Dell Loses Its First Senior Executive Since the Buyout

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Now that computing company Dell has completed its $25 billion leveraged buyout, the first member of the company’s senior executive team is headed for the door.

Sources familiar with the matter have confirmed to AllThingsD that Steve Felice, a Dell president and its chief commercial officer, will be leaving the company. His final day at Dell’s Round Rock, Texas, headquarters will be in early December.

Felice has taken a job as Chairman and CEO of Filtration Group, a Chicago-based privately held company that makes industrial air and water filtration equipment. The announcement was made in an internal memo to Dell employees, but hasn’t been made public yet. He’ll start at his new job on Jan. 6.

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I’m told Felice has a professional bucket list and one of the things on it is to be CEO of a big company. So he’s leaving under his own steam. I haven’t seen the internal memo yet, but I’m told it contains some quotes from CEO Michael Dell about how Felice was an important member of the executive team.

Felice is a serious Dell veteran. He joined the company back in 1999 when the PC business was humming and Dell was the company giving the entire industry competitive fits. I interviewed him last year, a few months before the whole buyout saga began.

Felice had been vice president and then later president of Dell’s consumer, small and medium business group, and at one time also led its operations in Asia. He joined Dell from DecisionOne, a computer support services vendor, where he had been CEO. He was a VP at Bell Atlantic (now Verizon) and also worked at Shell Oil.

It’s not uncommon for executives to leave a company after a buyout transition like the one Dell just went through. Several members of the executive team, though, such as enterprise head Marius Haas and software chief John Swainson, are pretty new and are unlikely to be going anywhere soon.

Update: I just got this statement from Dell.

As Dell begins a new chapter as a private company, Steve made a personal decision to take on the new challenge of leading a company as CEO.

Michael Dell said that Steve’s “counsel, vision and insight will definitely be missed by me and the entire leadership team, and I will always be grateful for his contributions.”

Michael Dell Is “At Peace” With Whatever His Shareholders Decide

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Asa Mathat | D: All Things Digital

Michael Dell made what reads like his final appeal to shareholders of the computing company that bears his name, seeking their approval of a $24.6 billion leveraged buyout he has proposed with the private equity firm Silver Lake.

“The decision is now yours. I am at peace either way and I will honor your decision,” Dell wrote in an open letter filed with the U.S. Securities and Exchange Commission early this morning.

The letter came after a day of significant developments in the ongoing drama surrounding the fate of what was once the world’s largest supplier of personal computers. Dell and Silver Lake raised their bid by a dime to $13.75 a share in the hope of convincing the company’s board to change some of the rules governing the shareholder vote. Naturally, that didn’t sit well with Carl Icahn, the activist investor stalking the company with a competing shareholder proposal of his own. He resorted to writing verse on Twitter to make his case.

Without mentioning him by name, Dell criticized some of the proposals floated by Icahn, including the sale of assets and a leveraged recapitalization, saying they would be “destructive to the company.” Should the buyout be rejected by shareholders, he said he won’t support any of Icahn’s proposals. Dell remains the company’s largest single shareholder, with about 14 percent to 15 percent of the shares outstanding.

Dell also reiterated the case he and Silver Lake made in a joint letter yesterday, saying the “non-vote-equals-no-vote” provision of the shareholder vote process is unfair. “Currently, over 25 percent of the unaffiliated shares have not voted,” he wrote. “This means that even if a majority of the unaffiliated shares that vote on the transaction want to accept our offer, the will of the majority may be defeated by the shares that do not vote. I think this is clearly unfair.”

The special committee of Dell’s board hasn’t yet formally responded to the latest offer.

Dell’s full letter is below:

Dear Fellow Shareholders,

You have undoubtedly read many stories about our efforts to take Dell private. I wanted you to hear directly from me.

I believe that taking Dell private is the right thing to do for the company. We need to transform, and we need to do it quickly. The transformation is not without risks and challenges, and I believe that we can do what we need to do better as a private company than a public company.

When I came to the Dell board last August to ask if the board would consider the possibility of a going private transaction, I understood that the independent directors would control the process, and I made clear that I was ready to partner with whoever would pay the highest price. I encouraged every interested party to pay the highest price they could.

After one of the most thorough processes in history, the highest price that any of the parties was willing to pay was $13.65 per share. Although no other party has offered to pay more than $13.65 per share, Silver Lake and I have now increased our offer to $13.75 per share, an increase to public shareholders of approximately $150 million, which is our best and final offer.

