53.85 +0.57 (1.07%)
Pre-market: 6:03AM EDT
|Bid||53.26 x 1200|
|Ask||53.78 x 2900|
|Day's range||52.64 - 53.29|
|52-week range||39.71 - 60.50|
|Beta (5Y monthly)||1.06|
|PE ratio (TTM)||16.89|
|Earnings date||17 Jun 2020 - 22 Jun 2020|
|Forward dividend & yield||0.96 (1.80%)|
|Ex-dividend date||08 Apr 2020|
|1y target est||50.84|
(Bloomberg) -- Zoom Video Communications Inc. reported quarterly sales that leapfrogged estimates, showing that a surge in demand for its video-conference service during the coronavirus pandemic has translated into more paying customers. The company also about doubled its annual revenue forecast.Revenue increased about 170% to $328.2 million in the period that ended April 30, the San Jose, California-based company said Tuesday in a statement. Analysts, on average, expected $203 million, according to data compiled by Bloomberg. Profit, excluding some items, was 20 cents a share, compared with analysts’ average projection of 9 cents.Zoom projected sales of as much as $1.8 billion in the fiscal year, from a forecast of as much as $915 million in early March. Analysts estimated $930.8 million.Chief Executive Officer Eric Yuan has tried to ensure that his virtual-meeting platform can cope with a swell of demand from people forced to remain home to prevent the spread of Covid-19. While security and privacy issues plagued the system early in the quarantine, Zoom has become an essential social network, attracting more than 300 million participants some days, up from 10 million in December. The software maker allows gatherings of as long as 40 minutes for no charge. While Zoom has attracted more buzz than corporate rivals, its ability to attract more paying customers will determine how well it’s faring against competition from Microsoft Corp., Cisco Systems Inc. and Alphabet Inc.’s Google.Shares increased 4% in extended trading after closing at a record $208.08 in New York. The stock has more than tripled this year.Zoom said it ended the quarter with about 265,400 customers with more than 10 employees, a more than fourfold increase from the same period a year earlier. The company now has 769 corporate clients that have spent more than $100,000 on Zoom’s products over the last 12 months, about double from a year earlier.The company said its expects adjusted profit in the fiscal year will be $355 million to $380 million, or $1.21 to $1.29 a share. Analysts had estimated 46 cents, just more than Zoom’s earlier forecast. The company has been spending to bolster its network capacity, including by buying cloud-computing services from Oracle Corp. during the pandemic. Zoom also continues to use Amazon.com Inc.’s cloud service.With Zoom’s popularity has come controversy over the company’s security practices. Trolls have invaded myriad meetings, religious gatherings and other events, to share pornography and shout profanity or racial epithets, in a phenomenon known as “Zoombombing.” The company highlighted or created a raft of tools users can employ to prevent the virtual attacks, including passwords and waiting rooms.There also were instances when Zoom calls were routed through servers in China even when no participant was based there and users were unwittingly sending metadata to Facebook Inc. when they signed in. Zoom put an end to both practices. The company pledged to commit to bolstering privacy over all other concerns for three months, purchasing a secure-messaging company, Keybase, to bring the highest standard of encryption to the platform, and hiring cybersecurity experts to guide safety efforts.(Updates with profit forecast in the seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Google has taken aggressive action to scrub coronavirus conspiracies from its news service and YouTube, at a time when social media companies have come under intense scrutiny for their potential to spread dangerous disinformation about the global pandemic. It has begun labeling misleading videos aimed at U.S. audiences, and has joined with other major internet companies to coordinate a response against what the World Health Organization has described as an “infodemic.”But Google is also placing advertisements on websites that publish the theories, helping their owners generate revenue and continue their operations. In at least one instance, Google has run ads featuring a conspiracist it has already banned.One ad for Veeam, an independent Microsoft 365 backup service, appeared atop one website featuring an article that includes false claims that Microsoft Corp. founder Bill Gates’s charitable efforts on pandemics and vaccines are a part of a world domination plot. A Microsoft Teams ad ran with a French language article that alleged Gates tried to bribe Nigerian lawmakers to vote for a Covid-19 vaccine. An ad for the telecommunications provider O2 showed up on another article linking the virus to 5G networks, a common conspiracy theory. The ads were placed through Google’s automated system for matching marketers with websites. The Global Disinformation Index, a research group, recently reviewed 49 sites running baseless claims about the virus, including the stories about Gates and 5G networks. Alphabet Inc.'s Google placed ads on 84% of them, generating the majority of the $135,000 in revenue the sites earned each month, according to the Global Disinformation Index’s estimate.Google has faced criticism for funding hyper-partisan publishers such as Breitbart News in the past. The company has avoided making blanket policies about which publishers can run its ads. Instead, it removes ads only from the specific pages carrying content that violates its content policies. It also allows advertisers to blacklist specific sites. The company has been particularly reluctant to take action with political ramifications now that the Trump administration is taking concrete action to punish companies that it argues show bias against conservative viewpoints. Christa Muldoon, a Google spokesperson, said none of the web pages flagged by the Global Disinformation Index violated its policies. “We are deeply committed to elevating quality content across Google products and that includes protecting our users from medical misinformation. Any time we find publishers that violate our policies, we take immediate action,” she said.