Google cloud dives deeper into the data dreamland

Google’s cloud business unit has announced the acquisition of data analytics firm Looker for $2.6 billion, further expanding products available in the ever-growing world of cloud.

While another acquisition at Google is nothing out of the ordinary, this happens to be the first under the tenure of Thomas Kurian, the newest CEO of the cloud business. Kurian took the reigns from Diane Greene at the beginning of this year, after Greene failed to deliver on the hype which surrounded her appointment.

“A fundamental requirement for organizations wanting to transform themselves digitally is the need to store, manage, and analyse large quantities of data from a variety of sources,” said Kurian in a blog announcement. “Google Cloud offers customers a broad and integrated suite of cloud services to ingest data in real time, cleanse it, process it, aggregate it in a highly scalable data warehouse and analyse it.

“Looker extends our business analytics offering with two important capabilities—first, the ability to define business metrics once in a consistent way across data sources. This makes it easy for anyone to query data while maintaining consistent definitions in their calculations, ensuring teams get accurate results.

“Second, Looker also provides users with a powerful analytics platform that delivers applications for business intelligence and use-case specific solutions such as Sales Analytics, as well as a flexible, embedded analytics product to collaborate on business decisions.”

With Looker being integrated into the Google proposition, the cloud team will have something more interesting to talk about. Kurian has discussed a more complete analytics solution, including visualisation of results and integration into daily workflows, as well as the ability to make more customisable solutions for the verticals.

Another interesting benefit of this acquisition is building Google’s ability to work in a multi-cloud landscape. Although any cloud company will want to pigeon hole enterprises into their own products, bleeding customers is of course more profitable, it is not realistic in today’s world. If you do not have a proposition which is interoperable with other cloud providers, you are not going to be attractive to customers.

There are numerous examples of this being an important factor of the cloud world of tomorrow. The Data Transfer Project is an initiative to build a common framework with open-source code that can connect any two online service providers, while Vodafone Business and IBM came together to create a joint-venture aiming to solve the problem presented by multi-cloud interoperability.

As part this acquisition, Google is also inheriting the ability to play in this world, bumping its ability to bring together data from SaaS applications like Salesforce, Marketo, and Zendesk, as well as traditional data sources.

Google Cloud has seemingly been losing out to the likes of Microsoft Azure and AWS in recent years, a factor which reportedly contributed to Greene’s downfall. This is not to say the cloud business is not successful, but it is not tearing up trees at the same rate as the two market leaders.

Perhaps this is only one of the first announcements we should expect from Kurian over the next couple of months. This is a man who needs to make his mark on the business, but also close the gap Microsoft and Amazon have created at the top of the cloud rankings.

Amazon rumoured to be rummaging around Boost

Amazon is rumoured to be one of the parties interested in purchasing Sprint’s prepaid Boost, and while it might be a long-shot, all rumours eventually seem lead back to Amazon at some point.

According to Reuters, two individuals have suggested Amazon is in the market to purchase the prepaid brand, a casualty of concessions put in front of the telco if it is to realise its merger ambitions with T-Mobile US. While any divestment in Boost is only a potential outcome for the moment, if Sprint and T-Mobile US want to get the merger greenlight from the FCC, ditching one of the prepaid brands would be one of the three conditions.

Of course, what is worth noting is that Amazon is not the only interested party. Boost founder Peter Adderton has also shown interest in buying back the company he sold to Sprint in 2006. Funnily enough, Adderton has been one of the critics of the merger, though his tune seems to have changed since the opportunity to get a deal on Boost emerged…

This is nothing but speculation for the moment. Any divestment in Boost would depend on the merger between Sprint and T-Mobile US being approved, an outcome which is far from guaranteed considering alleged objections from the Department of Justice on the grounds of competition.

That said, a yes is a distinct (but fleeting…) possibility. And Amazon would of course be in the picture.

If Amazon is good at anything, it is a master at selling the brand and draining customer’s wallets for an extra couple of quid each month. Connectivity is an interesting prospect for Amazon, as while some might question why it would want to get involved in such a messy and decreasingly profitable industry, but there is an opportunity to create innovative products through bundling.

