tv Bloomberg Technology Bloomberg June 7, 2017 11:00pm-12:01am EDT
alisa: i am alisa parenti from washington and you are watching "bloomberg technology." former fbi director james comey will tell a senate committee president trump asked him to make it known he was not under investigation in his russia probe. comey will also say the president asked for his loyalty and that mr. trump said of the investigation into michael flynn "i hope you can let this go to testifying today, director of national intelligence dan coats declined to say whether trump pressured him on that russia investigation. "the washington post" said the president asked him to intervene with then director james comey and michael flynn in the pressure pro.
ts russia probe. tesla is warning that syrian government allies will strike and american positions inside syria if it crosses any red lines. the lebanese military group made the threat one day after u.s. forces bombed forces there. they condemned the terror attack in tehran and are asking for perpetrators and financiers to be brought to justice. the statement was drafted by japan on behalf of countries in asia pacific region, and was approved today by all 15 council members. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am alisa parenti, this is bloomberg. ♪
emily: i am emily chang. this is "bloomberg technology." one-on-one with meg whitman in a bloomberg exclusive. she joins us live from las vegas on maintaining profitability in the age of the cloud. one day before former fbi director james comey testifies before the senate, president trump tweets of the name of his potential successor. we will tell you more about former doj official christopher wray. with hours to go before the u.k. general election, online voting is front and center. we break down the pros and cons. the annual hp discover conference is happening this week and the company has outlined how it will continue to grow and stay competitive in the age of cloud computing. hewlett-packard ceo meg whitman joins us live a for a exclusive interview in las vegas. thank you so much for joining us.
meg: happy to be here, emily. emily: it is almost two years post split. what is your number one message to customers today as technology shifts beneath us? meg: there are two very important messages. first, we believe the world will be hybrid. we want to make hybrid i.t. simple. applications will be on and off and in the cloud. each customer has to find the right miss for them. they are rethinking, do they want to put as much effort and applications into the cloud as they thought? for reasons of control, -- another big opportunity for customers is that the edge. when you think about factory floors, the edge, everything other than your data floor is exploding in that -- in terms of the need to collect data and store it. emily: there have been questions about margins in particular.
why is the environment so difficult right now? meg: our margin in enterprise group, a major part of hewlett-packard enterprise, was down in q2. we had costs from the best teachers -- divestitures. we had significant increases. we anticipate it will go back to historic levels by q4. if we continue to grow high-margin growth products, gen10, the most secure server in the world, you will see nice financial performance from us. emily: what is the strategy to get cost down to help with the margin issue? meg: we have to really -- we have a much smaller, much more focused company. i am the only ceo enjoying a smaller company rather than a bigger company. we have an overhead cost structure we have to get down to
be more in line with the new company we run. we have to reengineer policies to make things simple. that will lead us to stake out more costs and be more cost competitive in a very competitive market. volume servers, a very competitive business. we need a more cost-effective cost structure there. emily: when we spoke of this time last year, you said dell was making a big mistake i merging with emc. cost structure there. that said, hpe stock has been under pressure. has that led you to reconsider whether smaller is still smarter? meg: no. we're really proud of our financial performance and stock price performance since the flipped from hewlett-packard, to hewlett-packard enterprise. when you think of the stock price of the company as a whole, which reached a low of $11.62 in the fall of 2012. if you add up hp ink, our share of dfc, and the software
company, it is almost $50 a share. we have done very -- $58 a share. we have done very well. emily: can they play hard ball better because they are private? meg: there are advantages to being private. but dell, because their debt is publicly created, we have a window -- they do not get the scrutiny we do. we really like our hands. we have no debt on the company. we have about $6 billion of net cash on the company. we have gotten more strategic, focused. we are smaller, nimbler. we can turn on a dime now. it is a different strategy for dell. we are getting -- they are getting bigger, we are getting smaller.