‘A Huge Issue’ Google's network ad system is a massive machine for automatically generating money for its owner. Websites apply for Google's program, and they add display banners and pop-ups advertisements to their pages. Google's system automatically fills these slots with digital marketing and takes about 30% of the revenue they generate. Although Google offers a level of control to its marquee advertisers, the self-service system sometimes places ads for brands on websites with which they’d prefer not to be associated.Google’s systems have recently placed ads for eBay Inc., Oracle Corp. and HBO on websites like activistpost.com, thegatewaypundit.com and thewashingtonstandard.com, all of which routinely publish conspiracy theories, according to the Global Disinformation Index.Another company that placed ads on the sites in the study was Criteo SA. When contacted by a reporter about an ad mentioned in the report, Luca Sesti, a spokesman for the company, said it was breaking off its commercial relationship with the website in question, thegatewaypundit.com. “In the event we find a partner is not adhering to our policies, we will terminate the relationship immediately,” he said. “We recognize that the dissemination of inaccurate information through ‘fake news’ is a very real problem on the internet.”Often the ads the researchers found made for uncomfortable pairings. The O2 ad ran alongside an article promoting false claims that 5G wireless technology causes people to experience symptoms of coronavirus because it "poisons their cells." “This is a huge issue that Google needs to tackle now,” said Craig Fagan, program director at the Global Disinformation Index. “It is creating a financial incentive for these websites to continue promoting the conspiracy theories. You go to these sites and there are ads galore, pop ups everywhere. The ads are there to get clicks, monetizing each reader.”A Banned Provocateur ReturnsIn one case, Google accepted ad revenue from a company promoting a conspiracy theorist it tried to remove from its own platforms. In early May, YouTube removed the account of David Icke, a British provocateur who often ranted about "Rothschild Zionists" controlling global institutions and has questioned the efficacy of vaccines. In a recent interview about Covid-19, he said that 5G makes people sick and sends out signals that can control their emotions. Icke had posted on YouTube for more than 14 years.Guillaume Chaslot, a former Google engineer and founder of the research group AlgoTransparency, estimated that Icke’s YouTube channel gained 200,000 subscribers during March and April, when he largely touted unproven theories about the virus. Chaslot's research tracks how often YouTube's recommendation system sends viewers to particular videos and channels. In a 10-year span, YouTube promoted Icke's videos about a billion times.YouTube removed Icke’s account for violating its rules about coronavirus disinformation. Since then, Icke has appeared on other YouTube channels and in YouTube ads for Gaia Inc., a streaming network that promotes yoga and alternative healing. "We have to break out of this perceptual prison," Icke said in a voice-over during an ad that ran weeks after his ban. Gaia's network runs several shows featuring Icke. On a recent earnings call, Gaia executives said YouTube had become a "pretty significant" way to get new subscribers.Gaia didn’t respond to requests for comment. Imran Ahmed, chief executive officer of the Center for Countering Digital Hate, a U.K. nonprofit, argues that social media platforms should remove Icke entirely. “In a pandemic, lies cost lives," said Ahmed. "Misinformed people put us all at risk through their reckless actions.” His group estimated that Icke earned about $177,000 a year from YouTube ads before the ban.Jaymie Icke, a spokesman for Icke's video service Ickonic, said the earnings estimate was inaccurate because YouTube has restricted ads on controversial videos for several years. "Revenue is nothing and has been for a while," said Icke, who is David Icke’s son. "They removed all ads from the channel two months prior to the full deletion anyway. So that figure has simply been made up."Icke and others blocked from the site are allowed to appear on other accounts and in ads as long as those videos don't break rules, according to Muldoon, the Google spokesperson. While web giants like Google have tried to handle conspiracy theories on their user-generated services, they have also tried to reform their ad systems to handle the growing problem. In October 2018, Google and Facebook Inc. signed a European Union code of conduct on disinformation that contained a commitment to “improve the scrutiny of advertisement placements to reduce revenues of the purveyors of disinformation.”According to Fagan, however, the issue remains a blind spot for the companies. Some of the conspiracy websites attract a large number of visitors, promoting their content across social media platforms.The 49 websites promoting Covid-19 conspiracies that were reviewed by the Global Disinformation Index were just a small sample and offer a snapshot of a much larger program, Fagan said. Last year, the Global Disinformation Index published a study of about 20,000 websites promoting disinformation and conspiracy theories. It estimated that they were generating $235 million every year in advertising revenue, approximately $86.7 million of which was paid out by Google.