Tag Archives: amzn

How Much Does Joe Make? That’s No Secret At Some Companies

For 30 years, Whole Foods Market ( WMT ) has operated with a transparent salary policy. Any employee can find out the pay of every one of the company’s 91,000 workers, from the most junior grocery baggers to co-CEOs John Mackey and Walter Robb. The company even has a salary cap. No one — not even Mackey or Robb — can be paid more than 19 times the average hourly pay of all Whole Foods employees. That, not surprisingly, has changed the way employer and employees negotiate. “It’s a great check and balance for us,” says Mark Ehrnstein, global vice president of team member services.  “Team members often have questions about what someone else earns. Our open pay policy gives them clean line of sight into that.” Ehrnstein says that many employees take advantage by making an appointment with the HR department, during which they can view the so-called “wage disclosure report” and take all the notes that they want to incorporate into their own salary negotiations. (Printing the report is not allowed.) The impact of the policy is hard to quantify, but plenty of evidence suggests that it’s worked in the company’s favor. Ehrnstein says that Whole Foods’ employee turnover rates are much lower than its competitors’, and the company has been on Fortune Magazine’s list of the 100 best places to work for 18 years running. And yet, despite the example that Whole Foods’ policy has set, Ehrnstein says that the companies following in its footsteps are “few and far between.” That may be changing, however, and it shouldn’t come as any surprise that a new wave of pay-transparency trailblazers is rising from Silicon Valley, land of innovation. Startup Buffer Posts Its Salaries Social media management startup Buffer has taken Whole Foods’ model a step further by making its salaries truly public: Every employee’s salary is published on the company’s website (under the “transparency” button on site’s home page).  And while transparency has become a big part of the five-year-old company’s identity, that wasn’t the plan. The whole thing started because Buffer’s founders wanted to share their progress with the world. “We started tweeting, ‘Today we are making $100/month,’ ” says co-founder Leo Widrich, who serves as chief operations officer. “It didn’t strike anyone as transparent. We were just sharing what we’re doing.” But as the numbers got bigger, eventually hitting $1 million a month, people started noticing — and asking why they kept doing it. “We asked ourselves the question: ‘Why should we stop now?’ ” recalls Widrich. The founding team decided to expand on the transparency theme. After getting some mild pushback from employees, it developed a clear (and transparent) formula for determining pay. Then it published a blog post about the new policy … and received some 4,000 new job applications by the next month. Fast forward to today, and the 70-employee Buffer continues to get about 2,000 applications each month. Widrich credits the company’s transparent approach for its success on all fronts. “I believe this has given us an incredible and unexpected boost,” he says. “Customers come to us and say, ‘I chose Buffer as my social media service because I like the way you do things.’ ” Widrich says that transparency is a particularly good fit for young technology companies, which are more prone to pushing the envelope. “This is really deeply rooted in Silicon Valley’s approach to not accepting everything at face value,” he says. “People here generally like to approach things with fresh eyes.” Jet Takes On Amazon With ‘Innovators’ Eyes don’t get much fresher than those at Jet.com, a one-year-old e-commerce startup that aims to challenge Amazon.com ( AMZN ) and has established transparency as one of its core values. Jet’s approach has been to offer employees salary and equity packages dictated by experience and performance levels. Tying equity to experience and performance has proved to be a defining strategy in building a staff committed to the company’s long-term success. “The kind of people who are drawn to Jet are innovators and risk-takers,” says Deena Gianoncelli, executive vice president and chief people officer. “When you’re an owner, you’re not thinking about how much you can get on a short-term basis.” The company doesn’t give raises, per se; if an employee wants to make more, he or she must earn a promotion to the next level. The approach has removed contentiousness from salary negotiations and engendered a more collaborative environment, says the company. Gianoncelli says that more mature companies should consider transparency as well. “I would definitely encourage other companies to really look at what their compensation structure and philosophy is and how it’s driving the collective efforts,” she says. “Companies that are more established would have more work to do in making such a transition, but there are ways.” SumAll Targets ‘Evil’ It all starts, according to Dane Atkinson, CEO of social media analytics startup SumAll, with wanting to drive out the “evil” that he had grown to realize was layered over the way compensation was handled historically. He hoped to take a bite out of that evil when he adopted SumAll’s transparent salary policy upon founding the company in 2011. “We didn’t form this policy to destroy evil,” Atkinson said. “But we realized how insidious the world of compensation was. It’s only in darkness that this kind of stuff can prevail.” Lifting that darkness from SumAll’s salary negotiations — the company basically encourages employees to compare their value to that of other employees — has changed the tone of those conversations, Atkinson says. “It allows us to talk very quickly and honestly about the truth of the matter,” he says. He says that the resulting trust between SumAll and its staff has helped the company keep its employee churn rate at about 10%, generally considered quite low for tech startups. Atkinson agrees with Jet’s Gianoncelli that while more mature companies will face additional challenges in adopting transparent salary policies, it’s in their best interest to consider doing so. And given the number of inquiries that he’s been getting from large HR organizations interested in the bones of a transparency policy, more might be getting ready to test the waters, emboldened by the success of a few brave tech startups. “Openness is always preferable to secrecy,” Atkinson said. “Going from secret to open is daunting, but I think it’s an extremely productive thing for a company to do.”

