From his love of the Cheesecake Factory to his take on religion, writer Jim McLauchlin looks back on two decades of conversations with the Marvel Comics chairman emeritus.
At least, it is if you’re in Pilobolus, a dance company that specializes in shadowy illusions.
French startup BlaBlaCar is announcing plans to acquire Ouibus, the bus division of France’s national railway company SNCF. For the first time, BlaBlaCar is moving beyond carpooling and plans to offer both long-distance carpooling rides and bus rides.
BlaBlaCar already ran a test with Ouibus for the past six months on popular corridors. It looks like both companies are happy with this test, as SNCF is willing to let BlaBlaCar run Ouibus from now on.
As part of this deal, BlaBlaCar is announcing a new $114 million investment (€101 million) from SNCF and existing BlaBlaCar investors. I’d guess that this isn’t just cash but probably cash and shares as part of the move with SNCF. Yes, you read that correctly, SNCF is now an investor in BlaBlaCar.
Ouibus has transported more than 12 million passengers over the past few years in France and Europe. Many thought that buses would hurt BlaBlaCar over the long run. By offering buses on BlaBlaCar directly, the company can capitalize on its brand and huge community to counter that trend. BlaBlaCar is now a marketplace for road travel.
BlaBlaCar is taking a risk, as Ouibus has been relentlessly losing money. Just like other bus companies, Ouibus relies heavily on contractors, which means that BlaBlaCar could quickly adjust the offering. It’ll also depend on product integrations on BlaBlaCar, OUI.sncf and other platforms.
BlaBlaCar currently has 65 million users in 22 countries and is about to reach profitability. And you can expect to find ridesharing offers on OUI.sncf in the coming months.
Black Friday may still be 10 days away, but shopping season started early in the enterprise this year. We have seen acquisitions totaling almost $50 billion in the last couple of months alone, topped by the mega $34 billion IBM-Red Hat deal two weeks ago. What exactly is going on here?
While not every deal has been for that kind of money, we are seeing an unusually large number of mega deals this year, something that some folks were predicting would happen when the big tech companies were allowed to repatriate their money as part of last year’s tax deal.
Let’s look at some of the multi-billion deals we have seen so far this year:
- Salesforce bought MuleSoft in March for $6.5 billion
- Adobe bought Magento in May for $1.68 billion
- Microsoft bought GitHub in June for $7.5 billion
- Cisco bought Duo Security in August for $2.3 billion
- Adobe bought Marketo in September for $4.75 billion
- SAP bought Qualtrics last night for $8 billion
- Vista Equity Partners bought Apptio last night for $1.94 billion
Supply and demand
Big companies are opening their checkbooks in a big way right now, buying everything from marketing to analytics to security companies. They are grabbing open source and proprietary. They are looking at ways to bridge the cloud and on-prem. There is a whole host of software and not much rhyme or reason across the deals.
What they have in common is that they are enormous offers that are simply too huge to refuse. These companies flush with cash see opportunities to fill holes, and they are going for one piece after another.
One of the reasons the prices are going so high is that there is a limited number of companies available to buy, and that is driving up the price, says Ray Wang, founder and principal analyst at Constellation Research. As he sees it, there are only 3-5 decent players per category right now. He compares that with 10 years ago when we were seeing 10-15 players per category. With a limited number of viable startups, companies seem to be going after these companies harder. Combine that with fat wallets full of cash, and you suddenly have this wave of super-sized deals.
The companies being acquired by large organizations can justify selling in the usual ways. They can reward shareholders and investors. These larger organizations allow them to push their product roadmaps much more quickly than they could on their own. They give them access to international markets and mega sales teams.
Buy versus build
Still, companies have been spending unusually large sums for relatively small amounts of revenue. In deals over the last three weeks, we have seen IBM pay $34 billion for a company with around $3 billion in revenue. We saw SAP paying $8 billion for a mere $400 million in revenue.
This certainly seems on its face to be a massive overpay, but Constellation’s Wang says ultimately this often comes down to a classic build versus buy decision. SAP could build a similar product to Qualtrics, or they could simply buy it and put the massive SAP salesforce to bear on it. “SAP can sell into 100,000 customers. They only have a 10 percent overlap with Qualtrics. The numbers work, and it beats taking a new product to market,” Wang told TechCrunch.
Wang believes this could be the strategy behind many of these acquisitions, while admitting that the numbers sound a bit crazy. As he says, the formula used to be three times, three years trailing revenues. Now it’s 15-20 times. While those may be hard numbers to justify, he believes it’s a win-win for buyer and acquired — and investors win big too, of course.
Staying the course
In many instances like Red Hat, GitHub and Qualtrics, the companies will likely remain separate, independent units inside the larger organization, at least for the time being, while looking for meaningful crossover inside the larger company when it makes sense.