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Workday Inc. reported quarterly revenue that topped $1 billion for the first time, beating analyst estimates and continuing growth for the maker of human resources software despite the economic challenges of the pandemic. Shares rose more than 7% in extended trading.Revenue increased 23% to $1.02 billion in the fiscal first quarter, the Pleasanton, California-based company said Wednesday in a statement. On average, analysts expected $994 million, according to data compiled by Bloomberg. After some expenses, profit was 44 cents a share, compared with analyst projections of 47 cents.Workday expects subscription revenue for the fiscal year of $3.67 billion to $3.69 billion, down from as much as $3.77 billion. In the second quarter, subscription revenue will be as much as $915 million, the company said.Chief Executive Officer Aneel Bhusri has targeted a goal of $10 billion in annual revenue, from $3.6 billion the past fiscal year. The company continues to expand its human resources, accounting and planning software to offer the capabilities of established rivals Oracle Corp. and SAP SE, but delivered through the cloud. Before Workday reported results, some analysts were concerned that corporate customers aren’t interested in pursuing large software deals and complicated implementations during the Covid-19 pandemic.“The cloud is playing a critical role in today’s climate, with organizations leaning on Workday to pivot -- whether it’s helping employees learn virtually, closing books remotely, or scenario planning to determine what path to take,” Bhusri said in the statement.Workday also announced two partnerships Wednesday. One, with Microsoft Corp., will run Workday’s Adaptive Planning on the Azure cloud. Microsoft’s finance team will start using the product for its internal needs and both companies will collaborate on integrating their software products for mutual customers. The second partnership, with Salesforce.com Inc., aims to help organizations safely return to their offices in the wake of the Covid-19 pandemic.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Okta's (OKTA) first-quarter fiscal 2021 results are expected to reflect higher adoption of Identity solutions. However, continued investments in Identity Platform are expected to have kept margin under pressure.
Cloud computing is seeing increasing usage globally as it allows data interoperability in a scalable and cost-efficient way through data collection, processing, analyzing, and sharing across platforms.
Does the May share price for Oracle Corporation (NYSE:ORCL) reflect what it's really worth? Today, we will estimate...
Microsoft (NASDAQ: MSFT) and Oracle (NYSE: ORCL) are both resilient tech stocks that rebounded from ugly market downturns over the past three decades. Microsoft's rally was driven by the expansion of its higher-growth commercial cloud business, which reduced its dependence on its older software products. Oracle attempted a similar turnaround by pivoting from its legacy database software toward cloud services, but it grew at a slower pace than Microsoft.
Ladies and gentlemen, thank you for standing by and welcome to the Rimini Street First Quarter 2020 Earnings Conference Call. On the call with me today is Seth Ravin, our CEO and Stanley Mbugua, our Chief Accounting Officer. Today, we issued our first quarter ended March 31st, 2020 earnings press release, which can be found on our website.
(Bloomberg) -- SAP SE, Europe’s largest software maker, said several of its cloud-computing products do not meet the company’s cybersecurity standards.The vulnerabilities affect 9% of SAP’s 440,000 customers, the Walldorf, Germany-based company said Monday in a statement. It plans to fix the problems in the second quarter to meet contractually agreed or statutory security standards. There are no known breaches or security incidents that have resulted from the shortcomings, which affect products from companies that SAP acquired, including SuccessFactors Inc., Concur Technologies Inc. and Callidus Software Inc.The software giant found similar issues with its C4C/Sales Cloud, Cloud Platform and Analytics Cloud products. The cost of improving the applications is expected to be covered within the range of SAP’s 2020 forecast, according to the company.SAP’s U.S. depository receipts fell 1.4% in extended trading after earlier closing at $117.19 in New York.Read more: SAP Drops Co-CEO Role After Six Months as Virus Upends PlansFor more than a decade, SAP has spent lavishly on cloud-computing companies to help the 48-year-old business keep up with younger firms delivering software over the internet. The company paid more than $3 billion for SuccessFactors in 2012, upwards of $7 billion for Concur in 2014 and more than $2 billion for Callidus in 2018. When absorbing those companies, SAP inherited their infrastructure, and has faced difficulty transitioning some subsidiaries away from using programs from its chief rival Oracle Corp.