tv Best of Bloomberg Technology Bloomberg June 10, 2017 6:00am-7:01am EDT
♪ emily: i am emily chang. this is "best of bloomberg technology" where we bring you the best of weekend interviews and technology. we will have talks about president trump and how apple sees its role in fighting against terror. also, our one-on-one with the hewitt packet energy ceo from las vegas to give us a progress report on their turnaround in the age of the cloud. theher bombshell at uber,
company fired over 20 employees after investigation into sexual harassment claims. first, to our lead, our exclusive interview with tim cook from the apple worldwide developers conference. the company set the stage for the hardware and software that will hit the stage in the next couple of months. this year, they introduced a major overhaul of the apple watch operating system among other products. productanswer is there cho andat the amazon ec google home. >> we tried to build something that is a breakthrough speaker first. music is in our dna dating back to itunes and ipod. we wanted something that sounded unbelievable. i think when people listen to it , they will be shocked about the
quality of the sound. course, it does a variety of other things that are important as well. emily: you are very focused on how this could reimagine music in the home. is there a lot of other things you can do for it like call for a car or order groceries? >> there are a lot of things you can do with it. there are a lot of things that siri knows how to do from the phone. so, we will start with a patch of those as you saw in the keynote. emily: let's talk about e-commerce. they are very important to these products. can you tell us about some of apple aspirations in detail?
it ist i would read into that apple is a company concerned about music and wants to deliver a great audio experience in the home. we felt like we reinvented it in the portable player arena, and we feel we can reinvented in the home as well. we know people want a speaker to now do more than that. and, obviously, we want a speaker to do more than that. so, you are combining what has been thought to be too distinctly different things from distinct abe two different things from that. i think people are going to be kind of blown away with the experience. emily: how long have you been working on this? >> multiple years. the underlying technology in here is something to behold. to get the experience that we wanted at the quality that we
-- apple products, in general, take a number of years to do. emily: you have people out there saying finally. what took so long? >> for us, it is never about being first to anything. if you think back, we did not have the first mp3 player or smartphone or tablet. there was a tablet shipping a decade before, but very few people used it. arguably, we ship the first smartphone, mp3 player, or tablet. for us, it is not about being first, it is about being the best. we want to give the user an experience that delights them every time. we do not let that in patients inthat impatience result
shipping something that is just not great. emily: it is the 10th anniversary of the iphone, and you have unveiled the new operating system. what is next? 11 isan tell you that ios unbelievable. there are incredible things in it from. to payments -- from peer-t o-peer payments and more. i am incredibly excited about a.r. you saw the demos done today. i think this is profound, and i think we today, as we get this developed and into the hands of developers, we are going to have the largest a.r. platform in the world. i think we have launched it in a large way to large numbers of
♪ emily: california is the home to tech giants that bring home millions in tax revenue and jobs to the state. we spoke with john mckenzie in beijing. game isompetitive getting more intense. america cannot rest on its laurels. time try toore reduce taxes on the rich instead of generating more investment in
both the private and public sector. that is kind of where i think washington is going right now. emily: now back to our exclusive interview with apple ceo tim cook. we moved on to politics. the president urged him -- he urged the president not to pull out of the paris climate accords, but president trump decided differently. tim cook disagrees with him, saying that the global warming crisis requires worldwide cooperation. >> i think he did listen to me before making his decision, but i think he decided wrong. i think it is not in the best interest of the united states what he decided. the way that i look at this thing -- do you interact with politicians or do you not? is, first andew foremost, things are about can
you help your country? if you can help your country and do that by interacting, then you do it. is --ountry and clips .ountry eclipses emily: what do you think of president trump's relationship with the business community? >> i would differentiate leading wayuncil and advising in a that you think can help our country. i think the first one is a judgment call that people make. i did not join a council. it was not a decision i had to make, what i understand both sides of that. -- i had to make, but i understand both sides of that. helpingif it is
america, that is a requirement as a ceo. you definitely do that. to pitch thechance paris agreement again, then i will do it again, because i think it is very important that we engage to fight, change on a global basis -- to fight climate change on a global basis. this is something that you cannot solve country by country, it requires a global action. emissions created by one country affect another. it is something we feel very strongly about, and it is something where i want to do everything we can do to show how important it was to stay in the agreements. unfortunately, he decided something different. emily: why didn't you join a council?