According to Ovum’s lead analyst for fixed and mobile Dario Talmesio, this could be an option for disruption. For the core eCommerce business, Amazon offers a premium delivery service for physical goods. For its digital assets, such as the content offering, why couldn’t it do the same? Connectivity is the delivery function of online services, so it is a similar concept.

The big idea here is adding value. Amazon might not necessarily make a significant profit from connectivity, but connectivity as a value add could have a compounding effect on the digital content business.

“Amazon is known for regularly screening the horizon for all kind of opportunities,” said Talmesio. “When it comes to MVNO-like connectivity, Kindle was in industry-first example of providing free (data) delivery, which was included in the cost of the subscription or purchase of the electronic books being downloaded. There is a reason why there should not be looking at replicating the same business to other services.

“Connectivity is a mean to an end: if you want to provide a frictionless retail shopping experience, for instance, why not include connectivity as part of Amazon Prime or Prime video or, in B2B why adding it to AWS services.

“The boundaries between connectivity and cloud are blurring, and the timing could be right for Amazon to redesign the connectivity business the same way they redesigned logistics, retail, and public cloud businesses.  Amazon is all about introducing excellence in processes that need to be turned into customer-first and digital first, adding connectivity to their existing plans makes sense, as long as it also makes financial sense.”

A new approach to telecommunications and connectivity is perhaps something which the industry, or more accurately, customers are craving.

Some might consider the telcos are in a slightly precarious position. For years, customers service and experience has been considered an afterthought, and it shows. This has the potential to create a scenario where the retail business of the telcos can be disrupted by those who take a more attentive approach to customer service.

A recent survey from Matrixx suggests 85% of UK and US consumers would consider switching to an Amazon mobile connectivity contract if the option was available. 64% also said they would switch providers to get a similar experience to their favourite apps. The internet giants might not be set up to manage infrastructure, but there may well be interest for alternative brands to manage the customer relationship.

Over in the US, Google Fi is looking like it could be a success as an MVNO, though it is still early days, while in the UK, Giffgaff is gaining traction month on month. Both of these brands demonstrate that an attentive approach to customer service and delivering an innovative service to customers will gain interest from bewildered and frustrated consumers.

Of course, what is worth noting is that this is not the first time Amazon rumours have focused on the connectivity world. Back in 2012, Amazon launched an MVNO service in Japan. In 2014, it launched the Amazon Fire Mobile, though this was pretty much a disaster. In 2015, there were rumours of a US MVNO service. Earlier this year, it was revealed Amazon had partnered with low-orbit nanosatellites firm Kuiper Systems. And of course, customers can buy embedded connectivity with Kindle products.

This is nothing but market speculation for the moment, and while it would surprise a few to see Amazon connected with connectivity, there is a nice fit with other aspects of the business.

Vivendi media mission continues rolling through Europe

Vivendi-subsidiary Canal Plus has announced the €1 billion acquisition of pay-TV operator M7, expanding the business into seven new European markets.

The deal, which is still subject to approval from the European Commission, will take Vivendi across the borders of the Netherlands, Belgium, Austria, Czech Republic, Slovakia, Hungary and Romania. M7’s subscriptions currently total more than three million across its European footprint and revenues of just over €400 million.

“We are particularly pleased with this acquisition project made possible by Vivendi. The operation would allow Canal Plus Group to approach 20 million subscribers worldwide,” said Maxime Saada, Chairman Canal Plus’ Board of Directors.

“Our global subscriber base will have almost doubled in five years, with a clear acceleration starting in 2015. This major operation will allow us to strengthen our distribution capacity in order to leverage content originating from our library and our numerous production operations in Europe.”

The Vivendi media mission is not a secret in the industry. Acquisitions have been somewhat of a guilty pleasure for the business, and this move is intended to further increase the influence of Canal Plus over the European continent, and worldwide. With M7 in the armoury, Canal Plus will have 20 million subscribers worldwide, including 12 million in Europe.

M7 is currently an aggregator of various local and international content, though the acquisition would create additional avenues for Canal Plus to distribute its own content. Canal Plus claims it currently spends €3 billion a year creating content, putting it in the same league as Netflix when you factor in the scale of the subscription bases (Netflix spent $8 billion in 2018 with a subscriber base of roughly 140 million).