But Tony Byrne, founder and principal analyst at Real Story Group, says these large companies tend to listen to Wall Street, and customers should be wary of what they hear when it comes to their favorite products and services. “You cannot trust the initial pleasantries about continuity that come out of the first press release. These are huge vendors that listen first and foremost to Wall Street. If there’s an offering that doesn’t totally align with their story to investors, it is not going to get much love and is at risk for getting eliminated or calved off,” Byrne explained.
It’s also hard to know how well two companies are going to fit together until the deal actually closes. Sometimes the acquiring company doesn’t know what they have or how to sell it. Sometimes the two companies don’t fit well together or the founders or key executives don’t fit smoothly into the new hierarchy. They try to figure this all out beforehand, but it’s not always easy to know how it will play out in reality.
Regardless, we are seeing an unusually high level of massive acquisitions, and chances are, there are more coming.
Tel Aviv-based Audioburst has been developing a search engine for audio news, which allows users to locate audio content within podcasts and other talk radio programs. Today, the company is capitalizing on its technology to launch personalized playlists that deliver custom news briefs that get better over time the more you use the product.
The feature has been built using deep AI learning, the company says.
The content itself is drawn from top podcasts and the radio stations in Audioburst’s index, and will alert you to new information based on your chosen keywords and topics.
To use the feature, you first sign up on the Audioburst website, then select from a set of interests or add your own. When you’re finished with the selection process, you just hit the “I’m done” button to be taken to your personalized playlist of audio clips.
The end result is being able to listen to the parts of the podcasts or other audio programs you would actually care about, rather than slogging through half an hour or more of chatter for the one tidbit of news you were interested in.
For example, when testing the feature this morning, I chose a variety of topics like “tech news,” “movies,” “entertainment,” “science,” “parenting” and more, and was delivered a set of audio clips that included a discussion of Disney’s “Star Wars” spin-off series starring Diego Luna; a chat about the 2018 MacBook Air overhaul; an assessment of the smog in L.A.; and a lot of other clips I chose to skip (but will hopefully train the AI further).
You can try the feature yourself at search.audioburst.com by clicking on “Personalized Playlist” in the top left.
The results were hit or miss, which is expected — to some extent — fresh out of the gate. But there were also times when the clips didn’t actually serve up too much information. That is, you’d still need to turn to the podcast itself for the full story.
However, the feature itself isn’t necessarily going to be used by consumers directly on Audioburst’s website. Instead, its development came about thanks to requests from partners using its API.
The company says you can expect to see the personalized playlists integrated into its partners’ products in the smart speaker, mobile, in-car infotainment, and wearable tech spaces in 2019.
Audioburst currently has partnerships with ByteDance, Nippon, Bose, Harman, Samsung and more.
Berlin-based photographer Lena Kunz set out to chronicle the world of meticulously crafted baby dolls and the people who love them.
Some consolidation and subsequent divestment are in play in the worlds of imaging and voice recognition. Today, Kofax and Nuance announced that Kofax would be acquiring Nuance’s imaging division, for $400 million in cash. The deal, which had been rumoured in recent days, is expected to close in Q1 2019.
The acquisition is a notable move for Kofax — itself acquired by Thoma Bravo last year in a $1.5 billion deal — as it continues to build up its business in Robotic Process Automation (RPA), the area of enterprise IT services that uses machine learning, computer vision and other AI-based tools to bring automation to repetitive or mundane back-office tasks that would have in the past been done by humans. (The idea is that this frees up the humans to make more sophisticated assessments in specific cases, or focus on entirely different tasks.)
On the side of Nuance, the company is a leader in voice recognition services that served as an early partner to the likes of Apple with Siri, and has also worked on a number of other AI-based solutions to improve how enterprises build services and work.
Publicly traded Nuance’s imaging division accounted for about 11 percent of its revenues last year, and it has stated would be making several changes in its business to rationalise it and focus on more profitable operations. The biggest parts of its $5 billion business today are healthcare solutions, enterprise and automotive.
Kofax is bringing on Nuance Document Imaging, as the division is officially called, specifically to bring more services in the area of imaging services, which include services like providing security and compliance around any image scanning or printing that takes place across an organization. NDI, Kofax said, is one of the biggest companies of its kind in the field, covering 6 million knowledge workers and over 100,000 active deployments of its Print Management solutions.
“Through the acquisition of Nuance’s document imaging division, Kofax will drive customer value by adding key technologies, including cloud compatibility, scan-to-archive, scan-to-workflow, print management and document security, to our end-to-end Intelligent Automation platform,” said Reynolds C. Bish, Chief Executive Officer of Kofax. “In addition we will now be able to combine the best capture and print management capabilities available in the market into one product portfolio.”
Kofax said this makes it the leader in this area globally: and indeed it is racing to keep ahead of competition.
RPA has been one of the fastest-growing areas in IT, fueled by the rising interest in bringing more AI into enterprise services. UiPath, one of the leading startups in the space, has raised close to $400 million in two separate rounds this year on the back of its rapid growth. Just last week, UiPath just last week expanded its own imaging capabilities.