we are leaning into more technology and they are doubling down on old technology. i like our hands. emily: how reasonable are valuations right now? meg: they have become a lot more reasonable in the last six months. we made an acquisition of almost one a month for the last six months. valuations are coming down because venture capital is getting tighter in silicon valley. the willingness to fund losses for indeterminate time is shrinking. we bought rights, we have cloud cruiser rights. they are dead on to our strategy of making hybrid i.t. simple, empowering the edge, and the services we need to make it all happen. we are feeling good about the opportunity to make reasonably priced acquisitions that fit our strategy. emily: what are the attractive targets? what areas are of interest on your radar?
meg: we are interested in a number of areas, but the first is the software decline data center. it is more a software company than a structure company. it is around deploying applications easily in a hyper converged environment. we are interested in software defined, all-flash storage. we are also interested in the edge. aruba was an incredible acquisition for us, growing 33% in the last quarter. we are super excited about that. we bought -- machine learning for security on the edge network. we continue to look for opportunities at the edge. emily: you spun off your enterprise services business, how does the services business evolve? meg: services will be an important part of our next. every company is trying to take their data center on a
transformation journey from an older, brittle, high cost environments, to the new environment that is so essential for their competitive -- their ability to win in the market. services, people need help on that journey. why we will not do i.t. outsourcing or app maintenance, we will revive and transform. we think it is an important part of the business area the other part of our business is the echo system of partners. here i discover in las vegas we have the biggest presence of partners that we have had in many many years. a lot of folks are anxious to do business with us because they do not view us as having an asset that is competitive to what they do. we are still focused on technology but have a whole bunch of players interested in doing business with us now, and that is great. emily: there is only's great fascination around what your future holds.
how long do you plan to continue running things that hpe? meg: i love what i am doing, i have to say. now being head of a smaller, nimbler, faster moving company makes this a lot of fun. i love what i am doing and we still have a lot to do. another phase in our journey to make hpe everything it can be. i am here until my work is done. emily: what more work to feel you have to do? meg: we now have to take this make hpe everything it can be. very focused company called hewlett-packard enterprise and make sure we have a cost structure that allows us to compete in the marketplace. we still have a little too much overhead because we had an overhead that oversaw $110 billion company. we have to take more cost out of that. we have to redesign some of our
systems, our processes, to be more appropriate for a smaller, more noble company. we have more cost take-out to do and a lot of innovation coming to market. i want that to land well, like our server, which is getting rave reviews at this show. it is the most secure server in the world, and everyone knows security is one of the big issues facing every i.t. department. emily: you urged president trump not to pull out of the paris climate accord, along with other business leaders. hours later, he pulled out. how does that impact your relationship with the president? meg: as you know, i was on the other side. emily: you urged president trump as a lifelong republican, i endorsed hillary clinton. i said to our employees, i wrote a note which said, president trump has won, we need to give them the benefit of the doubt, so we are. but when we think there is something not in our best interest or the country's best interest, i will speak out. i said, i thought we ought to stay in the paris climate accord. the next generation of
industries around clean energy is important for the united states of america. it does not impact our relationship. people can disagree and we disagree on this issue. emily: tim cook also told me he thought the president decided wrong on paris but planes to keep an open dialogue because he thinks it is important for america, the company. what is your strategy and what are the number one things on your priority list when it comes to discussions with the white house? meg: we are in favor of tax reform. we think the ability to repatriate money overseas is important. a lower corporate tax rate would spur growth in the united states. on the other hand, we are not for the border adjustment tax. that is very difficult for companies that deport a lot of
their products and -- it is not in our best interest. by extension, in the best interests of the united states. to make it clear where we stand on issues, very respectful, civil discussion. that is what this country was built on, civil discourse and the ability to disagree without being angry. emily: meg whitman, ceo of hewlett-packard enterprise live from the discover conference in las vegas. think you for joining us. much more of our conversation with meg whitman later this hour. coming up, president trump says he will nominate a new fbi director on the eve of former fbi director comey's critical hearing. this is bloomberg. ♪
emily: we have breaking news, and emailed statement from the president's personal attorney, responding to james comey's opening statement, preceding the remarks he will make tomorrow before the senate. he said trump feels vindicated given that in comey's opening statement, he confirmed that the president was not personally under investigation by the fbi. again, the president's personal attorney saying trump feels vindicated. we will follow former fbi director james comey's critical testimony all day tomorrow on bloomberg television. on the eve of the highly anticipated congressional hearing of former fbi director james comey, his opening statements have been released. he says president trump asked him in february to put an end to an investigation into former national security adviser michael flynn. comey also states the president told him "i need loyalty," when they find alone in the white
dined alone in the white house, with regards to the investigation into russia. president trump will nominate christopher wray to run the agency. as investigations into russia continue and -- is wray the right man for the job? what do we know about christopher wray? >> he is a solid prosecutor. many people in washington said he is the best guy on the list, we are happy about this. he has a history of bringing cases. he was at the justice department after 9/11, was involved in terrorism and other coverage at the time. he went on to oversee a task force. many other matters. he is an experienced prosecutor. emily: what do you expect his approach to be on issues like cybersecurity? the russian investigation?