that myeasons, one is primary job is being the ceo of the company. i spent a bulk of my waking hours doing that, and i do so willingly because i love the company and the people in it. is notveling back east something i look forward to doing except for when i need to. thesely, i do not find committees to be generally productive. it was not about not wanting to advise on something where i or that wecould help had a point of view that should be heard. situationmagine a where i would not do the latter, because i think it is in america's best interest to do that. i am first and foremost an american.
emily: we then moved on to cybersecurity. u.k. authorities put more pressure on tech companies to prevent their products from being used by violent extremists. apple has taken a stance on user privately in the past in their standoff against the fbi over the shooting in san bernardino, california. we spoke exclusively with tim cook about what the company is doing to combat terror threat while balancing privacy insecurity. >> these terrorist attacks, go outf all, our hearts to everyone affected by them. horrendous. this -- for us, we have been pretty much in the u.k. for the whole length of time for our company, and it feels like they are a neighbor. we have thousands of employees
there. so, our heart goes out. what do we do as far as helping with this? one thing we have done since the beginning of the app store is that we curate the app store. we do not want hate speech on there or these recruiting tools on there. sincee been very careful the beginning about these things being on their. -- on there. i may make some mistakes, but do not know of anything getting through in that perspective. we are very vigilant on what happens from that point of view. also, we have been quite parading with the u.k. government in not only law but on somematters, of the attacks, and i cannot speak on detail -- in detail on
that, but in cases where we have information and they have gone through the lawful process -- we do not just give it, but we do it very promptly. that they would say we have been cooperating well. think it is some valuable information. i think there is in this understanding about -- encryption does not mean there is no information. meta-data exists. when you are putting together a a is verymeta-dat important. emily: is apple working to make encryption stronger? >> the reality is that these attacks on people and government
-- these affect your safety and security. it is not just privacy. it is not privacy versus security. it is privacy and security versus security. we are always working to try and stay one step ahead of these hackers who, frankly speaking, have gone from the guy in the basement, a hobbyist, to a sophisticated enterprise. it takes all that we can do to do it, and we do not think our users should have to think through all this stuff. it is not practical for people thomas so we tried to stand up -- users and stay one step not practical for people to think about all of this, so we tried to stay one step ahead of these hackers for them. emily: coming up, a surprising
emily: now to a bloomberg sc oop. uber'slout of sexual-harassment claims has led to the termination of employees. this investigation is being led u.s. attorney. variety ofe a discrimination charges. of those, 20 or more have been fired. her are more firings that could more firingsre that could occur. uber itself has to be very careful about facing further lawsuits from employees if they speak out against them. we have seen a lot of executives leave.
some of them have left statements, but we are still watching. what about the investigation of the former u.s. attorney general's handling? >> it is being very tightly held. we expect sometime next week to find out some public version of what they found. importantly, what he is recommending. there is the fact element where we will find out more about these incidents, that we will also find out holder's recommendation on what the company should do. emily: could more firings occurred? it is not being rolled out. i think a lot of people expect top executives to be held accountable explicitly. it will be interesting to see what happens with the holder re port. emily: in the meantime, there have been other executives who have left.
