IBM today announced third-quarter 2014 diluted earnings from continuing operations of $3.46 per share, compared with diluted earnings of $3.77 per share in the third-quarter of 2013, a decrease of 8 percent.
Operating (non-GAAP) diluted earnings from continuing operations were $3.68 per share compared with operating diluted earnings of $4.08 per share in the third-quarter of 2013, a decrease of 10 percent.
“We are disappointed in our performance. We saw a marked slowdown in September in client buying behavior, and our results also point to the unprecedented pace of change in our industry. While we did not produce the results we expected to achieve, we again performed well in our strategic growth areas – cloud, data and analytics, security, social and mobile – where we continue to shift our business. We will accelerate this transformation,” said Ginni Rometty, IBM chairman, president and chief executive officer.
“We are executing on a clear strategy that is moving IBM to higher value, and we’ve taken significant actions to exit nonstrategic elements of the business. This includes the announcement that we will divest semiconductor manufacturing to focus on research and development that will differentiate our systems. We will continue to make the investments and the changes necessary to manage our business for the long term. And we remain fully committed to returning significant value to shareholders through dividends and share repurchase."
Following is a topline of IBM’s 3Q earnings:
o Diluted EPS from continuing operations:
– GAAP: $3.46, down 8 percent;
– Operating (non-GAAP): $3.68, down 10 percent;
o Net income from continuing operations:
– GAAP: $3.5 billion, down 17 percent;
– Operating (non-GAAP): $3.7 billion, down 18 percent;
o Consolidated results, including net loss on discontinued operations of $3.4 billion:
– Net income: $18 million
– EPS: $0.02
o Gross profit margin from continuing operations:
– GAAP: 48.6 percent, down 40 basis points;
– Operating (non-GAAP): 49.2 percent, down 90 basis points;
o Revenue from continuing operations: $22.4 billion:
– Down 4 percent; down 2 percent adjusting for divested customer care outsourcing business and currency;
o Strategic imperatives grew double digits year-to-date:
– Cloud revenue up more than 50 percent year-to-date;
— For cloud delivered as a service, up 80 percent year-to-date with a third-quarter annual run rate of $3.1 billion;
– Business analytics revenue up 8 percent year-to-date;
– Mobile revenue more than doubled year-to-date;
– Security revenue up more than 20 percent year-to-date;
o Impact of customer care outsourcing, industry standard server and Microelectronics business divestitures, based on full-year 2013:
– Generated more than $7.0 billion of annual revenue;
– Incurred more than $0.5 billion in annual pre-tax losses.
IBM and GLOBALFOUNDRIES today announced that they have signed a Definitive Agreement under which GLOBALFOUNDRIES plans to acquire IBM’s global commercial semiconductor technology business, including intellectual property, world-class technologists and technologies related to IBM Microelectronics, subject to completion of applicable regulatory reviews.
GLOBALFOUNDRIES will also become IBM’s exclusive server processor semiconductor technology provider for 22 nanometer (nm), 14nm and 10nm semiconductors for the next 10 years.
The Agreement, once closed, enables IBM to further focus on fundamental semiconductor research and the development of future cloud, mobile, big data analytics, and secure transaction-optimized systems.
IBM continues its previously announced $3 billion investment over five years for semiconductor technology research to lead in the next generation of computing. GLOBALFOUNDRIES will have primary access to the research that results from this investment through joint collaboration at the Colleges of Nanoscale Science and Engineering (CNSE), SUNY Polytechnic Institute, in Albany, N.Y.
As part of this Agreement, GLOBALFOUNDRIES will gain substantial intellectual property including thousands of patents, making GLOBALFOUNDRIES the holder of one of the largest semiconductor patent portfolios in the world. GLOBALFOUNDRIES also will benefit from an influx of one of the best technical teams in the semiconductor industry, which will solidify its path to advanced process geometries at 10nm and below.
Additionally, the acquisition opens up business opportunities in industry-leading radio frequency (RF) and specialty technologies and ASIC design capabilities.