Apple May Push Into Corporate Cloud Computing Vs. Amazon, Microsoft

Will Apple ( AAPL ) muscle in on Amazon Web Services? Apple’s huge data center build-out might be setting the stage for a jump into cloud computing services for enterprise customers, speculates Oppenheimer. Apple’s capital spending is expected to jump some 34% in 2016 to $15 billion, with about $4 billion going to warehouse-sized data centers packed with computer servers. Morgan Stanley this week said Apple might shift some cloud business away from AWS as competition in consumer products  intensifies with parent Amazon.com ( AMZN ). Oppenheimer analyst Tim Horan, in a research report, goes a step further, saying Apple might start its own infrastructure as a service (IaaS) business as it targets the corporate market. IBM ( IBM ) and Apple have partnered for enterprise marketing. “Looking at Apple’s capex trajectory and recent continued data center builds, we believe there is a possibility the company is setting up an infrastructure as a service offering,” wrote Horan.  “While we realize this is not Apple’s core competency, it is obvious it has built out its own CDN network and will continue to expand it. “It is also apparent to us that by building out an IaaS offering to businesses, Apple may be able to drive its hardware business into the enterprise. This would be an interesting development and is certainly a wild card.” Apple plans to open a massive data center in Mesa, Ariz. It also wants to expand a large data center in Reno, Nev. Amazon expanded into cloud computing by leveraging the massive Internet infrastructure that it had built to support its e-commerce business. Apple launched iCloud for consumers, but additional server capacity could be used for corporate cloud services. Aside from Amazon’s AWS, Microsoft ( MSFT ) and  Alphabet ‘s ( GOOGL ) Google are the biggest providers of IaaS services. The other big investor in data centers is Facebook ( FB ), as it whisks more video to mobile devices. “From (Facebook-owned) Instagram/WhatsApp to Google Hangouts, Web-scale consumer-facing companies are leveraging cloud computing and superior network architectures to become de facto communications companies, and they are spending the capital to do so,” Horan said. Apple has also built its own content delivery network, making it less dependent on  Akamai Technologies ( AKAM ), the leading provider of CDN services. Horan sees upside in data center expansion for companies such as Level 3 Communications ( LVLT ) and Zayo Group ( ZAYO ).