>> yes, the head of finance left. the head of growth left, and on a was resignations result of the sexual-harassment allegations. emily: in the meantime, there have been two, key hires. both are women. tell us about them. >> there is the chief brand manager, and there is going to be the head of strategy. she's going to come in as the whoard business school guru will come in and give them advice on how the company can turn the corner. committee --vest the invest conference kicked off in new york. about one asked him tesla, andshorts,
what would stop him from shorting it. >> i think it would have to be the company actually making money from its products. that was also solar city he bought into, and that worked out better than tesla. this is a company that burns a lot of cash. they have not finished its gig a-factory. the batteries are made by panasonic. the model 3 has been losing money for them. they hope to make money by car which we,000 think will be a lot more than that. you have the executive partner i havend the only one seen longer i think is valiant.
people are leaving left, right, and center. they are not waiting around to see the company's future. we will see. the production of the car is supposed to happen in july. i noted with some interest as i got here the opening remarks trump mr. musk. from mr.g remarks musk. he seems to be trying to position the company is something more than just a car rompany, but they are a ca company. in addition, he is going to have to raise a lot of money. if he is going to be doing and 100,000l 3's
of the model s and x's, then he is going to be something on the order of 30 some billion dollar in revenue, and he's going to need about another $10 billion in capital. tesla fans should brace themselves as they will likely get a chance to buy more stock in the coming months. >> is it something in their story that the model 3 does not live up to the hype? in terms of your thesis becoming validated, would it be more of a sort of investor strike where conditions change in a market downturn? is nothe model 3 popular, then it is going to hurt. that is the one everyone is waiting for. it is supposed to be for the modern day, middle income person
who does not want to or cannot afford the model s or x. at the end of the day, he has to make a car for the masses that is successful. that is what we are going to watch. ♪ emily: crypto currencies get a new milestone that would have been unfathomable decades ago. when currency is now up tenfold in a year. getting that 12 digit threshold is largely due to bitcoin which is the largest digital currency. one company that is involved in vcs change is backed by like steve ventures. we spoke with the ceo about what he sees as the driving force behind crypto currencies. >> i think we are seeing strong demand across a couple of key
markets. ofare also seeing levels macro instability across the world which is driving a lot of growth. i think it would be a mistake on focusing too much on that instead of the huge innovation in the space across a variety of assets. >> when you say a huge surge of innovation, we going to see some instability? we have seen some plenty of paul otellini -- volatility when looking at the prices, is that going to stay? >> i think it is here to stay, because the price is going to move a lot. is pretty established, and it does trade at a fairly low volatility. the other assets like some of the ico's you are seeing from the newer assets, i think those are going to remain very volatile until they mature and build market depth.
>> can you talk about the trend of ico's? many of these companies are launching their own crypto currencies. what is the trend there that you are seeing at block chain in particular? >> advocate is important to think of these as tokens rather than initial coins. they represent some sort of value to these products. i think we are seeing both tech companies-- new tech but also established companies doing this. it across the tech space with both new and established products, and i think that is very interesting. emily: still ahead, another exclusive interview.
emily: welcome back. the annual hp discover conference took us this week, the company outline how it will continue to grow and stay competitive in the age of cloud computing. join us for an exclusive interview from the discover conference in las vegas. there are two very important messages, first as we believe the world will be hybrid. our objective is to make hybrid i.t. simple. applications will be in the cloud and each customer has to find the right mix for them. a lot of customers are putinking do they want to
as many applications in the cloud as they originally thought for reasons of price and control, it may be better to keep it on prem. another big opportunity for consumers is the edge, when you think about campus, grant, factory floors. the edge is exploding when it comes to the need of collecting data, storing it. have been questions about margins, why is the environment so difficult now? >> our margin in enterprise a major part of the company, was down a little bit in q2. we had stranded costs from our divestitures, acquisitions that were initially diluted, significant commodity cost increases. we anticipate that margin will go back up to historic levels by q4. if we continue to grow our high-margin products, growth aruba, all flash
storage arrays, our new server which is the most secure in the world, you will see nice financial performance from us as we finish the year. emily: what is the strategy to get costs down to help with the margin issue? to -- we have a much smaller, much more focused company. i am probably the only ceo in america that enjoys running a smaller company rather than a bigger company because it's so much simpler. we have an overhead cost structure that has to be in line with the new company we run. that will lead us, i think, to be able to take up more cost and be even more cost competitive in a very competitive market. volume servers, very competitive market. we need a more competitive cost structure. last year, we spoke you said that dell was making a big mistake merging with emc.