T-Mobile and Sprint ponder concessions to force through merger

T-Mobile US and Sprint are weighing up the sale of one of the pair’s prepaid brands in an attempt to woo decision makers into greenlighting the divisive merger.

Dating back to April 2018, you will be forgiven for forgetting this saga is still an-going debate in the US. With privacy scandals, the Huawei drama and BT’s dreadful logo stealing all the column inches, the debate over whether T-Mobile US and Sprint should be allowed to merge their operations has been relegated below the fold. But it is still a thing.

The countdown clock, the 180 days the FCC gives itself to approve mergers, spent a lot of time on pause, though the longer the process takes the more likely it appears the answer will be no. If the relevant authorities were looking at the information in front of them, an answer would surely have been given by now, but sceptics might assume the FCC is desperately searching for a reason to say no.

According to Bloomberg, the duo is prepared to make concessions to force through the deal. These concessions include the sale of one prepaid brand, a pledge to finish the rollout of a 5G network in three years and promises not to raise prices during this deployment.

In terms of the timeline, crunch day is fast approaching. The FCC 180-day review is set to come to a close at the end of June, though the deal also has to be signed-off by the Department of Justice. With decision time on the horizon, egos will have to be stroked and arguments set in stone.

The issue at the heart of this debate is focused on competition. Critics of the deal suggest consumers who are at the low-end of the tariffs scale will effectively be punished with higher prices in a market with only three providers. T-Mobile US and Sprint have suggested prices would be kept down in an attempt to compete with AT&T and Verizon, though more than paper-thin promises will be needed.

Selling off one of the prepaid brands would help to preserve competition in this segment, offering more choice for those consumers who do wish to, or cannot afford to, invest in postpaid contracts. It is believed Sprint’s Boost brand is the one facing the chop, with the Virgin Mobile and Metro brands to remain in the potentially merged operations.

Peter Adderton, who sold Boost to Sprint in 2006, has previously stated he would invest in the divested brand. Adderton has been a critic of the T-Mobile/Sprint merger, though if there is a chance to make money entrepreneurs have a way of changing their tune.

Reports have been emerging over the last couple of weeks suggest regulators are still concerned over competition despite assurances made by executives. The Wall Street Journal suggests the deal would not go ahead with the proposed structure of the company, a claim which T-Mobile US CEO John Legere rejects, suggesting there is still some stroking to be done.

Although trying to figure out which way this deal will go is little more than guess work at the moment, there is a feeling it is not going the way T-Mobile and Sprint would want. Rumours are only rumours, but the familiarity of the reports is starting to add weight. It does sound like T-Mobile and Sprint will have to make some considerable concessions to get the greenlight.

Vodafone Germany tries to placate regulators via wholesale cable deal with Telefónica

Telefónica Deutschland will be able to sell services that run on the combined Vodafone and Unitymedia cable network in Germany, as a remedy measure taken by Vodafone to satisfy EU’s competition concern over its proposed acquisition of Liberty Global.

The two companies announced that they have entered into a definite “cable wholesale agreement” in Germany, whereby Telefónica Deutschland will offer its customers broadband services that use both the Vodafone fixed network and that of Unitymedia. The combined networks cover 23.7 million households and represent a significant upgrade to whatever Telefónica Deutschland customers are currently getting.

“The cable agreement will enable us to connect millions of additional households in Germany with high-speed internet in the future,” said Markus Haas, CEO of Telefónica Deutschland. “By adding fast cable connections, we now have access to an extensive infrastructure portfolio and can offer to even more O2 customers attractive broadband products – including internet-based TV with O2 TV – for better value for money.”

Vodafone’s plan to acquire Liberty Global in Germany (where it trades under the brand Unitymedia), the Czech Republic, Hungary, and Romania, has run into difficulty at the European Union, which raised competition concerns at the end of last year. The Commission was particularly worried that the combined business would deprive the consumers in Germany of access to high speed internet access, and the OTT services carried over it. Vodafone expressed its confidence that it would be able to satisfy the Commission’s demand. Opening its fixed internet access to its competitor is clearly one of the remedies. Also included in the remedy package Vodafone submitted to the Commission was its commitment to ensure sufficient capacity is available for OTT TV distribution.