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- It’s what we all needed to hear: “Nothing can stop America” — Warren Buffett’s way of saying, “We will get through this.” Saturday evenings aren’t normally the ideal time for tuning into a multi-hour investor conference, especially after being cooped up all week working from home due to the Covid-19 pandemic. But mere minutes into the live-streamed Berkshire Hathaway Inc. annual shareholder meeting, it was clear that something much more meaningful was unfolding. Buffett, sitting on a stage in an empty Omaha arena, began with a history lesson like no other — a vivid walk through the other moments in America’s past that tested its resiliency, but never broke it. At 89 years old, he’s lived through many of them.The current crisis “is creating a huge amount of anxiety and changing people's psyche and causing them to somewhat lose their bearings, understandably,” the chairman and CEO of Berkshire told his virtual listeners, while peering out where some 40,000 of them would normally be sitting. “The American magic has always prevailed and it will do so again.”While his unwavering confidence in the U.S. economy is hardly a new theme in Buffett’s lectures, they’re not normally so moving. Like many of those watching, he was in need of a haircut and acknowledged it, adding that he had grown used to wearing sweat suits — as opposed to the real suit and tie he donned on Saturday. It was a humanizing moment. Watching Buffett was like watching Dr. Anthony Fauci or New York Governor Andrew Cuomo, the two government leaders whose comforting words and realism have probably stuck with Americans most during the pandemic and helped to create a sense of hope and community. Even so, going into the event, it wasn’t quite so clear that Buffett still believed in his mantra, “America’s best days lie ahead.” He had been notably quiet in recent weeks, and Berkshire was selling stock and shunning acquisitions, a bearish signal for a company where the ethos is to buy when others are panicking. After all, Buffett once wrote:Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons. And that we will do.Berkshire has done neither, even with $137 billion of cash just sitting there. As such, some say his optimistic outlook doesn’t align with his actions of late. But Buffett explained that the panic hasn’t hit the stock and credit markets to the extent it did during the 2008 financial crisis — or not for as long, thanks to the extraordinary measures taken by the Federal Reserve. His investing during that time “was not designed to make a statement, it was designed to take advantage of what we thought were very attractive terms,” he said. He’s not finding as many enticing investments now, partly because of those Fed actions, which removed the need for many companies to seek a lifeline from a deep-pocketed savior like Buffett.The complicated public-health aspect of this downturn also makes it impossible to predict how long it will carry on or how much worse it will get before it gets better. “The cash position isn’t that huge when I look at worst-case possibilities,” Buffett said Saturday.There are also some industries that may be permanently altered by the coronavirus, such as airlines, Buffett said. Berkshire was a top-three shareholder in American Airlines Group Inc., Delta Air Lines Inc., Southwest Airlines Co. and United Airlines Holdings Inc. as recently as early April. Buffett has since decided to completely exit those positions: “The world changed for airlines and we wish them well.” Even though Buffett is still a believer in the long-term prospects of the U.S. economy as a whole, his 180-degree turn on the airline industry shows that he sees the virus changing at least some consumer behavior for good. That will affect future dealmaking. One of Buffett’s biggest takeovers was Precision Castparts, a supplier of airplane engine parts, which he bought for $37 billion in 2016. It was also his last major transaction. As fascinating as Buffett’s commentary was, the Q&A wasn’t the same without his usual sidekick, Charlie Munger, who is known for his quips and comically curt responses compared to Buffett’s monologues. Munger, Berkshire’s longtime vice chairman, is 96 years old and lives in California. Though he is in good health, Buffett said, it didn’t make sense to have him travel to Omaha — a reminder of both their ages, even if they are as sharp as ever. Instead of Munger, Buffett was joined by Greg Abel, who oversees all non-insurance operations under the Berkshire umbrella and is Buffett’s likely successor. "When I talk to Greg, sometimes I wonder, am I talking to Warren?” Lawrence Cunningham, a professor at George Washington University Law School and author of books on Berkshire, said during the meeting pre-show. It may be a while before others see him that way. While Abel answered some questions Saturday, he mostly deferred to Buffett and stuck to high-level corporate-speak. Buffett, who recently joked that his age puts him “in the urgent zone,” did have a message for whoever does replace him: “I will bet on America the rest of my life, and I hope my successors at Berkshire do.”He closed the evening with a smile and a laugh: “We’ll see you next year and we’ll fill this place!” Let’s hope. But if it turns out that this virtual event was the Oracle’s last time as the master of ceremonies, it will stand as a fascinating and beautiful sermon that will be remembered. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Three female employees at Oracle Corp. scored a major victory in court, gaining the right to represent thousands of others in a gender-discrimination lawsuit over pay, a legal milestone that has eluded women at other tech titans.A California state judge certified the class action Thursday, allowing the lawsuit to advance on behalf of more than 4,000 women who claim the database giant pays men more for doing the same job.