GLOBALFOUNDRIES will acquire and operate existing IBM semiconductor manufacturing operations and facilities in East Fishkill, New York and Essex Junction, Vermont, adding capacity to serve its customers and thousands of jobs to GLOBALFOUNDRIES’ workforce.
GLOBALFOUNDRIES will also acquire IBM’s commercial microelectronics business, which includes ASIC and specialty foundry, manufacturing and related operations and sales. GLOBALFOUNDRIES plans to invest to grow these businesses.
IBM will reflect a pre-tax charge of $4.7 billion in its financial results for the third quarter of 2014, which includes an asset impairment, estimated costs to sell the IBM microelectronics business, and cash consideration to GLOBALFOUNDRIES.
Cash consideration of $1.5 billion is expected to be paid to GLOBALFOUNDRIES by IBM over the next three years. The cash consideration will be adjusted by the amount of working capital which is estimated to be $200 million.
The transaction is subject to the satisfaction of regulatory requirements and customary closing conditions.
IBM oday announced that leading Internet hosting provider OVH has launched an on-demand cloud service based on IBM’s POWER8 processor, tuned specifically for Big Data, high performance computing and database workloads.
In addition to introducing this new cloud service, OVH has become the newest member of the OpenPOWER Foundation, an open development community over 60 members strong worldwide collaborating to further leverage the POWER processor’s open architecture for broad industry innovation.
OVH serves 700,000 customers with 180,000 hosted environments in 17 data centers around the world. The company was looking to provide current and future clients with a fast, robust public cloud service that could specifically meet the needs of clients who manage large amounts of data or require extreme scalability. OVH turned to IBM and its new Power Systems for the release of the newest version of its cloud service, RunAbove.
RunAbove is OVH’s public cloud offering that provides on-demand services at an hourly rate. The newest RunAbove service, enabled by PowerKVM virtualization and the Fedora Linux open source operating system, OpenStack Infrastructure-as-a-Service software and POWER8 processor-based Power Systems is specifically designed to allow developers access to high performance hardware for their Big Data and analytics workloads in a public, scalable cloud environment.
To cater to specific customer requirements, OVH has developed two cloud offerings that deliver advanced technology with IBM Power Systems.
The S offering is based on shared virtual servers hosted on a single POWER8 system and the set up is ideal for developers who want to test the characteristics of the POWER8 architecture to fit a range of their applications.
While the 2XL service, which offers one virtual server per physical host, provides customers dedicated access to the power of the IBM POWER8 architecture and is well-suited for workloads that require compute-intensive resources. This specific offering is designed to service high-tech research and development efforts.
These two offerings take advantage of both OVH infrastructures and data centers in North America and Europe.
To test the RunAbove compute-based POWER8 services, please visit http://labs.runabove.com.
IBM and OVH Group will showcase the new RunAbove service during the OVH World Tour San Francisco event on October 20. For more information or to register, please visit: http://www.ovh.com/sf.
Apple Announcement Recap: New iPad Air 2, Retina 5K iMac, Availability Soon of Apple Pay and WatchKit SDK
Once again, there were streaming challenges at the start of the webcast that seemed to settle down as Apple drew closer to the key announcements, but this post will start where Apple CEO Tim Cook ended the webcast, in his broader positioning of the current Apple product portfolio:
- People need different types of technology for the way they live their lives. Sometimes you want to sit at your desk in front of a huge, beautiful, immersive screen packed with powerful technology. (iMac)
- Sometimes you want to take that powerful technology with you wherever you go. (Macbook Pro/Air)
- Sometimes you want to be close to your content — touching it. And we’ve made that experience even better today (iPad Air 2, iPad Mini 3)
- Sometimes you want to hold that technology in the palm of your hand, and there’s no better way than the iPhone 6/6+
- And soon, you can wear that powerful technology right on your wrist (Apple Watch)
- This is our vision of personal technology, and we are just getting started.