“Our deal with Liberty Global is transformational in many ways. It is a significant step towards a Gigabit society, which will enable consumers & businesses to access the world of content & digital services at high speeds. It also creates a converged national challenger in four important European countries, bringing innovation & greater choice,” said Nick Read, CEO of Vodafone Group. “We are very pleased to announce today our cable wholesale access agreement with Telefonica DE, enabling them to bring faster broadband speeds to their customers and further enhancing infrastructure competition across Germany.”

Vodafone believed the remedial measures it put in place should sufficiently reassure the Commission that competitions will not suffer after its acquisition of Liberty Global. The company now expects the Commission to undertake market testing of the remedy package it submitted, and to give the greenlight to the acquisition deal covering the four countries by July 2019. It plans to complete the transaction by the end of July. The merger between Vodafone’s and Liberty Global’s operation in The Netherlands was approved by the EU in 2016.

Verizon continues quest to correct content car crash

The Verizon mission to conquer the content world has been anything but a smooth ride to date, and now it is reportedly searching for a buyer for Tumblr.

According to the Wall Street Journal, Verizon executives are on the search to offload the platform. The Verizon Media Group has been under considerable pressure in recent months, as the promise of value through content and diversification has eluded the telco.

Looking at the most recent earnings call, Verizon Media Group revenue was $1.8 billion, down 7.2% year-on-year for the quarter. Declines in desktop advertising were primarily blamed, with the dip continuing to more than offset growth in mobile and native advertising. Considering the effort the telco had to exert to acquire Yahoo, not to mention the headaches it had to endure, some might have hoped there would be more immediate value.

The last couple of months have seen Verizon attempt to make money from the mockery, with a particular focus on job cuts. In January, it was announced 7% of the media unit’s workforce, some 800 roles, would be sacrificed to the gods of profits, and now it seems Tumblr is being marshalled to the alter.

What is worth noting is this is a platform which has promise.

After being acquired by Yahoo during 2013 for $1.1 billion, Verizon inherited Tumblr through the much mangled $4.8 billion acquisition of Yahoo in 2017. Although some might struggle to understand what Tumblr does, the all-encompassing blogging platform currently has 465.4 million blogs and 172 billion posts.

Tumblr is a tricky one to understand what it actually does, but instead of trying to pigeon hole it into a definition perhaps the better approach would be to let it just be itself. Tumblr defines itself as a blank canvas, allowing users to post text, photos, GIFs, videos, live videos and audio, or pretty much anything the user wants to.

Perhaps this is why Verizon has struggled with the brand and presumably failing to realise the potential. Telcos generally cultivate traditional and relatively closed-minded cultures. With Tumblr just being itself, rather than fitting into a tidy tick-box exercise, Verizon may be struggling to communicate the value to customers or even devise an out-of-the-box business model to monetize it effectively.

This assessment is perhaps supported by where the media business has seen success. Financial news for example, or the delivery of sports content. These are not exactly complex business models to understand, more difficult to deliver however, as they are more functional. These are the areas CFO Matt Ellis was boasting about during the earnings call.

While there has not been any official commitment or denial to the rumours from Verizon so far, there does seem to be some appetite from the industry. According to Buzzfeed, Pornhub VP Corey Price is ‘extremely interested’ in potentially acquiring Tumblr, promising to re-discover the NSFW edge, one of the factors which drove the popularity of Tumblr during the early days.

The future of Tumblr might be a bit hazy for the moment, but one thing is clear. Verizon is mapping out a very effective usecase on how not to diversify into the content world.

Telenor completes Nordic sweep with DNA acquisition

Norwegian telco Telenor has completed its reach across the Nordics, taking the first steps to acquire Finnish operator DNA.

Telenor has now officially entered into agreements with DNA’s two largest shareholders Finda Telecoms and PHP, who hold stakes of 28.3% and 25.8% respectively. Following approval at the Finda Telecoms and PHP AGMs, and regulatory approval, a mandatory public tender offer will be triggered for the remaining outstanding shares in DNA by Telenor. The current 54% will cost Telenor €1.5 billion.