“Whether the jobs at issue in this case are substantially equal or similar is a question of fact for a jury,” California Superior Court Judge V. Raymond Swope in Redwood City said in the 25-page ruling, rejecting Oracle’s claim that each is an individual case because people in the same job code don’t perform substantially similar work.“This is just a procedural step unrelated to the merits of the case and we look forward to trying those in court,” Oracle said Friday in an email.The ruling gives the women critical leverage in pursuing the case under the state’s Equal Pay Act.“This case will help ensure that women are paid fairly at Oracle, and we hope, throughout the tech industry,” Jim Finberg, a lawyer representing the women, said in an email.Women at technology companies who have turned to the courts to transform their pay and treatment in the workplace have faced difficulty gaining traction, just like their female counterparts in more traditional industries, from retail to finance. The U.S. Supreme Court set a high bar in its 2011 decision that blocked 1.5 million female workers at Walmart Inc. from pursuing their discrimination claims as a group. Female engineers at both Twitter Inc. and Microsoft Corp. failed to persuade judges to let their gender-bias cases proceed as class actions and those rulings were upheld on appeal.”Courts seem hesitant to certify classes alleging gender discrimination more broadly,” said Jason Lohr, a lawyer who has filed such suits. “Fortunately, the California legislature has made it easier to bring class-wide claims based upon pay disparities. While not a perfect way to resolve gender inequality in the workplace, it’s progress.”Why So Few Women Break Through Tech’s Bro Culture: QuickTake Q&AUber Technologies Inc. paid $10 million in 2018 to settle pay discrimination and harassment claims brought on behalf of more than 400 female and minority engineers. Google is fighting another suit filed under California’s Equal Pay Act -- one of the strongest measures of its kind nationwide. That case may be the next battle over class-action status.The case against Oracle was filed by former company engineer Sue Petersen and two other women, all of whom worked at PeopleSoft Corp. before it was acquired by Oracle in 2005.They claim that Oracle for years has paid women less than men for “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.” To bolster their bid for class-action status, the plaintiffs emphasized that company-wide compensation is determined at Oracle’s headquarters in Redwood Shores, California.Oracle argued that the lawsuit wrongly compares women and men tagged with the same job codes even though such coding doesn’t mean the work requires similar skills, effort or responsibility, because Oracle’s products and services vary so widely.Relying on the codes doesn’t “account for the tools or programming languages an employee must master, the hours her work requires, or the number and complexity of the sub-areas of a product for which she is responsible,” the company said in a court filing.In a separate ruling, Swope dealt Oracle another blow when he refused to toss out a study, commissioned by the plaintiffs, that found women at the company earned 13% less than their male counterparts. The study was done by a UC-Irvine economics professor David Neumark.“Professor Neumark had a reasonable basis for his opinions that education, years of prior job experience, tenure at Oracle, and performance review scores do not explain the gender pay gap faced by women in the same job code as men,” the judge wrote.Oracle is also fighting a complaint over gender-pay disparities brought by the U.S. Labor Department in the waning days of the Obama administration. The agency claims the company owes women and minorities $400 million in what it says is “the biggest enforcement case” it’s ever brought against a federal contractor.The case is Jewett v. Oracle America Inc., 17-CIV-02669, California Superior Court, County of San Mateo (Redwood City).(Updates with company comment in fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Warren Buffett will address his followers on Saturday for the first time since the U.S. began implementing the state-by-state lockdowns that have upended the economy and life as we knew it. Technically, it’s the annual Berkshire Hathaway Inc. shareholder meeting, though much will be missing from this year’s event — people, for starters. Even so, the main draw of the weekend lives on: the chance to pick one of the most brilliant brains in business.In a live-streamed interview that evening, Buffett will answer questions submitted by investors, including presumably how the conglomerate’s various lines of business have been affected by the pandemic. But what listeners are really tuning in for are the Oracle of Omaha’s broader views on the world during a time like this. Here are five questions for him:1\. Is it time to name a successor?Or has he essentially done so? For the first time, Buffett is doing the Q&A jointly with Greg Abel, a Berkshire vice chairman, rather than his usual sidekick, Charlie Munger, who is 96 years old and resides in California. Buffett, who will turn 90 in August, even joked in his February letter to shareholders that he and Munger are in “the urgent zone.” All signs point to Abel being the next CEO of Berkshire, but Buffett hasn’t spelled out the succession plan yet. It was going