has been with CyrusOne since 2012 first as chief commercial officer and most recently as president of its European operations, will be among the candidates considered for the permanent post.
CyrusOne last fall began working with Morgan Stanley to explore its options, which includes being sold. There has been reported interest in the company from the likes of rival Digital Realty Trust as well as investment firms EQT Partners and Digital Colony Partners, though no offer has materialized.
The company has a reported market cap of $7.4 billion, operating 48 data centers in North and South America, Asia, and Europe for about 1,000 customers.
The Impact: The rising trends of cloud computing services and outsourcing has driven a rise in the number of data center-oriented deals over the past five years as enterprises turn to service providers to run their infrastructures, according to Synergy Research Group, which has tracked 348 such deals during that time totaling $75 billion. Digital Realty and Equinix have been the most aggressive buyers, though CyrusOne also was named – along with others like Iron Mountain, NTT, and Digital Bridge/DataBank – by Synergy as “serial acquirers.”
In 2019, there were more than 100 such deals, up 6% from the year before and more than double the number of closed deals in 2016.
The Buzz: “Under Gary’s leadership, the company has grown to nearly $1 billion in revenue, expanded into Europe, Asia and Latin America, achieved an investment grade credit rating, and had a stock price that outperformed its public data center peers, as well as both the RMZ and S&P 500 indexes, since the Company’s IPO in January 2013,” said Alex Shumate, chairman of the CyrusOne board. “Tesh is an industry veteran with over 20 years of experience in fiber optics, interconnection and data centers. During his more than seven years at CyrusOne, including serving as chief commercial officer and his most recent role as president of Europe, Tesh has demonstrated that he is a strong and dynamic leader who is customer focused and knows our business well. He has worked closely with our teams across the company to execute our strategy and deliver results.”
“I know that I speak for everyone at CyrusOne in thanking Gary for his strong leadership and vision. Over the years, Gary has helped create a strong company culture at CyrusOne focused on excellent customer service and delivering shareholder value, which will remain unchanged,” Durvasula said.
“It has been a tremendous journey and privilege to serve as the CEO and a board member of CyrusOne since its IPO and spin-off from Cincinnati Bell,” Wojtaszek said. “From helping take the company public to expanding overseas and emerging as one of the top data center companies in the world, I am incredibly proud of what we have accomplished and the culture we have created.”
Cybersecurity company sees its valuation jump to $1.1 billion
Cybersecurity vendor SentinelOne is continuing its rapid growth, announcing this week that it brought in $200 million in its latest round of funding and raised its valuation to $1.1 billion.
The Lowdown: The Series E founding comes eight months after the Mountain View, California-based company raised $120 million. SentinelOne has now raised $430 million since launching in 2013.
The Details: The latest round of funding was led by venture capital and private equity firm Insight Partners and included Tiger Global Management, Qualcomm Ventures, Vista Public Strategies, Third Point Ventures, and previous investors.
The fundraising and rapid business growth reportedly has SentinelOne officials talking about taking the company public in the next few years, with co-founder and CEO Tomer Weingarten telling TechCrunch that an IPO could come in the next year or two.
SentinelOne is working to expand beyond its cloud-native endpoint protection roots, growing its artificial intelligence (AI)-based Singularity platform to endpoint detection and response (EDR) with ActiveEDR, the Internet of Things (IoT) with Ranger, and protection of containers and cloud-native workloads. The platform helps customers monitor and protect everything from devices and systems connected to the network as well as applications.
Background: SentinelOne says its now has more than 3,500 customers, including three in the Fortune 10 and hundreds in the Global 2,000. The company has seen a 134% year-to-year jump in customer retention, a 113% increase in new logo bookings, and a 150% growth in transactions of more than $2 million. Revenues have increased 104%.
Endpoint protection continues to be an important part of an enterprise’s security posture. Statista is predicting the global market will grow from $8.28 billion this year to more than $13.3 billion in 2023.
The Buzz: “The cybersecurity demands of today’s enterprises have evolved, and we’ve taken endpoint protection far beyond what it once was. Instead of solely protecting laptops, desktops, and servers with EPP and EDR capabilities, we protect the entire network edge with flexible, autonomous technology — from containerized workloads in the cloud and data center to IoT devices,” Weingarten said. “Leveraging AI to process enormous amounts of data in real time allows our customers to stay secure from all vectors of attack. Delivering value to customers well beyond the traditional endpoint is what positions SentinelOne as the fastest growing and most promising cybersecurity platform.”
Cloud backup vendor says remote monitoring tools can give bad actors access to clients’ applications and data
Cloud backup and recovery software maker Asigra is warning its network of MSPs of the growing threat ransomware poses to remote monitoring and management (RMM) platforms that are used by service providers and their customers.
The Lowdown: RMM solutions enable MSPs to remotely manage and monitoring their clients’ systems, devices, and networks, giving cyber-criminals that compromise these platforms access to end users’ applications and data, Asigra told MSPs this week.