I believe this offer is in the best interests of the company and our shareholders. Certain other parties have been proposing alternatives such as leveraged recapitalizations, sales of assets and other steps that I believe would be destructive to the company and that I do not and will not support.

The decision is now yours. I am at peace either way and I will honor your decision. Our agreement requires the vote of a majority of the unaffiliated shares – your shares – to approve the transaction. Unfortunately, our agreement also provides that shares that do not vote count as votes against the transaction.

Currently, over 25 percent of the unaffiliated shares have not voted. This means that even if a majority of the unaffiliated shares that vote on the transaction want to accept our offer, the will of the majority may be defeated by the shares that do not vote. I think this is clearly unfair.

When we offered to increase our bid to $13.75 per share, we also asked the Special Committee of the Board to change this unfair vote standard and allow the will of the majority of the unaffiliated shares that vote on the transaction to control the outcome.

Particularly given the efforts of others to promote alternative transactions, and the ability of those parties to vote their shares when my shares do not count, it makes no sense whatsoever to skew the playing field even further by counting shares not voting as if they supported the opposition group.

If the Special Committee agrees to our increased bid of $13.75 per share, and agrees to create a fair and level playing field in which you can decide, I will look forward to your decision.

Sincerely,
Michael S. Dell

Apigee Launches Purchase-To-Payment API Platform

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Apigee has a new platform for customers to manage API-driven business efforts that extends from purchase-to-payment of digital assets. The service is meant for organizations, such as telecommunications providers, that sell services delivered through an API.

Apigee has designed the platform so a customer can get help with pricing, notifications set-up and limits that tell when a number of products have been sold. It comes with an administration platform and developer platform for billing. Licensed on a yearly basis, the platform is available both in the cloud and on-premise.

The communication through the API monetization platform is two-way. For example, telecommunications customers have often had to send email notifications when there was a change to a rate plan for one of its digital services. With the new platform, the service is automated so a customer can set up notifications for the developer subscribing to the plan.

The issue extends to the finance department with API providers historically collecting money by invoice from developers. With the platform integration, a bill gets automatically sent to the customer with real-time credits and deductions to the developer’s account without having to invoice.

In the overall market, there are companies that are digital native and those that do not have the background with APIs. Apigee is trying to serve both markets. They are offering easier API integration for the more seasoned customers and the expertise to show how the service can be offered and managed for the clients newer to the ways of the API economy.

APIs are becoming part of the mainstream business world. Until most recently, APIs have primarily been viewed as a way to connect apps. But they are increasingly used as a gateway for customers to sell services. This is evident in how they are getting baked deeper into enterprise systems. Intel acquired Mashery for $180 million this spring to offer the API platform to serve as a way to connect back-end systems to the cloud.

In essence Apigee is offering its customers a deeper way to automate the selling process and subsequent management of a customer’s digital assets. That’s something we can expect to see more often as APIs move deeper into the mainstream business world.

Disclosure: Apigee’s Sam Ramji needed a place to stay while here in Portland this week for OSCON so he bunked at our house.

The Matrix Of Hell And Two Open-Source Projects For The Emerging Agnostic Cloud

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Docker, an app container service from the co-founder at DotCloud, and Salt, an open DevOps platform from the founder of SaltStack, were mentioned this past week at OSCON as two of the most exciting new open-source efforts.

Complexity comes with the cloud and its fit with enterprise data centers. The Docker team calls this new world of services and devices the matrix of hell. The Salt folks see salvation in speed – perhaps to save us all from the hell that comes with heavyweight systems that require extensive resources and are slow due to being built when distributed systems were not as common as they are today.

Both projects are tied to the deeper complexity that comes now with what new DotCloud CEO Ben Golub and Co-Founder Solomon Hykes describe as a world that resembles a matrix, represented by rows of endless number of available services and columns that represent any number of devices where applications run. DotCloud supports the Docker open-source project.

Their emergence also represents the new reality about what can be described as the “agnostic cloud.” Sure, there’s a belief structure about cloud but there is no almighty allegiance to its power. Instead, there is an agnostic movement to make on-premise and cloud services accessible through a universe of providers and open-source services that run anywhere – be it a private data center or a public cloud service.

Docker

Docker automates the deployment of apps as a lightweight Linux container. The container can be built and tested on a laptop and synced to run anywhere. It can run on virtual machines, bare-metal servers, OpenStack clusters, public instances or any combination of on-premise and cloud offerings.