to be hard enough for shareholders to get comfortable with anyone other than him someday being the steward of their money. With all the uncertainty caused by the pandemic, now is a good time for Buffett to clarify why Abel is best suited to manage the conglomerate, even through a crisis like this.2\. Could the concept of a “new normal” alter what kinds of investments Berkshire makes in the future?If Buffett isn’t using his enforced isolation at home to hunt for another elephant-sized acquisition, is that because the Covid-19 shutdowns are causing him to reevaluate what types of businesses will recover? Or is he perhaps grappling with the potential for long-term changes in customer behavior? Taking a stake in the Kroger Co. supermarket chain late last year proved to be prescient; buying preferred stock in oil producer Occidental Petroleum Corp. not so much. Those circumstances would still seem to be temporary. Air travel, on the other hand, is an example of an industry where a return to normal could take awhile — or never even come. 3\. Will the airline industry ever rebound? Buffett has a tormented history with airlines. After getting burned once by a US Airways investment, Buffett swore off the industry in 2001, saying: “Now if I get the urge to invest in airlines, I call an 800 number and I say: Hello, my name is Warren, and I'm an air-o-holic.” Well, Buffett apparently lost that number and went all in on airline stocks in 2016. Berkshire is now the largest shareholder of Delta Air Lines Inc., the second-largest owner of United Airlines Holdings Inc. and Southwest Airlines Co., and has the third-biggest stake in American Airlines Group Inc. They’ve all plunged this year as the pandemic wreaked havoc on air travel — or any travel at all.On March 10, during a Yahoo Finance interview, Buffett said he “won’t be selling airline stocks.” That was before the shutdowns. A few weeks later, Berkshire reduced its Delta and Southwest positions, although it’s still the No. 1 and No. 2 investor in each. An update on his thinking would be especially illuminating now.4\. Covid-19 has forced the nation to reassess and recognize what it means to be an “essential” worker. Does that warrant new ideas for solving wealth inequality? Buffett himself employs a lot of essential workers: They’re manning freight trains that are still pushing goods around the country, as well as manufacturing Duracell batteries. Lubrizol — which makes chemicals used for everything from coating car interiors to yoga pants — has helped to produce hand sanitizer, while Fruit of the Loom switched to making protective face masks. Berkshire is also the largest shareholder of food giant Kraft Heinz Co., one company helping to keep supermarkets stocked. In that same March interview, Buffett discussed the wealth gap, saying it’s a reflection of the fact that workers are rewarded based on the skills that are valued by the market:You get this pushing of extreme rewards to people who are very, very good at something the market demands. And people demand entertainment. They demand people apparently that arbitrage securities. There's certain specialties.But they demand lots of basic things, too, as this pandemic has shown.Even though Buffett agrees with letting the system function the way it does, “we don’t want people left behind,” he said. The billionaire has often advocated for an expansion of the Earned Income Tax Credit as a better way of putting more money in the pockets of low-income families than through hiking the minimum wage. That’s because the latter could backfire by increasing unemployment. The EITC just doesn’t have the same ring to it as $15, and it’s not as easily understood as earning more per hour. Buffett has also called for higher taxes on the ultra-wealthy, like himself. 5\. Do America’s best days still lie ahead?Buffett has seen his share of crises, and they’ve never seemed to shake his optimism that the U.S. will continue to prosper in the long run. “America’s best days lie ahead,” is a mantra he often repeats in his annual letters to shareholders. But Buffett has been unusually quiet during the pandemic — in terms of a lack of both TV appearances (perhaps due to virus fears) and deal activity. Investors could use a reminder of how the country’s biggest cheerleader and hungriest dealmaker feels about its long-term prospects. Is it possible they are changing? This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Zoom said it tapped Oracle for its cloud needs because it stood out in its ability to meet all the demand the company has experienced.
With the company growing in leaps and bounds, Zoom went shopping for a new cloud infrastructure vendor to help it with its growing scale problem. In a surprising choice, the company went with Oracle Cloud Infrastructure as its latest partner. What's surprising is that it chose Oracle, a company whose infrastructure market share registers as a strong niche player in Synergy Research's latest survey in February.
As corporations and schools shift to remote work and billions of people subject to stay-at-home orders seek ways to remain connected, Zoom has seen daily meeting participants rocket from 10 million in December to 300 million. Zoom set out a 90-day plan to fix the security issues, but in the meantime, the thirty-fold jump in traffic has required more computing power. The deal is a big win for Oracle, which wants to catch up with rivals such as Amazon.com <AMZN.O> and Microsoft <MSFT.O> that have greater market share, and is selling a new generation of cloud technology after its first generation efforts failed to gain traction.