that said, hp stock and growth has been under pressure. has that let you to change whether smaller is really smarter? proud of our financial performance and stock performance since the split with hp ink to hewlett-packard enterprise. if you think of the stock price as a whole, which reached a low hp inc.2, if you add up , our share ofd the software company, that is close to $50 a share. our stock has done really well since we had split off from hp inc. almost 18 months ago. can dell play hardball better because they are private? >> there are some advantages to being private but actually because their debt is publicly traded, we have a window into
their financials, much in the same way as a public company. they don't get the scrutiny we do. we really like our hand. we have no debt on the company, infact, we have $6 million strategic cash, we are smaller, and the blur. we have dry powder to make acquisitions, investments. we can turn on a time now, which is a different strategy from dell. we are getting smaller, we are deleveraging, and we are leaning into new technology. they are doubling down on all technology and a cost take-out play. it is a different strategy, i like our hand. m&a, howen it comes to reasonable our valuations right now? they have become a lot more reasonable in the last six months. we have made an inquisition almost one a month for the last x months. venture capital is getting a little tighter in silicon valley
. nimble right, cloud deader right, and we are onto the strategy of making hybrid i.t. simple, powering the intelligent edge, the services we need to make it happen. we are feeling good about the opportunity to make reasonably highest acquisitions that fit our strategy. emily: what are the attractive targets, what are the areas of interest on your radar? >> first is the software defined data center. think about simplicity. that is more of a software company but it's all about deploying applications easily in a hyper converged environment. nimble is software defined. all flash storage for entry-level and mid- tier. we are also interested in the edge. aruba was incredible acquisition for us, growing 33% in the last quarter.
a machinebasically learning for security on the edge network. we continue to look at acquisitions at the edge. emily: you have spun off your enterprise services business that you are still in business with point next. how does the service of all? >> services will be an important part of the mix. every company is trying to take their data center on a transformation journey from an , not, brittle, high cost particularly flexible environment, to a new environment that is competitive with their ability to win in the market. people need help on that journey. , i.t.we will not do ito outsourcing, business process maintenance,apps we will do advise and transform, and that is what next is. the other part of our business
is the ecosystem of partners. here at discover in las vegas we have the biggest presence of , that we have had in many years. that are lot of folks anxious into business with us because they don't view us as having an asset that is competitive to what they do. we have a whole bunch of players who are really interested in doing business with us now, and that is great. emily: always great fascination around what your future holds. how long do you plan to continue running things at hpe? >> i love what i'm doing, i have a say, now being ahead of smaller, more noble company. i have more work to do. we have another phase in our journey to make hpe on that it can be. i here until my work is done. emily: what more work do you feel you have to do? we now have to take this very
focused company called hewlett-packard enterprise and we have to make sure we have a cost structure that allows us to compete in the marketplace. we still have a little too much overhead. oversaw $110 billion. we hesitate more cost of that. we have to redesign some of our systems, redesign some of our processes to be more appropriate for a smaller, more noble company. we have some cost take-out to do, a lot of innovation coming to market. i want to make sure that lands 10 server.our gen it is the most secure server in the world. everyone knows security is something facing every i.t. department. emily: you urged president trump not to pull out of the paris climate accord, along with other business leaders. .ours later, he pulled out how does that impact our relationship with the president?
>> as you know, i was on the other side. as a lifelong republican, i endorsed hillary clinton. it once president trump won, wrote a note to our employees that said, we need to give him the benefit of the doubt. so we are giving him the benefit of the doubt. there iswe think something that is not in our best interest, the country's best interest, i will speak out. i said i thought we ought to stay in the paris climate accord. generation of industries around clean energy and other things is important for the united states of america. people can disagree. we happen to disagree on this issue. emily: tim cook also told me that he thinks he decided wrong on paris but plans to keep an open dialogue because he thinks it is important for america, for the company. what is your strategy, what is the number one thing on your priority list when it comes to discussions with the white house?