winnie: first up, he is not going to be overseeing the russian investigation. that is now run by a special counsel by robert mueller, former fbi director. who he worked with had justice. they know each other, they are not strangers. his double be to oversee the be to overseel the fbi. we do not know a lot about what his intent will be we look back at his 2003 testimony to congress on the patriot act and fighting terrorism. he was very supportive of the patriot act. new, enhanced surveillance techniques and tools to put the fbi on a more even playing field. he cited the patriot act to get information from internet service providers to go -- we do not know how they will feel about hacking cases or hacking iphones. derbecame a big deal une
comey. it will get into the limelight at some point. emily: winnie o'kelley, thank you so much for joining us. do not miss our special coverage tomorrow of former fbi director james comey, testifying before the senate intelligence committee, on bloomberg television and radio. check out the seven-page opening statement, it is quite a read. ahead of the u.k. general election, online electronic voting. just how big is the risk of a high-profile attack? this is bloomberg. ♪
emily: as british citizens had to the polls to vote in the general election, the debate on how people vote, back in focus. a new poll in the u.k. reported 42% of adults who are not planning to vote in the june 8 general election will be more likely to cast their ballot if they could do it online. let's get the caroline hyde in london, with more. caroline: i am joined by a great guest, out there helping count
as many as -- election votes. let's speak to mike summit. this is already a company that helps with electronic voting. where are you already helping with this? mike: we are working on five continents around the world. we have counted 3.7 billion electronic votes. the government of belgium, customers in estonia. we have done three nationwide elections in the philippines. we have just done a big project in armenia. literally, anywhere across the globe, any democracy. caroline: and the u.k. isn't operating online? why? mike: we have to ask the u.k. government. i think it is a shame. if you look at the recent technology successes within government, it has been the success of the online voter registration pool.
just last week, when the registration deadline closed, 622,000 people were registered to vote online. in one respect, we are doing something to enhance and make the registration process. it is a criminal shame we are not closing the loop and making voting easier. the reality is, in the u k, election participation is dropping through the floor. we can make voting more accessible by allowing online voting. caroline: talk about the challenges, concerns. there are concerns when it comes to fraud, privacy, cyberattacks. how are your technologies ensuring that will not be a concern? mike: it is important to stress that a lot of the things you read in the paper about potential state manipulations of elections and foreign intervention actually have not touched upon voting citizens. the reason for that is that voting technology is particularly hard to hack.
we deal in very specific additional security features, featuring and to end encryption -- end to end encryption. they are quite concerned about the privacy and security of these platforms and tools. we strongly protect those votes so they cannot be hacked. caroline: nevertheless, we saw in france a pulling back from online voting, particularly because they were worried about cyber attacks. why did they do that if you have such a strong encryption? mike: it is important to stress, that is not a system we deployed. i think it was a knee-jerk reaction to this general climate of concern around cybersecurity. it gave them a chance to look at the system solution and make sure it was watertight.