The lead product reveal was the introduction of the iPad Air 2, which is 6.1mm, the “thinnest iPad we’ve ever made,” said Cook, and 18 percent thinner than the original iPad Air. It’s powered by the new A8X chip that was touted as having 180X faster graphics performance than the original iPad, but still maintains a 10-hour battery life.
For photogs, it has an 8MP iSight camera with f/2.4 aperture and 1080p HD video, and a whole slow of cool new photography effects and capabilities. It also includes Touch ID and Apple Pay, and comes with iOS 8.1.
Apple also announced a new 27-inch iMac with retina display, and for the real gadget hounds, breathed new life into the Mac Mini with a new iteration running a 4th-gen Intel Core and great energy efficiency and priced at $499.
Apple Pay will kick into effect starting this coming Monday, with Cook announcing the additional support of 500 other banks — and just in time for the holiday shopping season!
Here’s what Apple had to say about Apple Pay in a press release:
Apple Pay offers an easy, secure and private way to pay using Touch ID™ on iPhone® 6 and iPhone 6 Plus in stores and within apps. Users of the just-announced iPad Air™ 2 and iPad mini™ 3 will be able to use Touch ID on their devices for Apple Pay within apps. The new service will be enabled by a free software update to iOS 8.
As to some of the retailers supporting Apple Pay with the touch of a finger, the list includes 262 Apple retail stores and the following partners:
Aéropostale, American Eagle Outfitters, Babies”R”Us, BJ’s Wholesale Club, Bloomingdale’s, Champs Sports, Chevron and Texaco retail stores including ExtraMile, Disney Store, Duane Reade, Footaction, Foot Locker, House of Hoops by Foot Locker, Kids Foot Locker, Lady Foot Locker, Macy’s, McDonald’s, Nike, Office Depot, Panera Bread, Petco, RadioShack, RUN by Foot Locker, SIX:02, Sports Authority, SUBWAY, Toys”R”Us, Unleashed by Petco, Walgreens, Wegmans and Whole Foods Market. In addition, many others will add support this year, such as Anthropologie, Free People, Sephora, Staples, Urban Outfitters, Walt Disney Parks and Resorts and more.
Online shopping partners at launch will include:
Apple Store app, Chairish, Fancy, Groupon, HotelTonight, Houzz, Instacart, Lyft, OpenTable, Panera Bread, Spring, Staples, Target and Uber. Many more will support Apple Pay by the end of this year with popular apps such as Airbnb, Disney Store, Eventbrite, JackThreads, Levi’s® Stadium by VenueNext, Sephora, Starbucks, StubHub, Ticketmaster and Tickets.com
For the Apple Watch, Apple announced the WatchKit SDK would be available in November. WatchKit will give developers the ability to build apps for the Apple Watch in advance of its debut sometime next year.
Reddit announced via its blog yesterday that the most popular iOS client for reddit, Alien Blue, is now “an official reddit app.”
You can download the app here, and the blog.reddit indicated that everyone could get the Alien Blue Pro upgrade free for one week. Also, the iPad app will be free until they integrate it with the iPhone app and the two become one universal app.
TechCrunch asked reddit’s head of Strategic Partnerships why the buy:
“Our whole philosphy has been to give our users choice. We’ve got the reddit AMA app, and alienblue coming out… but we really want users to use whatever they want.” says Ellen Pao, reddit’s head of Strategic Partnerships. “We think Alienblue is great, and it’s the most popular reddit app on iOS. We wanted to be able to offer it as a reddit app, and we wanted to help Jase with additional resources to do everything he wanted to do with it.”
Re/code has Reddit biz dev lead Ellen Pao saying that:
Reddit would continue to be committed to third-party Reddit apps. She estimated there are hundreds of them, many focused on just a certain “subreddit” forum, or on viewing images.
Re/code also suggested Reddit was falling behind on the mobile juggernaut:
At this point, many social media sites get half or more of their traffic from mobile, so it’s kind of insane that Reddit hasn’t put more focus on this front. Pao’s explanation: “We never had the resources.”
