Tag Archives: request

Google Seen Slashing Cloud Pricing Vs. Amazon, Microsoft

The next round of price cutting in public cloud computing services could come from Alphabet ’s ( GOOGL ) Google, just as Amazon.com and Microsoft show some restraint, says a Goldman Sachs research report. Amazon Web Services (AWS), part of  Amazon.com ( AMZN ) , is the biggest provider of infrastructure as a service (IaaS), where customers rent computer servers and data storage systems via the Internet. Microsoft ( MSFT ) and Alphabet’s Google are the next biggest. The new boss of Google’s cloud business, Diane Greene, will make her debut at that unit’s user conference March 23 to 24, notes the Goldman Sachs report. Greene, a Google board member since January 2012, founded virtualization leader VMware ( VMW ), which she led as CEO until she was forced out in 2008. In November, Google acquired Greene’s startup, Bebop, for $380 million. While AWS has been the biggest IaaS price-cutter of the last decade, Google Cloud Platform (GCP) has been aggressive since moving into the market. Google slashed prices in March 2014, October 2014 and May-June 2015, Goldman analyst Heather Bellini said in the report. “Another 20% to 30% across-the-board price cut from Google in 2016 would not be surprising,” wrote Bellini. “This could be announced as early as their GCP Next conference in San Francisco on March 23-24. Similar to behavior in 2015, we do not expect Amazon and Microsoft to follow suit.” Goldman Sachs says that the top three service providers are gaining share as Verizon Communications ( VZ ), Hewlett Packard Enterprise ( HPE ) and others exit the public IaaS market and focus on private clouds. Goldman Sachs estimates that AWS’ revenue will hit $12.5 billion in 2016, up from $7.88 billion last year. “If AWS surpasses $10 billion in 10 years, it would be the fastest-growing software business,” surpassing Microsoft, Oracle ( ORCL ), and SAP ( SAP ),” Bellini wrote.

Valeant Stock Sinks As 2016 Guidance Withdrawn, CEO Returns

Embattled specialty drug maker Valeant Pharmaceuticals ( VRX ) said Monday that it was withdrawing its financial guidance and will reschedule its Q4 earnings release, as CEO J. Michael Pearson returns after a long illness. Valeant stock was down 9% in morning trading in the stock market today , near 73 and near a three-year low of 69.33 touched in November. Valeant had planned to report its quarterly results Monday morning, though they would have been unaudited due to an ongoing review of the company’s finances following a scandal last fall that called into question Valeant’s accounting and its relationship with now-closed specialty pharmacy Philidor. Last Monday, the committee reviewing those issues announced an interim finding that $58 million in Philidor-related revenue should not have been booked in 2014, leading to a 10-cent reduction in EPS for that year. However, since some of that revenue was supposed to be booked later, it would add 9 cents to 2015 EPS. Valeant CEO Fought Pneumonia Pearson came down with severe pneumonia at Christmastime and had to be hospitalized for so long that Valeant appointed former CFO Howard Schiller to take over his job temporarily. Pearson had also been chairman, but when he returned to work Monday the company said it would separate the two roles and appointed five-year board member Robert Ingram as chairman. Valeant affirmed its 2016 guidance in mid-January, calling for a 21% increase in sales and a 31% hike in EPS. The fact that it’s now withdrawing that guidance is a worrisome sign, say analysts. “While we had expected updated guidance, we struggle to fully understand the rationale for removing guidance altogether,” wrote Nomura analyst Shibani Malhotra in a research note. But Malhotra says Pearson’s return is a positive sign. “We believe investors still view much of Valeant’s strategy and success as driven by Pearson, and we expect that the ability to retain him as a leader will allow the company to maintain one of its more significant competitive advantages,” she wrote. “Perhaps more importantly, we believe the fact that Pearson is returning as CEO bolsters the credibility of the company and the board of directors, given that the board publicly supported Pearson and his leadership throughout the recent public scrutiny.” RBC Capital Markets analyst Douglas Miehm agreed, noting that Pearson said he would try to build stronger relationships with payers and government regulators and would improve Valeant’s accounting and transparency. “Having said this, we see the overall approach to rescheduling Q4 and withdrawing guidance after reiterating it in January as likely to carry more weight until Mr. Pearson has been able to reach out to the Street and provide some clarity,” Miehm wrote in his research note. Valeant also revealed that Actavis, the generic drug maker in the process of being acquired by Teva Pharmaceutical Industries ( TEVA ), had filed for FDA approval of a generic version of Xifaxan 550mg, a gastrointestinal drug that was the main selling point of Valeant’s $11 billion acquisition of Salix Pharmaceuticals last year. “We note that Valeant currently has 22 patents covering Xifaxan 550, which are scheduled to expire between August 2019 and October 2029,” Miehm wrote. “We continue to believe a generic is unlikely for at least seven years.”

IBM To Acquire Resilient Systems, Undercut Cisco, Symantec, FireEye

Tech giant IBM ( IBM ) plans to undercut Cisco Systems ( CSCO ), Symantec ( SYMC ), FireEye ( FEYE ) and Rapid7 ( RPD ) by acquiring incident response firm Resilient Systems and partnering with endpoint security provider Carbon Black, the company announced Monday. The announcement comes a week after IBM unveiled a deeper tie to No. 1 cybersecurity pure-play  Check Point Software Technology ( CHKP ) to pool research and integrate systems. IBM stock was up 0.9% in morning trading on the stock market today . IBD’s 25-company Computer Software-Security industry group was down a fraction Monday as companies headed to the RSA Conference, a massive cybersecurity industry gathering that runs all week in San Francisco. Caleb Barlow, vice president of IBM Security, described the Resilient Systems acquisition as the cornerstone of a three-prong strategy to protect, defend and respond to cyberbreaches. Per IBM policy, he wouldn’t disclose the price tag for the privately held, 100-employee company. “This ultimately gives us the ability to expand from protecting and defending the enterprise to also being able to respond to a breach,” Barlow told IBD. “This combination of a new acquisition and the associated partnerships really make a move into the incident-response space.” Carbon Black Has Big Share Of Endpoint Security In conjunction with the acquisition, IBM will partner with endpoint security firm Carbon Black. Privately held Carbon Black owns 37% of the endpoint market, according to industry tracker IDC. Carbon Black’s platform will allow IBM analysts to conduct security forensics on compromised endpoint devices. Resilient Systems will be integrated into IBM’s incident-response platform, dubbed X-Force Incident Response Services. Via X-Force, IBM will counsel clients through all parts of a cyberbreach and on ways to avoid such breaches. Barlow likened the service to a fire drill. “Most companies don’t have good incident-response plans,” he said. “There’s a binder on the shelf for what to do in the case of a fire or what to do in the case of a flood, but not necessarily what to do in the case of a cyber incident.” That “binder” includes pertinent leadership, disclosure and public relations keys in case of a breach, he said. IBM’s move allows the company to “pivot” from protecting and defending to responding to a breach, he says. It’s all part of IBM’s push into the cybersecurity market. In 2015, IBM pulled in $2 billion in security revenue. That was up 12% but still accounted for only 2.4% of IBM’s total revenue of more than $81 billion, which fell 12%. But the dollar amount topped total sales for security pure-players Palo Alto Networks ( PANW ), Proofpoint ( PFPT ), Fortinet ( FTNT ) and FireEye. And IBM’s security business also outgrew Symantec and Check Point. The security unit was launched four years ago, Barlow says. Since then, it has added 7,300 employees — 1,000 last year alone — and operates in 133 countries globally. “Imagine if that were the conversation about a Silicon Valley startup,” he said.