The transaction is expected to be completed in Q3 2019, with the remaining shares being purchased for the same amount, valuing the entire DNA business at roughly €2.8 billion.

“I am very pleased to announce today’s transaction and our entry into Finland, the fastest growing mobile market in Europe,” said Telenor Group CEO Sigve Brekke.

“DNA is an exciting addition to Telenor Group, and a natural complement to our existing operations in the Nordic region. Not only are we strengthening our footprint in the Nordic region, we are also gaining a solid position across fixed and mobile in the Finnish market and making room for further value creation.”

DNA has been crafting itself a useful position in the Finnish market, with both fixed and mobile offerings. Having been founded in 2000, and restructured through various mergers in 2007, DNA has grown to become Finland’s third largest telco with a mobile market share of 28%. With Finland proving to be one of the fastest growing markets in Europe, this could be a useful acquisition from Telenor.

Having grown its mobile service revenues by at least 9.3% year-on-year for the last three years, Telenor expects to use its own expertise to grow revenues further through a larger product portfolio, though the enterprise market is also a target. On the business side of things, Telenor’s international footprint will certainly help, with operations across the Nordics.

The transaction will also offer Telenor more ammunition as it battles its Nordic competitor Telia,

Although Telenor still does have assets across various Asian markets, Pakistan and Thailand for example, it has been narrowing its focus on the Nordic markets recently. Exiting from India, although this was partly forced due to the success of Reliance Jio, while offloading its Eastern European business units will give the team more resources to dominate the Nordic region, though it will have to deal with Telia.

Should the transaction be approved by all the relevant parties, Telenor will have a presence in all the Nordic markets, pinning it head to head with long-time rival Telia. Aside from the Swedish market where Telia dominates, the pair are largely on level pegging, though the DNA business will add momentum.

Alongside considerable growth over the last three years, Finnish consumers have the biggest data appetites across the bloc. According to data from the OECD, the average Finnish mobile data subscription is a massive 15 GB per month which dwarfs the likes of the UK and France, where the average contract is 2.6 and 3.6 GB per month.

$3.4 billion Inmarsat acquisition hype turns out to be true

British satellite communications company Inmarsat has been the centre of numerous acquisition stories in recent years, and this one is actually progressing.

Last week, the Inmarsat board released a statement confirming it was in preliminary discussions regarding a takeover, and today it has confirmed an offer is on the table. Not only will this put $3.4 billion into the pockets of the shareholders, it will also take the firm back into private equity, protecting it from the roller-coaster ride which has been the satellite segment over the last few years.

“As experienced and long-term investors in telecommunications, the Consortium values and admires Inmarsat for its proven expertise in maritime, aviation, defence and broadband satellite communications, alongside its strong market positions and potential for growth,” a statement from the consortium reads.

“Our planned ownership will enable this innovative British company to fulfil its ambitions to become a global leader in next-generation satellite communications, including the fast-growing market for commercial aviation in-flight connectivity.”

Another important factor from the statement is that the Inmarsat headquarters will remain in London. This might have been a bit of an issue for any protectionist politicians which would have viewed Inmarsat as strategic national asset, but the consortium seems to be getting ahead of the game. Should the firm gain regulatory approval, the deal is expected to be completed in Q4 this year.

The consortium, named Triton Bidco, believes there is much growth to be realised in the satellite segment, though a “strategic management and a long investment horizon” is required. In short, if you want to see the profits, shareholder pressures need to be removed from the equation. The firms traditional markets, maritime and government, are becoming increasingly competitive, but with its global infrastructure and early entry into the in-flight connectivity market the consortium has clearly spotted some riches on the horizon.

With a price of $7.21 in cash per share (a 7% premium), as well as the support of the Board of Directors and its largest shareholder Lansdowne Partners, Inmarsat might be heading towards the consortium. Shareholders have been frustrated over recent months with weak earnings results and may well look to exit with some spending money. For Inmarsat, the deal will create some much-needed breathing room to explore the long-term role of satellite in tomorrow’s world of connectivity.