- via Re/code
What about an Android version?
“We would love to have something on Android, but we need to hire, and it’s been hard to hire in mobile,” Pao said.
Whole thing kinda reminds me of that time Twitter bought TweetDeck.
What a week. If you’ve got any money in the U.S. stock market, it’s been an exhilirating ride.
The Ebola narrative seems to change by the nanosecond.
I don’t even know what the latest is with Isis.
Just so we can leave some of this negativity behind, at least for a little while, I think it’s a really good time for some new product introductions, don’t you?
And boy are we getting them!
HBO, then CBS, have both announced new streaming services, sending cord cutters everywhere into ecstasy. Pricewise, CBS All Access will come in at $5.99/month (but only in 14 cities to start), and HBO GO will come in at…well, whatever HBO wants to come in at (the pricing is not yet announced).
That price point could be critical for HBO Go, as Netflix just lost 25 percent of its value after missing their subscriber targets in the latest quarter. Back in May, they raised streaming rates by $1 to $8.99 monthly.
Well, if we’re going to get all these new streaming services, we’re gonna need some new devices to watch them on, right?
Google announced a whole slew of new products yesterday, including a Nexus 6 phone, a Nexus Player streamer, and a Nexus 9 tablet. Might that have been a pre-emptive strike against Apple’s new iPad introductions today?
Expected from Apple today, the Apple iPad Air 2, an Apple Mini 3, and a new retina iMac….but we know better, because at Apple product introductions (re: theatre), there’s always “…one more thing.”
For my money, that could start to be the problem for these additional streaming services…they’re just one more thing, and all those things start to add up.
I cut my own cable cord a year plus ago, and now get digital HD over-the-air transmissions via a TiVo box. To supplement that, I got both Amazon Prime and Netflix subscriptions. Only problem is, after that year, I’m at the bottom of the content barrels, trying to find something to watch and wondering what happened to those magical recommendation algorithms.
Though HBO is a welcome addition to the party, it, along with CBS’ streaming announcement, makes one wonder what the online filmed content future is going to look like.
While on the one hand many want unbundling of 57 channels and nothing on, on the other it could get messy paying for a gazillion different individual services, even with your newfangled Apple Pay capability.
Me, I’m just holding out for someone to build a smart Watson service that goes out and finds me some good content while I’m trying to figure out how to pay all these disparate streaming bills.
Qualcomm announced today it would be buying U.K. chipmaker and bluetooth pioneer CSR Plc for U.S. $2.5 billion to expand its connected appliances capabilities. CSR has been a pioneer in Bluetooth and other connected technologies.
This could best be described as an “Internet of Things” play, an area Qualcomm has been focusing on in its expansion beyond mobile phone semiconductors (like SnapDragon).
Bloomberg on the deal:
Qualcomm has been building up its business for the so-called Internet of things and the CSR acquisition is a sign that the semiconductor industry is becoming more focused on making chips for devices such as connected cars and thermostats that can be controlled from a mobile phone, Lee Simpson, an analyst for Jefferies, said in a note today.
Bloomberg notes that this past July Qualcomm also bought Wilocity Ltd., which makes Wi-Fi products that can be used in home Internet routers and appliances that connect to the Web. Qualcomm has also developed the AllJoyn platform, an open-source project that helps connected devices work together.
And lest you think connecting all this stuff together isn’t a major market opportunity, think again. IDC estimates the IoT market to rise to $7.1 trillion by 2020 from $1.9 trillion in 2013, researcher IDC has said.
That’s trillions, not billions.
You wouldn’t know it was “National Cyber Security Awareness Month” this month with all the cyber security breaches and break-ins going on — and those are just the ones we know about.