in favor of tax reform. we think the ability to repatriate cash overseas at a lower tax rate is important, a lower tax rate would spur growth in the united states. on the other hand, we are not for the border adjustment tax. that is difficult for companies that import a high degree of their goods. the retailers, technology companies, we think that is not in our best interest, and by extension, in the best interest of the united states. wejust make it clear where stand on issues, very respectful, civil discussions. that is what this country was built on, the ability to disagree without being angry. emily: more of that exclusive conversation with meg whitman next. she updates us on the partnership with microsoft. the u.k. arees in calling for greater regulation of the internet following the recent terrorist attacks but
emily: now back to our exclusive interview with meg whitman. she hit the stage at the annual hpe discover conference saying that hpe is seeing a slowdown in the public cloud. we asked whether businesses are really rethinking their move to the cloud and what that means for hpe going forward. the way we see the world, it is a red hybrid i.t. you have to start with your apps and data. touched by want only your employee hands, what do you want at a private cloud with public economics, what do you want in a managed service? there is a role for public cloud but we are seeing 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 want to bring them back. emily: what does that mean for hpe? do whatmeans we have to
is in our customer's best interest and their interest is all around creating a multi-cloud environment, hybrid i.t. environment where they can have the right landing spot for the applications and workloads. we make sure they don't end up with vendor lock-in. a lot of people say once you move something to the cloud it is difficult to move it back and expensive. we want to give customers choice and make sure we do what is best for them. emily: there have been questions about your cloud partnership with microsoft. how is that going? well, wes really going have done a lot of business with microsoft for many years. they are our public cloud partner. when they say these are the workloads we would like to have in the public cloud, we say azur is a great opportunity. if you want functionality on-prem, you do azur stack which runs on hp inc. year.
has a very good strategy, we are great partners with them. it's about giving customers choice, where do they want their workloads, where do they want their data? if they want a public club partner, we recommend azur. emily: if they start making their own data center equipment, what does that mean for hpe? meg: this is a dynamic industry. for a long time infrastructure was not in fashion but we see all kinds of people getting into the business. if that is what microsoft does, we will try to figure out how to have a relationship around cooperation -- competition. we admire the company a lot, we will figure it out. only: tech stocks have been a tear since the election despite political uncertainty. what are the market dynamics that you see helping or hurting hpe? meg: it's a challenging global environment right now, there are some countries doing very well
and then there is uncertainty in a number of countries, and uncertainty is not good for business. our strongest market in germany germany.ope is but the u.k. is challenged, public sector spending is down, u.k. firms, people investing are holding back because of brexit. that does not mean that they will not spend, but there is a pause. i don't know what will happen here, maybe i should take some through.hink it japan is pretty strong for us right now, australia is coming back. the u.s. continues to be a little uneven. one quarter is strong and then we see some weakness. we have to make it work in every environment, so we sell as hard as we hang can and give customers as much twice the matter what is going on in the backdrop. emily: you have led several high-profile technology companies. i'm curious what you think about the unicorn startups, what you see them doing well, what you
see them doing poorly? the startup scene in silicon valley and elsewhere is alive and well. it is a renaissance of innovation. is a lot of very innovative companies that are unicorn valuations. what we are seeing is the ability of entry capital money to keep funding money-losing startups, we are starting to see a pullback there. one of the reasons we were able to buy simplivity, it was not clear they would be able to raise a next round and they needed to be tucked into a big company. nimble had a great fun browsing round but needed they need to be tucked into a bigger company. we think there will always be unicorns, new companies, but we think it presented opportunity for us as we think about our m&a strategy and innovation strategy. investing is heavily in your vision for the future of computing. how will this help customers in the future, how is that vision
involving? meg: one of the big challenges our industry faces is the demand to build data centers, the demand for safe, 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 a number of years ago to rethink the model of computer. we said, can we turn that on its head and make it a memory-centric compute, instead of through copper wires data is through photos but tonic's. far more energy efficiency and we are please with the progress of the machine. we are embedding parts of the technology into our next storage.n server we are super excited about the amount of data that can be processed with very low power utilization and in a small form factor. it is right on track. we are super excited about it. emily: our exclusive interview