Inmarsat once again in the acquisition crosshairs

Acquisition rumours are once again swirling around British satellite company Inmarsat, this time to take the company back to private equity control for £3.3 billion.

The consortium, featuring Apax, Canada Pension Plan Investment Board, Ontario Teachers’ Pension Plan Board and Warburg Pincu, comes at a time where the firm has been facing investor pressures. Over the last six months, poor performance from Inmarsat share price decline by 26%, while acquisition rumours have caused this trend to reverse recently. Share price is still down, but there does seem to be appetite in the market for an acquisition.

On January 31, Inmarsat received a non-binding proposal from the consortium offering $7.21 per share for the entire issued, and to be issued, share capital of the firm. The offer values the business at $3.3 billion, roughly £2.5 billion. This is not a concrete offer, but it is seemingly enough to get the market excited.

Although Inmarsat has reported flat sales growth in its core business units, maritime and government connectivity contracts, there has been increased demand in the aerospace industry, as more airlines demands connectivity, while 5G is on the horizon. The failure to deliver material progress on the promises does seem to be frustrating investors, but there is potential.

While satellite connectivity has been snubbed in recent years, usecases which demand ubiquitous connectivity in the future imply satellite has a broader role to play outside of the developing nations. Due to the civil engineering difficulties, and sometimes commercial constraints of connectivity, satellite is increasingly becoming a critical component of the connectivity mesh.

Interestingly enough, Apax might be a familiar sounding name to Inmarsat lifers. Apax was part of a consortium which bought the satellite firm in 2003, before taking it public two years later.

For some, this might be good news, but what is worth noting is this deal will be placed under scrutiny from the UK Government, which will view Inmarsat as a national strategic asset, and other attempts have failed. EchoStar attempted to acquire the business last year, investors rejected an offer worth £3.2 billion, while Eutelsat was also rumoured to be considering a bid.

Nvidia wins the Mellanox courtship for $6.9 billion to boost datacenter offering

InfiniBand and ethernet technology company Mellanox has been attracting attention from a range of different suitors over the last few months, but Nvidia has won the prize.

Nvidia and Mellanox have officially announced the pair have reached a definitive agreement under which will see the GPU giant sign a cheque for approximately $6.9 billion, or $125 per share. After Microsoft, Intel and Xilinx were reported courting Mellanox, Nvidia comes home with the goods.

“The emergence of AI and data science, as well as billions of simultaneous computer users, is fuelling skyrocketing demand on the world’s datacenters,” said Jensen Huang, CEO of Nvidia. “Addressing this demand will require holistic architectures that connect vast numbers of fast computing nodes over intelligent networking fabrics to form a giant datacenter-scale compute engine.

“We share the same vision for accelerated computing as Nvidia,” said Eyal Waldman, CEO of Mellanox. “Combining our two companies comes as a natural extension of our longstanding partnership and is a great fit given our common performance-driven cultures. This combination will foster the creation of powerful technology and fantastic opportunities for our people.”

The acquisition announcement arrives at a useful time for Nvidia, a company which is seeking to expand outside its traditional markets. The GPU giant has been heavily reliant on the gaming and cryptocurrency segments in by-gone years, though dampening demands hit the financials last year. That said, the growing datacenter business has offset some of the negative trends.

Looking at the most recent financials, datacenter sales at Nvidia accounted for 31% of the total during the last period, up from 19% in the previous year. Adding Mellanox into the mix will further diversify the business, cementing the pursuit of alternative revenues. The pair claim Nvidia computing platform and Mellanox’s interconnects power over 250 of the world’s TOP500 supercomputers.

Another interesting facet to this story is the influence of activist investor Starboard Value.

Having taken a 10.7% stake in Mellanox in November 2017, the team moved to have the entire board replaced in an attempt to refocus the activities of the business. Starboard Value believed the business was focusing too much time on R&D, missing out on commercial opportunities.

Although this could be seen as a nightmare scenario for technologists, quarterlies did improve and share price has increased by 118% since the Starboard Value entry. Say what you will about the disruptive influence of activist investors, but this is an outcome few investors will complain about.