The Details: Asigra officials said MSPs need to be aware of the threat to RMM offerings, which requires that an agent be installed on everything from enterprises’ servers, workstations, and PCs to hypervisors, networking systems, and mobile devices. When managed services providers use RMM platforms with integrated backup solutions, it creates a single point of access to multiple customers, opening up the opportunity for bad actors to send out its ransomware code to each client and hampering backups.
This capability makes MSPs an attractive target for cybercriminals, the company said.
Asigra outlined three steps MSPs can take to protect RMM platforms from such threats:
>Train employees: Make them aware of targeted phishing attacks, which is how most ransomware gets into the network.
>Separate data protection, RMM solutions: MSPs also should stay away from integrated solutions, all of which will make it more challenging for attackers to launch their ransomware attacks.
>Choose the right backup solutions: Some backup offerings make it impossible for ransomware or any malware to delete the backup. In addition, opt for backup software that prevents ransomware infection by scanning both backup and recovery streams.
The Impact: MSPs, with their growing lists of customers and deep access into their IT environments, are becoming attractive targets of cybercriminals. The FBI and Department of Homeland Security two years ago warned MSPs and cloud services providers that bad actors wanted to exploit them to get to their customers and others – including Continuum and MSPAlliance – also have put out warning signals. Vendors like Barracuda Networks and Axcient also are rolling out anti-malware tools aimed at MSPs.
The Buzz: “Once RMM administrative privileges are compromised by a criminal hacker using tried, true, and very effective methodologies such as phishing, website hijacking or malicious advertising,” said Marc Staimer, principal analyst for DragonSlayer Consulting. “The criminal party identifies the MSP employee targets and begins to attack.”
“In many technology segments, the centralization of computing processes provides great value. However, tight integration of RMM and data protection is an area where extreme caution is warranted when it comes to backup/recovery design,” said Eran Farajun, executive vice president at Asigra. “The density of high value data in many RMM environments is too alluring for criminal hackers to avoid, making it incumbent upon the MSP to architect a bulletproof data recovery model. For the strongest protection, services professionals are advised to disentangle RMM and backup to ensure system recoverability.”
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Revenue in the current quarter will fall short of company’s guidance
The ripple effect of the deadly coronavirus outbreak in China is beginning to impact the bottom line of tech companies as Apple has warned that revenue this quarter will not meet the guidance the device maker issued in January due to an expected shortage of iPhones.
The Lowdown: The virus, officially known as COVID-19, already is disrupting global supply chains in the tech industry and led to the cancellation of the Mobile World Congress (MWC) 2020 show in Barcelona, which had been scheduled for later this month, and other shows.
The Details: In a note to investors Monday, Apple officials said that while work throughout China is starting to ramp up, the pace is slower than expected, leading the company to say that it won’t meet the guidance for the current quarter it released in January, when it forecasted revenue of $63 billion to $67 billion. Apple officials did not release new guidance.
They attributed the problems to two primary factors:
>iPhone supply shortage: The manufacturing sites in China are outside of the Hubei province, the epicenter of the outbreak. All have reopened, but operations are ramping less quickly than expected. The temporary supply shortages will impact global revenues.
>Falling demand for products in China: All of Apple’s stores in China have been closed, as have many partner stores. Those that have remained open have done so with reduced operating hours and customer traffic has been low. Apple’s retail stores in the country are reopening gradually. Its corporate offices and contact centers in China have remained open, along with the company’s online stores.
The Impact: The reduced iPhone supply comes after a quarter that saw iPhone sales rebound. Apple generated record revenue of $91.8 billion in the last three quarters of 2019, a 9% year-over-year increase, due in large part of high demand for iPhone 11 and iPhone 11 Pro smartphones. iPhone sales during the quarter hit $56 billion, an 8% increase, after sales of the smartphones had dropped in the previous four quarters.
Apple officials said that outside of China, customer demand for iPhones and other products and services have been strong and in line with expectations.
Background: MWC wasn’t the only tech-related event impacted by concerns over the coronavirus. Network security vendor Fortintet canceled its Accelerate 2020 user conference scheduled for this week in Barcelona and Facebook did the same with a global marketing conference set for March in San Francisco. The giant RSA 2020 security show this month in San Francisco also is feeling an impact, with IBM withdrawing from the show, citing concerns about COVID-19.
The number of confirmed cases worldwide has reach more than 73,300, with the number of deaths hitting 1,873.
The Buzz: “The situation is evolving, and we will provide more information during our next earnings call in April,” Apple officials said in the statement. “Apple is fundamentally strong, and this disruption to our business is only temporary. Our first priority — now and always — is the health and safety of our employees, supply chain partners, customers and the communities in which we operate. Our profound gratitude is with those on the front lines of confronting this public health emergency.”
CNBC reports the company is eliminating fewer than 50 positions despite financial gains in 2019
Google Cloud reportedly is eliminating a handful of jobs as part of an internal organizational restructuring at the world’s third-largest public cloud services provider.