platformsial media are under heavy scrutiny following the terror attacks in london. u.k. authorities went directly after the tech industry saying it needs to step up its work fighting terror. they arecompanies say already fighting terror and need to come up with ways to fly things for removal. caroline hyde caught up with the institute of treating dialogue's ceo in london. and in new york, paul quigley. we have been working to combat extremism of all
varieties for over a decade now both off-line, and now more and more online family have done a lot of work with the internet companies also with the government on the issue. there is a challenge. we see terrace, extremist applying incredibly professionally online. they have a head start. we have seen too little done to compete with that message of hatred online. we see too little or fashionable as a and credible voices that can do a lot to counter the space. in many ways, this is where tech companies can be the most effective and support scaled upscaled endeavors in this space. there is more they can do, they have admitted that. they have committed to setting up an industry body to drive not only counter speech in this space, which is really important, and education, because that is important, too,
but also technological intervention. there is more that can be done to identify and get rid of the most egregious content swiftly. the thing we need to be worried about always is the overstepping of those lines. there is a lot of gray area content. very difficult to identify what in all cases should and should not come down. that expertise does not sit with internet companies. i don't think anyone wants them to take on a full editorial role. caroline: where do you think the battle of the moment is versus tech and government, do you have a view on how the response has been so far? >> when these problems have emerged before, the platforms have responded very quickly. the sharing of different forms of content online, quantifies the data very exactly. what we saw in the u.s. election, a large amount of fake news online. much less in the french election
and even less again in the run-up to the u.k. election. i don't think tech companies want governments to come in, they will race it tried to solve the problems to technological means themselves before the laws get drafted. i think that is the strategy that we will see the point again here. the u.k. government and theresa may is talking tough on this but the u.k. government would also prefer an industry led solution. wherewithale best to dry the technological response, no question about that. they are putting pressure on now to make sure internet companies follow through on the promises and they had made. but there is also something to be said for engaging, for letting certain types of accounts stay up online. we do a lot of work monitoring and identifying extremists prior to that law enforcement phase,
prior to them crossing the threshold to terrorism. there are ways in which we can engage further upstream, those sorts of individuals and make a change. caroline: you cannot then target them. >> the issue is whether we drop them underground too far. there are constituencies that we want to watch and engage with successfully. those engagements have to be done carefully, that have an intimate knowledge with the issue, we work with former extremists who work out -- reach out to them online, use peer-to-peer engagement. internet companies have been very much behind those activities. a major has launched initiative to support counter speech. so has google supported such initiatives, worked on digital how we get young
people understanding how quickly they can fall into the rabbit hole of extremist thoughts of communications online. caroline: paul, firstly, are you optimistic that we can see some , internallynternet bread from the technology side of things, help us spread of extremism online? >> i agree there will always be a gray zone. twitter took the step of accounts,00 some facebook has described it as a hotbed of terrorism. facebook is doubling its moderators. there will always be the gray zone. at one point the supporting a political cause in the middle east bleed into expressing an extreme view? this discussion will not go away. which is why i would say this has to be a partnership between private sector, between the tech companies, and civil society. ultimately, that is the private
partnership needed to really respond to the challenge publicly. emily: that was caroline hyde. a new report out by nielsen shows ratings do not equal social engagement. the company conducted its first social media rating study including data from twitter and facebook to find what shows were getting the most attention. was by farg dead" the most viral show on social media but was only the eight most watched show over the last season. trailing behind that show is "bachelor"d the abc franchise. that does it for the best of bloomberg technology. coming up, our coverage of the e3 conference in l.a. that is wednesday, 5:00 in new york.
carol: welcome to bloomberg businessweek. i'm carol massar. oliver: and i'm oliver renick. carol: this week, some twitter advice for president trump. oliver: a look inside a brazilian construction giant, more specifically, the department of bribery. carol: and why buzzfeed claims to be king of online video. oliver: all that ahead on "bloomberg businessweek." ♪ carol: we're here with the editor in chief of "bloomberg businessweek," megan murray. you spoke with tom barrick. megan: tom barrick is a legendary financier,ea