Docker does not port the virtual machine nor the operating system, which makes sense when considering that the infrastructure itself is becoming the operating system. The compute, storage and networking is already in place on a cloud service – the application just goes there to run.

The service avoids the issue that comes with moving virtual machines, which are not designed to move between clouds. So instead of moving the VM, Docker moves the code between the VMs. Most of the security is managed by the Linux kernel.

Hykes said in an interview last week that developers particularly like the capabilities to continually test and integrate app containers. This makes for simpler and faster methods for building applications that can run anywhere. For example, developers are using Docker to build next-generation platform as a service (PaaS) offerings. It’s a noteworthy development. Most PaaS providers have historically provided monolithic platforms to do as much as possible. With Docker, platforms can be built that leverage the services of different providers to create lightweight environments for building and delivering apps.

For more technical descriptions about Docker, there are some good resources here, here and here.

Salt

Salt is a new open DevOps platform built for speed. It is designed to use generic high-speed communication to move data out to nodes by doing parallel data processing. Generic commands get sent to the nodes with feedback coming back very quickly. Harvard University used it for their supercomputer clusters. Jobs that once took 15 minutes now take five seconds.

According to the SaltStack website, Salt can be scaled to tens of thousands of servers through a communications bus that orchestrates, does remote execution and configuration management as well as other tasks.

Salt is being used as a replacement for Chef and Puppet, the two leading DevOps platforms. It is now used by LinkedIn and Rackspace. Here’s an excerpt from a good analysis by Sebastian Kreutzberger, CEO of RhodeCode, an open source software configuration and management platform for Git and Mercurial:

Salt is like a mix of Chef/Puppet (defining states) and an easy way to communicate with machines directly (like with an MQ). The big difference to Chef is the architecture: the slave (called minion) does not pull for changes every bunch of minutes, which can cause weirdness, but has a standing connection to the master which allows instant changes and commands.

Noted often about Salt is its documentation, which has helped the community further develop the platform. Here’s an introduction to Salt by its creator Thomas Hatch:



Conclusion

The cloud and on-premise systems are starting to merge into one cohesive universe. OpenStack serves as a way to make data-center environments more elastic. Cloud services like Amazon Web Services represent the public cloud infrastructure. The PaaS providers are becoming environments for serving apps to these different infrastructures. These agnostic providers, such as Cloud Foundry, do not serve one cloud. They help developers serve multiple cloud environments.

The same is true for services like CloudMunch, which offers a continuous integration platform that can move code between different cloud services. CloudMunch Founder Pradeep Prabhu said this new universal world has three main characteristics:

  • There must be the choice to use any developer or operations tools with any PaaS for any IaaS/cloud or on-premise/private cloud.
  • It has to be workload centric. Whatever makes best sense for a given workload including tooling, patterns and practices and infrastructure/cloud for delivering the best results/roi for that workload.
  • It is the ability to define a customizable software delivery progression with all the checks and balances for both application code and infrastructure code with no lock-in to any tool, methodology or cloud.

Similar principles apply to Docker, which treats the app container as the way to deliver apps to the cloud or any other infrastructure. Salt also fits into this universal mentality.

The new world is not about universal control and beliefs in all-mighty systems. Open-source efforts like Docker and Salt are popular because they fit into this more flexible and agnostic view of the cloud and data center universe.

Image credit: Wikipedia

Architizer Relaunches To Connect Architects With Other Architects, And Brands, And Clients Too!

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For 100 years or more, architects have relied on the massive catalog sitting on their desk to find the right products to use in their projects – this brand of glass, or that brand of toilet. That catalog had a monopoly on the market for a century, but with the birth of the internet, that catalog never made the transition over to digital.

But a site that launched back in 2009 as a platform for architects to publish their work, Architizer, is relaunching tomorrow to finally fill the void it left.

Architizer is a two-sided platform that lets architects upload their work in order to get more potential clients as well as professional feedback from their peers. Meanwhile, brands can pay a subscription to connect their own product pages to Architizer projects in which their products were used.

How it works:

It looks a little like this:

Architects upload their work in any format they like, from a PDF to a picture of a napkin covered in scribbles. Architizer’s curatorial team then deciphers that project, beautifies it, and publishes the project on the firm’s own Architizer firm page.

Within the project, other architects can comment and view all the materials used in the building, from the fixtures to the window systems and more.