if you follow that story through to its conclusion, one of the challenges is the suppression of that online voting, there were thousands of voters who were disenfranchised from being involved in the election process. without doubt, i think we will see that reinstated. caroline: if the u.k. government came knocking, a could be at the end of this week, what would you say, there would not be an issue, such as the dnc hacking? mike: one of the advantages of technology in elections, you can introduce verifiability. it allows you to show that everything you say about the security solutions is operating correctly. it supports one of the key, fundamental principles of
democracy, which is transparency. we have tools in the system that allow us to check right away through the casting process through the storage process, to prove it has not been manipulated. that is one of the advantages of online -- electronic systems over paper systems. caroline: mike summit, it has been wonderful having you. we will see how this election goes. he is already helping other countries get online when it comes to voter registration. emily: caroline in london, thanks so much. coming up, more from our conversation with meg whitman on the health of her company, hpe. if you want to check us out on the radio, you can listen to us on sirius xm. this is bloomberg. ♪
paul: james comey will tell congress president trump asked to see his way clear to letting this go. in a testimony for his appearance before the senate intelligence committee, comey will say he never agreed to it -- to end the inquiry. trump says he will be taking action very soon to stop foreign steel being dumped on the u.s. market.
the effective steel imports on national security under the seldom used section 232 of the trade expansion act. wilbur ross has accused china of failing to deliver on its promise to reduce excess still capacity. u.s. markets are seen a risk level since the financial crisis with investors paying dearly for the chances they take. central bank policies and low rates were artificially hiking asset prices. gross says investors are buying high and hoping. global news 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. emily: a check on the markets in asia. a more cautious turn. we see equity markets mostly turn to gains.
we do have chinese stocks leading the charge along with shares in hong kong, up over the 27th -- 26,000 level. but it's being tested with the kospi. we have shares in sydney turning .1%, despite the disappointing trade balance. the aussie dollar remains the worst performing currency. are arriving -- bearish bets are arriving. we have the commodities space picture. oreres reversing as iron prices picked up marginally. we do have chinese exports to look out for.
keep an eye on what the reaction will be when it comes to that csi 300. we have energy stocks beginning to fall in asia. in sydney and cnooc in hong kong leading the drop in asia. ♪ emily: this is bloomberg technology. interviewr exclusive with meg whitman. she hit the stage and said hpe is seeing a slowdown in the public cloud. we asked if businesses are rethinking their move to the cloud and what that means for hpe going forward. take a listen. meg: the way we see the world's hybrid i.t. what do you want locks down in your data center, untouched but by only your employee hands? what would you want in a managed
service? there is a role for public cloud. the for reasons of cost, security, control, people are beginning to say i wonder if i have gone too far in putting workloads into the public cloud and then want to bring them back on prem. emily: what does that mean for hpe? is ine have to do what our customers' best interest, which is a multi-cloud environment where they can have a right landing spot for their workloads. and we make sure they don't end up with the vendor lock in. people say, once you move something to the public cloud, it is difficult to move it back. we want to give customers choice and make sure that we do for them what is best for them. have been questions about your cloud partnership with microsoft. how is that going? meg: it's going well. we've done a lot of business with microsoft for many years.
they are our public cloud partner. when the customer says that these are the workloads i would like to have in the public cloud, we say it's a great opportunity. cloud want your personality on prem and you want your staff on prem. i think microsoft is a great strategy and we are great partners with them. and it's about customer choice. cloud they want a public partner, we recommend asur. emily: what does it mean for hp? meg: this is a dynamic industry. for a long time, infrastructure was not in fashion. we see all kinds of people getting into the business. we will figure out how to have a opetition.ip around co we will figure it out.
emily: tech stocks have been on a tear since the election, despite political uncertainty. what are the market dynamics you see helping or hurting hp? it's a challenging global environment right now. there are some countries doing very well. and there is uncertainty in a number of countries. uncertainty is not good for business. our strongest market in europe is germany. germany is doing incredibly well. but the u.k. is challenged. public spec -- public-sector spending is down. firms investing in the u.k. are holding back because of brexit. it doesn't mean that they won't spend, but it is on a pause. i don't know what is going to happen here, maybe a should take a little time to think it through. japan a strong for us. australia is coming back. latin america is doing well. and the u.s. is uneven. so it's a mixed environment. we have to make it work in every environment.