(Bloomberg) -- SAP SE’s abrupt decision to scrap its co-CEO leadership structure was another vivid example from the software industry that two chief executive officers look better on paper than in practice.SAP became the third of its peers to abandon the dual-CEO model, just six months after returning to the structure with the appointments of Jennifer Morgan and Christian Klein. The rationale at the time was that Morgan would remain in the U.S. and play a prominent role overseeing the German technology giant’s extensive American operations. Klein would be based at headquarters. Both young executives would help fill the shoes of departing CEO Bill McDermott, a charismatic American who led the company for a decade.But time and the novel coronavirus pandemic exposed the risks of having more than one boss: Two executives must sign off on decisions, which often slows operations and generates competing spheres of influence within an organization. SAP’s late Monday announcement that Morgan would depart at the end of April followed similar decisions by Oracle Corp. and Salesforce.com Inc., software makers that experimented with twin leaders before returning in the past six months to a sole CEO.“Two heads are not better than one,” said Charles Elson, the director of the John L. Weinberg Center for Corporate Governance at the University of Delaware. “When you have two CEOs, there are inevitable clashes between the two. One will dominate and the other has to go. They always end up with one person being CEO.”Over the past two decades, companies as different as Citigroup Inc. and BlackBerry have attempted to share power between co-CEOs, only to drop the effort after little success.“When times are good, it’s easier to be more relaxed — take a little longer, hold a little more conversation before decisions,” Mark Moerdler, an analyst at Bernstein, said. “When times are more difficult, that’s where you need to be able to make a cohesive decision. If the two of them at SAP couldn’t make decisions together, obviously that was a failure.”The two-CEO structure only works well if there’s a clear division of labor and the participants are determined to share power, analysts say.Salesforce saw its co-CEO structure unravel within 18 months. In February, the San Francisco-based company said Keith Block had stepped down from his post as co-CEO for a vague new chapter, but would advise company co-founder Marc Benioff, co-CEO at the time with Block. The company was explicit that Block wouldn’t be replaced and Benioff would go back to being the lone CEO.“In Keith and Marc, Keith was a very strong person, Marc is a very strong person,” Moerdler said. “While Keith was more operational than Marc, there was still a significant overlap in responsibilities. You start seeing strong people being unhappy sharing power.”The longest a large tech company has lasted with two CEOs recently is five years, at SAP early in McDermott’s tenure, and at Oracle. Safra Catz and Mark Hurd began sharing the Oracle CEO title in 2014, with Catz focused on finances and Hurd acting as chief salesman. Both made decisions in concert with Oracle co-founder Larry Ellison, who remained an engaged executive chairman. Elson said the arrangement lasted because Ellison ran the show and the pair were, in reality, sharing the No. 2 role, as they had for the previous four years as co-presidents.“Safra and Mark worked fine because they had two different skill sets altogether,” said Anurag Rana, an analyst at Bloomberg Intelligence.Companies often consider two CEOs because they fear no one person has all of the talent or energy to run the show. Large companies need a strong financial expert who knows where every dollar goes, an operational person who leads the workforce and an enthusiastic public face for customers and others, Moerdler said.There’s no reason you can’t appoint two people as CEO “if you are mixing the responsibilities,” he said.But the model is often a compromise made to appease different constituencies within a company. And when conditions aren’t ideal -- personalities clash, crises arise -- companies change course.When Hurd died in October, Oracle opted to keep Catz as the sole CEO rather than find her a new partner in the post. SAP, meanwhile, has gone back and forth between co-CEOs and having a single person in charge.“Nothing ever changes at SAP and Oracle,” Rana said. “They are stagnant companies. They have massive support bases. They can experiment with new executives and still do all right.”SAP hasn’t ruled out another flip-flop after the Covid-19 pandemic.“I have always believed that co-CEO models have their place and their time; after all, I was a co-CEO once,” SAP Chairman and co-founder Hasso Plattner said in a memo to staff. “But this has turned out to not be that time. Therefore, for the benefit of our company and our customers, we felt it was crucial to have one sole CEO navigate us through this unprecedented change.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
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(Bloomberg) -- The Defense Department’s watchdog found no evidence that the Pentagon’s controversial decision to award a $10 billion cloud-computing contract to Microsoft Corp. was the result of interference from President Donald Trump, though it said its probe was limited by the White House.The 317-page report issued Wednesday by the inspector general’s office also found that giving the JEDI contract to a single company -- Microsoft -- rather than dividing it among competitors was “consistent with applicable acquisition standards.”While the Joint Enterprise Defense Infrastructure project was hotly disputed by rival technology companies from the start, the project gained broader attention when Trump publicly expressed concern about the assumption that the contract would go to Amazon.com Inc.After Microsoft was given the award instead, Amazon Web Services, Amazon’s cloud services unit, filed a