Then, brands who had products used in that building can connect with that project. So let’s say the building used Kohler toilets, for example. Within the project page, Kohler would be listed as the plumbing provider, and that would automatically be hyperlinked to the Kohler product page on Architizer.

Architizer is free to use for architects and firms, while brands pay a subscription fee of anywhere between $95/month and $595/month for Architizer to hyperlink every mention of that brand on the site.

Competition:

Architizer launched back in 2009 as a self-publishing platform for architects who wanted a digital portfolio. Though the two sites were inherently different (one is an editorial curated blog and the other is a self-publishing platform), ArchDaily stuck out as the greatest competitor to Architizer at the time.

See, ArchDaily receives tips from architects who send in their work, and then features those projects in an editorial blog-style web site. Though Architizer’s content was all self-published by architects, Architizer had an editorial team that packaged and featured the top projects for browsing on the site.

At the time, most of the company’s revenue came from traditional advertising and running branded competitions amongst architects. This new form of native advertising, however, wherein brands pay to connect with users, will end up being the main source of revenue moving forward.

As it stands now, native advertising is huge with regards to any curated or editorialized content, especially when it involves user generated publishing. Everyone from blogs like BuzzFeed and Gawker to social networks like Facebook and Twitter are pushing branded content into a special place on the site, where it’s sure to receive eye balls.

Meanwhile, recommendation engines like WeeSpring are working hard to offer solid feedback on very niche verticals, like pre-delivery baby shopping.

However, combining user-generated content with a subscription-based paid service for brands to automatically promote themselves (within that user-generated content) is a relatively new business model.

The Re-Launch:

Architizer grew from 200 projects published in 2009 to 55,000 projects published now, but founder Marc Kushner believed there was still a piece of the puzzle missing with regards to materials used in projects, and making information on those materials easily accessible to architects.

“Right now, architects know more about the sandwich they’re having for lunch then they do about the products they’re using in their projects,” said Kushner. “Right now they’re learning about these products from reviews on Amazon because there is no online destination to get credible information. We’re looking to change that.”

The site has been redesigned entirely from the ground up to make uploads faster as well as connect users to other architects and brands. As it stands now, the site sees 1.5 million monthly visitors with over 14,000 firms on the platform according to Kushner. The relaunch will include participation from 18 partnering brands including Sherwin Williams, Kohler, and Dupont.

ClearDATA Lands $14M To Give The Healthcare Industry A HIPAA-Compliant Cloud Alternative To AWS And Rackspace

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As Big Data and analytics are take hold in nearly every industry, a whole new set of demands and problems face IT teams within organizations. This is especially true among healthcare companies, which are now struggling in masse to upgrade archaic infrastructure and technology and reduce costs both for the sake of their businesses and for their customers.

While moving to the cloud can help reduce costs and increase agility, given the sensitivity of health data, healthcare clouds need to be HIPAA-compliant – in other words, the security of health data and applications is paramount.

Companies like Box are rising to fill the gap, as the enterprise storage and collaboration giant has begun to serve healthcare providers, and recently secured HIPAA-compliance for its new platform. While newcomers like Box are bringing more attention to the problem, startups like ClearDATA are growing fast thanks to clouds built exclusively for the healthcare industry.

Now serving over 300,000 healthcare professionals and hosting data and apps (including tens of millions of health records) for a litany of healthcare providers, ClearData has raised $14 million in Series B funding as it looks to expand its platform and move into new geographies. Investors in the startup’s latest round include Merck Global Health Innovation Fund, Excel Venture Management and Norwest Venture Partners.

The round includes the $7 million ClearDATA announced in August, explaining that it decided to hold a second closing of its Series B round to allow the participation of its newest strategic investor, Merck Global.

As Alex explained at the time, ClearDATA’s appeal lies in its healthcare-centric approach to data, offering healthcare customers an end-to-end service designed to make it easy to move their apps and data to the cloud, while accessing that data over a private Internet connection. It also uses a data storage model that makes it easy for companies to locate its data to allow the kind of auditing required by healthcare privacy requirements and HIPAA.

In this sense, ClearDATA differs from AWS, Azure or Rackspace in that its storage equipment is custom-designed for health data and images. This allows the company to compete with the massive footprints of cloud providers like Amazon, for example, which offers a more general-purpose cloud and a growing set of storage services and analytics tools.