Tableau Software Stock Crashes On Weak Guidance, Amazon Threat

Tableau Software ( DATA ) late Thursday posted Q4 earnings minus items and sales that beat expectations, but shares were down more than 35% in after-hours action amid signs that  Amazon.com ( AMZN ), Microsoft and others were grabbing Big Data market share. Tableau’s outlook for the current quarter missed Wall Street views, at least one analyst said Q4 licensing revenue missed and at least one analyst said the Q4 sales beat lagged many analyst expectations. Tableau reported earnings minus items of 33 cents, down 21% from the year-earlier quarter but well ahead of the 16 cents expected by analysts polled by Thomson Reuters. But Tableau’s net loss, using generally accepted accounting principles, soared to 57 cents a share from 27 cents. In its earnings release, the maker of Big Data analytics software said its Q4 “tax expense was $34.1 million due to the recognition of a valuation allowance. We believe that it is more likely than not that the benefit from our U.S. federal and state deferred tax assets will not be realized. In recognition of this risk, we have provided a valuation allowance of $46.7 million on the deferred tax assets relating to these jurisdictions.” Q4 revenue rose 42% to $202.8 million, $2 million above analyst estimates, but “the buy side was looking for sales upside of $20 million-plus,” William Blair analyst Bhavan Suri wrote in a research note emailed after the earnings release. License revenue rose 31% to $133.1 million in Q4, but Global Equities analyst Trip Chowdhry said the missed Wall Street expectations and indicated the “market is moving away from (Tableau) products, to alternatives like (Amazon.com’s) AWS QuickSight,” financial news site Benzinga reported. Tableau also gave weak revenue guidance for Q1 and 2016. In the company’s earnings conference call with analysts, Tableau CFO Tom Walker guided Q1 to an 8- to 12-cent loss per share minus items, worse than the 6-cent gain expected by analysts. Walker guided revenue at $160 million to $165 million, up 27% at the high end but well below the $179.5 million analysts expected. For the year, Tableau sees revenue of $830 million to $850 million, up 30% at the high end but short of the $871 million analysts expected. Its EPS outlook also missed. In an email, Summit Research analyst Srini Nandury reminded IBD that he’d warned that “Tableau is perceived as expensive.” in a post-Q3 research note. “We have data and have heard anecdotally that the Tableau solution is the most expensive in the market when compared with” products from rivals Microsoft ( MSFT ) and Qlik Technologies ( QLIK. ) “It would not be a surprise if (Microsoft’s) PowerBI finds greater traction with Excel users, precisely the same users Tableau is targeting,” Nandury said. In a subsequent phone interview, Nandury told IBD “the company is going to remain in the penalty box for a long time to come, basically because they blew up in such a massive scale. They have not only guided down Q1 but they also guided down the full year. “Microsoft is giving away their software for free. Amazon is coming up with their own … our thesis on the stock has always been that Tableau is a one-trick pony.” In a Jan. 15 research note, Nomura analyst Aashiv Shah warned of competition faced by Tableau and Qlik from Microsoft: “Competition is increasing, with (Qlik) partners noting increased customer interest in Microsoft’s Power BI, which is a freemium product and sells at a cheaper price compared to Qlik and Tableau. While Power BI continues to lag Qlik and Tableau in terms of user experience and functionality, its lower price point could eventually lead to pricing pressure in the analytics market.” Tableau stock was 36% in after-hours trading, after rising nearly 3% in Thursday’s regular session. Tableau also competes with much-larger  Oracle ( ORCL ), Splunk ( SPLK )  and others. Shares of both Splunk and Qlik were down 11% after-hours Tableau is spending heavy to compete. Research and development costs in Q4 soared 155% vs. the year-earlier quarter, to $17.9 million, while sales and marketing costs rose 135%, to $13.9 million. The company said it hired more than 1,000 employees in 2015, bringing its headcount to more than 3,000. It also opened seven new offices in the year, bringing the number of total offices to 16 worldwide. “In Q4, a record 3,600 new customer accounts chose Tableau, bringing our total to more than 39,000 worldwide,” Tableau CEO Christian Chabot said in the earnings release. “This speaks to the immense popularity of Tableau’s products and continued strong demand from customers around the world.”