lawsuit alleging that political interference by Trump cost the company the cloud deal. Amazon said in the suit that the Defense Department failed to fairly judge its bid because Trump viewed Amazon Chief Executive Officer Jeff Bezos as his “political enemy.”In its report, the inspector general’s office said, “We believe the evidence we received showed that the DoD personnel who evaluated the contract proposals and awarded Microsoft the JEDI Cloud contract were not pressured regarding their decision on the award of the contract by any DoD leaders more senior to them, who may have communicated with the White House.”But the report also said the White House limited cooperation with the inquiry. The inspector general said the assertion of a “presidential communications privilege” resulted in the Defense Department general counsel instructing officials “not to answer our questions about potential communications between White House and DoD officials about JEDI.”Claiming VindicationWhile Amazon’s lawsuit is still in the courts, the Defense Department declared vindication from the inspector general’s findings.“This report should finally close the door on the media and corporate-driven attacks on the career procurement officials who have been working tirelessly to get the much needed JEDI cloud computing environment into the hands of our front-line warfighters while continuing to protect American taxpayers,” Lieutenant Colonel Robert Carver, a Pentagon spokesman, said in a statement.Microsoft spokesman Frank Shaw said in a statement that the “report makes clear the DoD established a proper procurement process.”Jon Palmer, deputy general counsel for Redmond, Washington-based Microsoft, said in a blog post that Amazon “bid high and lost. Should Amazon be allowed a do-over on JEDI?”Amazon spokesman Drew Herdener said in a statement on Wednesday night that the inspector general’s findings say “nothing about the merits of the award, which we know are highly questionable.”Amazon has asked the U.S Court of Federal Claims to require that the Pentagon to broaden the scope of a reevaluation that the government requested after a judge said the Defense Department might have misjudged part of Microsoft’s pricing proposal for the work.But the Project on Government Oversight, an advocacy group, said the inspector general’s findings underscore that the JEDI award was riddled with ethical problems and the appearance of improper influence by Trump.“Add to that the White House’s inappropriate refusal to participate in the inspector general’s investigation, and we have a $10 billion mess on our hands,” Scott Amey, the group’s general counsel, said in a statement.The Pentagon has said that JEDI, with its acronym inspired by “Star Wars,” is intended to help bring American military technology into the modern era. The Defense Department is investing in commercial cloud services, which host computing power and storage in remote data centers, to improve data security and speed up real-time sharing of information across the military. The contract is valued at as much as $10 billion.The inspector general examined dueling allegations of misconduct surrounding complaints that former employees with ties to Amazon may have structured the deal to favor the company, as well as the assertion that Amazon lost out because of Trump’s antipathy toward Bezos, who also owns the Washington Post.Amazon’s lawsuit cites a book by Guy Snodgrass, a speechwriter to former Defense Secretary Jim Mattis, who alleges that Trump told Mattis in 2018 to “screw Amazon” and lock it out of the bid. Mattis didn’t do what Trump asked, Snodgrass wrote.The inspector general’s office said Mattis couldn’t recall whether Trump made that comment, but he said “I knew his dissatisfaction with Amazon. I mean I knew that loud and clear.” Mattis also told the watchdog that the book by Snodgrass was “full of inaccuracies.”Oracle’s AccusationsThe Pentagon inspector general’s office also examined allegations, surfaced by Oracle Corp. in a lawsuit challenging the terms of the contract solicitation. Oracle said the bid was tailor-made for Amazon and was fatally tainted by conflicts of interest between the Defense Department and the e-commerce giant.At least two former Defense Department employees were offered jobs at Amazon while working on the contract, according to the lawsuit. Oracle is appealing a July ruling from the U.S. Court of Federal Claims that dismissed its legal challenge to the cloud contract.In one case, the inspector general concluded that Deap Ubhi -- a former Amazon employee who soon went back to the company -- violated procurement regulations through his “false statements and his failure to disclose his employment negotiations and job acceptance with Amazon.”But the watchdog added that Ubhi’s “minimal and limited contributions were largely discarded and did not affect the conduct or outcome of the JEDI Cloud procurement.” Ubhi didn’t immediately respond to an emailed request for comment.The inspector general also concluded that Stacy Cummings, a deputy assistant secretary of defense, violated ethics requirements when she participated in a matter related to the procurement while owning stock in Microsoft valued between $15,001 and $50,000 but that her participation didn’t influence the decision. Cummings couldn’t immediately be reached for comment.The Pentagon watchdog cleared two other former Defense Department officials -- Sally Donnelly, a former top aide to Mattis, and Anthony DeMartino, who also worked in the defense secretary’s office -- of misconduct. Both had consulted for Amazon before working at the Defense Department.(Updates with Amazon statement, in 11th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Amazon is challenging the Pentagon’s awarding of the $10 billion JEDI cloud contract to Microsoft, alleging Trump’s animus for Amazon caused Pentagon officials, “consciously or subconsciously,” to award the contract to Microsoft.