we sell as hard as we can and try to give customers as much choice no matter what is going on in the backdrop. emily: i'm curious what you think of the unicorn startups, what you see them doing well, what you see them doing poorly. g: the startup scene in silicon valley and elsewhere is alive and well. it's a renaissance of innovation. think about what you're seeing. there are some very innovative companies that are unicorn valuations. we are seeing the ability of venture capital money to keep funding money-losing startups. we are starting to see a pullback there. one of the reasons we were able is it was notity clear that they would be able to raise the next round. neville had a great fundraising round, but they needed to be tucked into a big company. so there will always be
unicorns. there will always be new companies. but it's an opportunity for us as we think about our m&a strategy and our innovation strategy. pe is heavily investing in your vision for the future of computing. how will this help customers in the computer -- in the future and how will this evolve? meg: one of the big challenges is the demand to build a data centers, the demand for space, and the demand for energy is unsustainable. we work in parts of the world where there is no more energy on the grid. that caused us to think through the fundamental model of compute. it has always been a cpu-centric model. can we turn that on its head and make it a memory-centric model, where data is moved through [indiscernible] which means smaller space, farmer energy efficiency. we are super pleased with the progress of the machine. we are already and betting parts of the technology to our next
generation servers in storage. we are excited about the amount of data that can be processed with a very low power utilization and in a small form factor. it is on track. it has had its ups and downs, but we are super excited about it. emily: articles of interview with meg whitman. round,latest funding adding $300 million to the were just. the highly competitive field of consumer electronics. valued at $900 million to a billion dollars. essentials submitted new paperwork late may, a few days before co-founder andy rubin unveiled the first two products, a high-end smartphone and an echo-like gadget. a new report out by nielsen shows ratings do not equal social engagement. the company conducted a study
fromincludes information twitter and facebook to see who is getting the most attention. walking dead" was by far the most viral tv show on social media, but only the eighth most watched show on my -- on live television. trailing behind it is "empire," and "bachelor" franchise. we will look at the car market with stacy smith. why it will be twice the size of the sharing economy next. this is bloomberg. ♪
though google self driving car project has been seeking a copy of the report as part of its uberaration for trial but bu has refused to hand it over claiming client privilege. much has been said about the race to a taunus vehicles, with both startups and tech giants scrabbling to the start line. less has been -- what has been said about what these copies are racing for? we will go to cory johnson for more. : they are racing for a seven chile dollar market.
they expect the world will be economists by 2050. stuff.ally interesting the grouph is management and sales. this is a fascinating study with .ome really big ideas what is the biggest idea in all of this? : transportation, like information, starts to become free. it changes how you consume information, how you think about owning a vehicle. it gives you time. back. it makes the world a safer place. we have seen disruptions like this in the past. it is huge opportunities for companies and huge threats for companies. it can disrupt entire industries. cor adoption rates are
interestingy. talk about how you imagine that happening? the report does not describe the evolution, but i expect it starts at a high-end vehicle and then gets cheaper and cheaper. at it at aou look near-term timeline, over the next five years, you will see tens of millions of autonomous cars on the road, but in the sense that they are doing the driving for you, but you're still sitting there with the steering will and there will becomes when you will want to take control of the vehicle. another five years from their. and you will see an increase in penetration of cars that are fully autonomous. think of them more like a pod. you will get in. there will not be a steering will and they will take you from place to place. you will get out and then. that car will pick up the next person. you will see an adoption curve
that plays through. you will start to see a lot of it in the next five to 10 years. cory: there was an interesting with aof a vignette family living outside of berlin where the car is running out and doing errands. i was picturing something like the amazon echo. we get to your launch under dry-cleaning. it also spoke to this idea of car ownership in the future, not just of mobility as a service. stacy: exactly. that is why this is important to think about now. it disrupts so many different industries. i think you'll see three big impacts from this. first of all, transportation becomes a most free. the of goals become electric. the way you think about -- the vehicles become electric. the way you think about getting from place to place and how you have things delivered to you