The Lowdown: The restructuring, first reported by the Wall Street Journal and CNBC, comes after parent company Alphabet for the first time broke out the financial numbers for its cloud business, showing that 2019, it generated more than $8.9 billion in revenue and hit an annual run rate of more than $10 billion.
The Details: Google Cloud officials reportedly declined to say how many jobs were being cut, but CNBC, citing an unnamed source, put the number fewer than 50, adding that the company was trying to find other roles within the company for those employees affected.
The news of the restructuring came the same week CEO Thomas Kurian at a Goldman Sachs event spoke about Google Cloud’s strategy going forward, which includes focusing on five specific industries – retail, healthcare, financial services, media and entertainment, and industrial and manufacturing – growing its direct sales business, and expanding its reliance on the channel, including VARs, regional and global systems integrators, MSPs, and solutions providers.
The Impact: Google Cloud continues to try to gain ground on public cloud provider leaders Amazon Web Services (AWS) – which owns almost 40% of the market – and Microsoft Azure. Kurian, a longtime Oracle executive, was brought in more than a year ago to drive Google’s growth in the cloud and has focused on such areas as expanding Google Cloud’s enterprise customer base and leveraging its capabilities in artificial intelligence (AI) and machine learning.
Background: Despite various challenges in a crowded and highly competitive market, Google Cloud is making gains. In his presentation at Goldman Sachs, Kurian noted that the business’ revenues in 2019 jumped 53% over the previous year and that during the same timeframe, the number of deals of more than $50 million doubled.
That said, the company has a way to go before it catches AWS and Azure. In the fourth quarter, Google Cloud said it generated $2.6 billion in revenue. However, AWS in the same quarter collected almost $10 billion in revenue with a run rate of $40 billion, while Microsoft put its cloud revenue at $12.5 billion, with a $50 billion annual run rate.
The Buzz: “We recently communicated organizational changes to a handful of teams that will improve how we market, partner, and engage with customers in every industry around the globe,” a company spokesperson said in an email to CNBC. “We made the difficult, but necessary decision to notify a small number of employees that their roles will be eliminated.”
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Other event organizers continue to monitor global situation with Covid-19 virus
This year’s Mobile World Congress, the massive mobile and networking tech show hosted every year in Barcelona, has been cancelled amid fears about the coronavirus and the withdrawal of more than a dozen major tech companies.
The Lowdown: The shutdown of MWC, which draws more than 100,000 attendees every year, could portend similar decisions for other events as the tech show season ramps up.
The Details: MWC organizers with GSMA for more than a week have seen the defection of such companies as Intel, Nvidia, Amazon, Cisco, Sony, LG Electronics, and AT&T that pointed to the need to ensure the health and safety of their employees and customers in the wake of the spreading outbreak of the virus. The weight of such withdrawals and the ongoing concern about the virus convinced organizers that they couldn’t go on with the event, which was to run Feb. 14-27.
In addition, airlines like British Airways, Delta, United, and American also have suspended flights to China and Hong Kong, which further complicated travel and from the event.
In a statement, GSMA CEO John Hoffman said officials in Barcelona understood the decision and that the organization and host parties in Spain will be working on MWC 2021. The conference has been hosted since 2006 in Barcelona, which stands to lose a lot of revenue that is generated every year by the show.
The Impact: Organizers of other tech shows already are talking about monitoring the situation with the flu-like coronavirus, which now is officially known as Covid-19. The RSA Conference has a site that its updates regularly about the status of the show, and as of Tuesday the event will still go on as scheduled in San Francisco Feb. 24-28. The organizers have announced a number of safety measures being taken, from adding hand sanitizer stations at the Moscone Center and increasing the number of medical personnel on site to communicating with city hotels about their cleaning protocols.
Background: The Covid-19 outbreak started in January in the Wuhan province in China and has spread to more than two dozen other countries, including the United States, where the Centers for Disease Control and Prevention (CDC) announced this week a 14th case. More 60,000 cases have been widely reported, with more than 1,300 deaths attributed to the virus. The World Health Organization (WHO) is pegging the numbers at 45,171 cases and 1,115 deaths worldwide.
The Buzz: “With due regard to the safe and healthy environment in Barcelona and the host country today, the GSMA has cancelled MWC Barcelona 2020 because the global concern regarding the coronavirus outbreak, travel concern and other circumstances, make it impossible for the GSMA to hold the event,” Hoffman said in his statement. “Our sympathies at this time are with those affected in China and all around the world.”
“Approximately 83 percent of our current registered attendees are from the United States as are 82 percent of our exhibiting organizations,” RSA organizers said in a statement. “The travel restrictions implemented by the U.S. Government on January 31, 2020 remain in effect and according to the CDC’s’s latest situation summary, the health risk from Coronavirus for the general American public is considered low at this time. RSA Conference will continue to follow the guidance of the CDC and the WHO and is in close communication with the City of San Francisco to monitor all new developments pertaining to the Coronavirus.”