Yesterday, Google published details of yet another vulnerability, this time one that detailed a vulnerability in the design of SSL version 3.0, and which allows the plaintext of secure connections to be calculated by a network attacker:
SSL 3.0 is nearly 15 years old, but support for it remains widespread. Most importantly, nearly all browsers support it and, in order to work around bugs in HTTPS servers, browsers will retry failed connections with older protocol versions, including SSL 3.0. Because a network attacker can cause connection failures, they can trigger the use of SSL 3.0 and then exploit this issue.
Mozilla in turn provided an immediate recommendation to turn SSL 3.0 off:
SSL version 3.0 is no longer secure. Browsers and websites need to turn off SSLv3 and use more modern security protocols as soon as possible, in order to avoid compromising users’ private information. We have a plan to turn off SSLv3 in Firefox. This plan was developed with other browser vendors after a team at Google discovered a critical flaw in SSLv3, which can allow an attacker to extract secret information from inside of an encrypted transaction. SSLv3 is an old version of the security system that underlies secure Web transactions and is known as the “Secure Sockets Layer” (SSL) or “Transport Layer Security” (TLS).
They will do so shortly:
SSLv3 will be disabled by default in Firefox 34, which will be released on Nov 25. The code to disable it is landing today in Nightly, and will be promoted to Aurora and Beta in the next few weeks. This timing is intended to allow website operators some time to upgrade any servers that still rely on SSLv3. As an additional precaution, Firefox 35 will support a generic TLS downgrade protection mechanism known as SCSV. If this is supported by the server, it prevents attacks that rely on insecure fallback.
IBM today announced a set of digital tools that change the Internet of Things (IoT) landscape by enabling a company to build an IoT application in just a few minutes. The cloud service was developed based on the thousands of IoT client engagements IBM has led under the umbrella of its Smarter Planet initiative.
The new service, called the IBM Internet of Things Foundation, makes it possible for a developer to quickly and easily extend an Internet-connected device such as a sensor or controller into the cloud, build an application alongside the device to collect the data and send real-time insights back to the developer’s business.
The IoT Foundation service is part of IBM Bluemix, IBM’s leading cloud application platform. It delivers rapid access to, and provides valuable insights from, IoT device data coming from billions of Internet-connected sensors and controllers. IBM Bluemix is an open-standards, cloud platform for building, managing and running applications of all types, including for the web, mobile, big data and smart devices.
By placing all this connectivity in the cloud, equipment and asset manufacturers can use IoT to provide remote service and monitoring to residential and commercial customers, oil and gas companies can remotely monitor and provide predictive maintenance to critical equipment, and logistics companies can track and monitor the condition of goods in transit.
In addition to industrial applications, IoT will allow insurance companies to provide pay-as-you-go insurance, will allow city administrators to make critical infrastructure smarter and will give automobile manufacturers the ability to provide new connected services for vehicles.
“SilverHook Powerboats uses the IoT Foundation service within Bluemix as the basis for its real-time power boat telematics platform, allowing it to run complex diagnostic analytics in real time on racing boats traveling at high speeds on the ocean,” said Nigel Hook, CEO, DataSkill. “The ocean can be a brutal environment and it’s the platform that DataSkill and SilverHook Powerboats chose to prove out their IBM solutions for intelligently predicting performance and reliability while on the ocean race track at 140 mph.”
The analyst firm IDC estimates that by 2020 there will be as many as 28 billion autonomous IoT devices installed. Today IDC estimates there are nine billion such devices.
Business Partners Support IoT Foundation
IBM also is announcing plans to form a partner program for IoT, along with a set of certified instructions, or “recipes,” for connecting devices, sensors and gateways from a variety of its partners. The partners are expected to include ARM, B&B Electronics, Elecsys, Intel, Multi-Tech Systems, Inc. and Texas Instruments.
“The Internet of Things is a huge opportunity for developers to connect their devices to the cloud to collect and share data making factories, automobiles, homes, buildings and personal electronics more intelligent. IBM’s IoT Foundation complements our broad portfolio of hardware and software system solutions for IoT nodes and gateways,” said Avner Goren, general manager strategic marketing, Embedded Processing, Texas Instruments (TI).