changes dramatically. using the vehicle to go to work or connect with friends and family and consuming content. it eliminates deaths on the road due to human error. it has an impact on the world economy. of a there is a suggestion lot more time that people will have to do stuff. it had me thinking about 5g, conductivity, tablets and smartphones or what ever the devices are 20 or 30 years from now that intel wants to be a of. is that part of the notion that there is so much my computing happening because people will have their feet up instead of their hands on the steering wheel? exactly. think about the car as being this really powerful computer that is connected to the server structure. data from today in the u.s., and
average person spending five hours a week in their vehicle to in britain, it is more like 10 hours a week in their vehicle. structure. beingrom today in thethat timeo completely productive time. you can use it to work, to connect, to consume content, to shop. you could probably use it consume services when you think of it out 10 to 15 years. and you will get some of that time back. wade new are in this fully autonomous world, the grid becomes much more efficient. it gives you time back and it gives you time that you can use to enjoy yourself or to be productive. stuff.t is mind blowing apple using that are, faster intel chips like they might have introduced a while back, what does it mean that apple does is for intel in a world where people see pc contractions in the business? stacy: we have talked about this over the years. innovation is so good for us. when we see innovative companies like apple that are introducing
things, that people are really hundred to go by, it is wonderful for them. it is wonderful for us. we are pleased to be a partner for apple and help them deliver this kind of technological innovation to the marketplace. in their new pro line, i saw some of those yesterday as i was reading through the news reports. it's one of those things i was wanting to go out and buy. that is exciting for us. cory: 18 core xenon processors? that's amazing. this report is fascinating. i will put it on my twitter as well. mind blowing stuff. much. thanks so toshiba has reasserted the right to sell its chip business. it has rebuffed its american manufacturing partner. western digital hasn't been able
to match the price offered by other bidders. coming up, more news out of uber. in itsest developments internal investigation into sexual harassment. and a future i would like to bring to your attention -- our new interactive tv function. .loomberg tv you can watch us live, if you missed in the navy you can go back and maidens and a message, play along with the charts on-air. this is for bloomberg subscribers only. check it out on bloomberg tv . this is bloomberg. ♪
more developments on uber and the probe looking into the alledge it workplace violations. rapeunderstands the and kidnap of a woman by a driver. this rape case from india back in 2014 coming up now? that toprned had been skeptical that this rape had occurred and had propagated the conspiracy theory that their competitor might have planted it, and that travis, even after the conviction happened of the driver, continue to float this theory that it did not occur. so it was deeply troubling to employees at uber.
emily: you call a specifically eric alexander. eric: he is a business development guide that was dealing with some of the case and investigating a little bit and got the case file from attorneys,rom uber's which included the medical report of the victim. and he was very cavalier in how he treated the case file. emily: does eric alexander still working the company? eric: no. he left basically after we started asking questions about it. emily: do we know if this was a result of the sexual harassment investigation or your reporting? eric: there is some muddying of the waters. a doesn't seem that he is one of the 20 people that were let go yesterday. but there are a lot of factors. this holder report is also coming in. we could see further departures
coming from this separate holder report rather than the perkins investigation we saw on tuesday. emily: what do we expect to learn from thisemily: holder report? now we are hearing that it will be recommendations and that the findings will be held tightly by the board. -- they are still seemingly working on what the recommendations are, but there will be recommendations about a fix for this company after scandal after scandal after scandal. emily: how is this affecting the internal culture of the company? i know you're on the phone a lot. what are people telling you? eric: i don't think this is helping the mood. i think people were optimistic employeespurge of 20 who had social harassment and retaliation complaint against
them. but i think there are bigger questions about the company's culture and that is not good to them.y for employees who did not know about it, which is a lot of the new people, it will be troubling to them. emily: thanks so much for giving us that update. that does it for this edition of bloomberg technology. this thursday, special coverage of the u.k. election will be airing instead of bloomberg tech. tune in for our one-hour special live as exit polls are published. bloomberg tech's life streaming on twitter. that is all for now. this is bloomberg. ♪