Today, the healthcare information technology market is growing at a breakneck speed thanks to the demands of thousands of healthcare providers looking to go digital, transfer health records to the cloud and maintain huge amounts of critical (and sensitive) data.

These companies often lack the resources and capacity to design, deploy and manage their applications, and they’re looking for rentable, on-demand infrastructure as a result. Plus, none of the commercial clouds can meet the particular requirements of healthcare’s migration to the cloud line-for-line, so that’s where ClearDATA wants to help.

By customizing its cloud to meet these unique demands, it now works with customers that range from small organizations and practices to hospitals and large clinics, and extending to client-server and SaaS-based healthcare software providers.

For more, find ClearDATA at home here.

SAP Cutting Back on Development of Business ByDesign

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German software giant SAP appears close to ending active development of its Business ByDesign suite of applications.

The company said Saturday that it will shift its development resources away from the software platform aimed at smaller businesses and instead move the Business ByDesign applications into its mainstream HANA cloud software platform, as part of a larger effort to unify all of its applications on HANA.

SAP disputed a Saturday report by German magazine WirtschaftsWoche (English translation here) that portrayed the move as essentially sounding a death knell for the product, calling it the “biggest flop” in SAP’s history. The publication claims that Business ByDesign cost the company 3 billion Euros and required seven years of development work. But after three years on the market it has only managed to attract 785 customers and brings in no more than 23 million euro ($31.5 million) in annual revenue.

Either way, SAP’s new plans for Business ByDesign mark a rare market retreat for the company, which has been aggressive in its efforts to rejigger it’s existing suite of applications to run more off-premise, or in the cloud. Launched in 2010, Business ByDesign is SAP’s Enterprise Resource Management suite aimed at small- and medium-sized businesses. ERP is a fancy way of describing software that’s used to run a company’s operations and basic business processes such as supply chain, manufacturing capacity and paying suppliers. SAP’s main rival in the category is NetSuite, the cloud software firm occasionally known as “Larry Ellison’s other company,” because the Oracle CEO invested in its founding.

SAP spokesman Jim Dever said the company’s plan for Business ByDesign is a little more nuanced than the total shutdown of the product, as portrayed by WirtschaftsWoche. He said SAP is essentially concentrating its development efforts on its HANA cloud application platform, of which Business ByDesign will become a part.

“It will still exist and will remain on the market and our partners will continue to build add-ons for it,” he said. However, development resources that had once been committed to Business ByDesign will be redeployed to focus on HANA, he said.

Dever also sent the following statement:

“We are taking a significant and innovative step forward by putting all of our cloud offerings on the SAP HANA Platform. Moving forward, SAP HANA will be the single, unified platform that enables businesses of all sizes across all industries and lines of business to run their entire business in the cloud more efficiently and effectively than ever before. SAP Business ByDesign will become part of the SAP HANA Cloud, and will continue to be supported and actively promoted in its current functionality and scope through our extensive partner ecosystem. Optimizing SAP’s cloud portfolio on our HANA platform means a dramatic price-performance improvement with all the benefits of simplicity in the cloud for all our customers. And SAP’s BYD customers have a clear roadmap to our future HANA powered tightly integrated Suite of business applications in the cloud.”

SAP’s new plans for Business ByDesign will likely be seen as a victory for NetSuite, the cloud-based ERP software company that caters to small and medium businesses, but which has lately starting going after bigger fish. NetSuite CEO Zach Nelson told AllThingsD that the company will move quickly to try and pick up some of SAP’s Business ByDesign customers.

“SAP stopped investing in Business ByDesign about two years ago,” Nelson said in an emailed statement. “It’s a shame they kept selling it to customers. NetSuite will announce a migration program next week for those customers who are now left high and dry. And they can switch to NetSuite knowing they are moving to a company and a product that are leaders in the cloud.”

As for SAP, all the work it has been putting into HANA doesn’t seem to be paying off quite as well as the company had hoped. Earlier this year, slower than expected cloud sales dragged down the company’s quarterly results, which caused some analysts to wonder if it can still hit its guidance for the year. Earlier this year SAP was accused of inflating HANA sales numbers, though not everyone was convinced.

SAP has also seen some management shake-ups. First Lars Dalgaard, the CEO of SuccessFactors, the cloud-based human resources software firm that SAP bought in 2011, bolted to join venture capital firm Andreessen Horowitz as a partner. After that, co-CEO Jim Hagemann Snabe stepped down, leaving Bill McDermott as the sole CEO.