Generating Business Insight with Bluemix
As an integral part of IBM Bluemix, the IoT Foundation is designed to provide simple, highly secure and powerful application access to IoT devices and data. Clients can rapidly compose analytics applications, visualization dashboards and mobile apps that can generate valuable insights when linked with back office enterprise applications.
These data analytics applications can generate new opportunities for individuals and organizations and allow them to gain new insights into the physical world surrounding their operations.
For example, developers can easily combine data from sensors with predictive analytics to predict failures in critical equipment before any failure occurs and automatically dispatch a repair technician, which can reduce downtime and improve productivity.
At the same time, developers can quickly build mobile apps that can act as remote controls to connected devices. This may allow engineers to learn more about how their products perform in the field to drive faster innovation through closed-loop product development.
The IoT Foundation is offered as a fully managed cloud service within IBM Bluemix. The software service is designed to allow developers to quickly onboard devices using industry-standard application programming interfaces (APIs) and protocols.
IBM Bluemix is available today for developers worldwide.
The IBM Internet of Things Foundation will be available Oct. 21, 2014.
The IBM Internet of Things Business Partner program will be available on IBM PartnerWorld.
IBM and SAP today announced that SAP has selected IBM as a premier strategic provider of cloud infrastructure services for its business critical applications –- accelerating customers’ ability to run core business in the cloud.
The SAP HANA Enterprise Cloud offering is now available through IBM’s highly scalable, open and secure cloud. SAP HANA Enterprise Cloud will expand to major markets with the addition of the IBM cloud data centers.
This is expected to enable customers to deploy their SAP software around the globe in a faster and more secure environment that is backed by IBM’s proven cloud capabilities.
“We look forward to extending one of the longest and most successful partnerships in the IT industry,” said Bill McDermott, CEO of SAP. “The demand for SAP HANA and the SAP Business Suite on SAP HANA in the cloud is tremendous and this global agreement with IBM heralds a new era of cloud collaboration. We anticipate customers will benefit from this collaboration and expansion of SAP HANA Enterprise Cloud.”
“This announcement is a significant milestone in the deployment of enterprise cloud,” said IBM Chairman, President and CEO Ginni Rometty. “It builds on our two companies’ long history of bringing innovation to business, and extends IBM’s position as the premier global cloud platform. Our secure, open, hybrid enterprise cloud platform will enable SAP clients to support new ways to work in an era shaped by big data, mobile and social.”
Together, IBM and SAP have the expertise, solutions and cloud infrastructure to deliver SAP business solutions on the IBM Cloud. SAP brings the power of realtime through in-memory computing capabilities of SAP HANA combined with the ability to run mission-critical business applications, like SAP Business Suite, in a cloud environment.
IBM brings enterprise depth and the open architecture of IBM Cloud Managed Services and SoftLayer — enabling customers to securely manage SAP workloads from trial to production on a consistent infrastructure, with transparency and control over where data resides.
In addition, customers will benefit from the technology and services from both companies that offer industry-specific best practices, enabling customers to transform their organizations. SAP and IBM customers of all sizes will benefit from this joint collaboration of two of the most trusted companies in the industry.
Key Benefits to Enterprises of All Sizes Are Expected to Include:
Customers can take advantage of SAP HANA Enterprise Cloud with the global footprint of IBM Cloud. This enables customers to put data to work with SAP HANA and business applications in the IBM Cloud built for speed, transparency and control.
SAP HANA will run on IBM Cloud to provide an open-standards-based approach that will help create the foundation to more easily integrate existing technology investments with new workloads.
IBM and SAP are committed to security for enterprise customers in the cloud. The IBM Cloud provides visibility and control to enable enterprises to apply and extend their security best practices into a cloud environment.
Companies will now have additional reach and scale to more easily start locally and scale globally with cloud capabilities and also comply with data residency and other regulatory mandates.
For more information, visit the SAP News Center.