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tv   Bloomberg Technology  Bloomberg  August 29, 2017 11:00pm-12:00am EDT

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>> i'm emma chandra in new york, and you are watching "bloomberg technology." let's start with a check of your first word news. president trump is in texas to witness the devastation from harvey and the ongoing recovery efforts. he arrived in austin today and corpus christi where harvey made landfall. trump hopes his administration's response to the hurricane devastation will be regarded as a model for the future. governor greg abbott called the white house's response so far very effective. monday he said he would grade the response an a+. vice president mike pence is warning that the flooding will continue. he spoke today in san antonio and corpus christi radio
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station. he will visit the region this week along with his wife karen. , estimates to total damages caused by hurricane harvey continue to rise. research now projects losses of $42 billion, up $12 billion from monday. other analyst estimates are at more than $100 billion, potentially more than hurricane katrina. louisiana governor john bel edwards said his state's offering to shelter storm victims from texas after the state conducts rescues of its own residents. more than 500 people have been evacuated in southwest louisiana. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. i'm emma chandra. this is bloomberg. "bloomberg technology" is next. ♪
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caroline: i'm caroline hyde in for emily chang. this is "bloomberg technology." coming up, north korea's clear and present danger. the un security council schedules an emergency session after another ballistic missile launch. we discussed the reaction from around the world in the plan from the pentagon. plus, expedia ceo dara khosrowshahi speaks for the first time after uber chooses them to take the top job. is he up for the challenge? it has been one of the most recognizable names in the tech industry for decades. we bring you our exclusive conversation with michael dell. first to our lead. a major international story we are monitoring for you. the united nations security council is meeting tuesday to discuss how to handle north korea's latest provocation. on monday, north korea fired a ballistic missile that flew over japan before breaking up. today, u.s. ambassador to the
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u.n. nikki haley called the the launch "unacceptable and irresponsible," adding that something serious has to happen. as for how the markets responded to the launch, stocks fell back across the globe. europe posting the worst losses, while u.s. stocks have just about rebounded. there was an initial rush to safe haven assets like gold, u.s. treasuries. for more, we are joined by lindsay ford. wonderful to have you with us. i want to get the so-called unprecedented, grade, and serious threat that prime minister abe sees. how unprecedented worthies of strikes? lindsay: the latest missile test was definitely an escalation in terms of a provocation by north korea. this was the first time ever we have seen north korea launch a ballistic missile to overfly japan.
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especially for japan, it is a significant and extremely serious threat. i do think we have to recognize that there is a bit of a calibration that north korea was probably doing here. they were quite blunt over the last month in saying they might conduct a test near guam. they didn't. you have to assume they were trying to calibrate what they did in a way that would ratchet up tensions, but at the same time, not cross any red lines that would actually cause the u.s. to initiate any kind of conflict or action. caroline: this is seen almost as a political gameplaying by north korea at the moment. how do we see the response likely to be particularly from the u.s.? what are the realistic options out there? lindsay: i do not think this changes the options the u.s. has all that much. i expect that we will see is another push for further sanctions and tightening of sanctions coming through the united nations.
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there are additional steps they can take beyond these sanctions that were implemented at the beginning of august. they can go after the north korean textile industry and oil north korea's access to oil from , china, which is something that has not been done yet and can be potentially significant. the one a lot of people would like to push for is actually sanctions against entities, third party entities and companies that are doing business with north korea to really try to eliminate their access to other financial systems. caroline: fascinating. i just want to bring in our national security reporter, who is joining us live now. nick, we are monitoring the un -- the un security council meeting as well. what will come out, statements from donald trump himself? taken to twitter yet? [laughter] nick: he has not yet gone to twitter. that is interestingly a story in itself.
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the we have seen from administration on this north korean launch is understated. hopefully what they hope will be a more disciplined approach to a north korean launch. they don't want to lose their head and go half cocked. we have heard this is attributable to the chief of wants andn kelly, who interagency process that harkens back to what you would have seen in past administrations. i spoke with someone at the state department today who's said this is how normal , governments do things. when north korea does something like this, you consult with allies as secretary of state rex tillerson did and president trump did. you get on the same page and release a unified message. that is likely what we will see from the council today. caroline: you were outlining perhaps how we will see yet more sanctions coming north korea's way. but what about japan's reaction to this?
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they have felt maybe at the time they can start building their own military force in respect to this. lindsey: i think it will amplify voices within japan and strengthen abe's decision to push for a more muscular japanese foreign-policy. further push for perhaps increased defense spending. certainly more ballistic defense. there is an ongoing argument about whether japan should seek out offensive strike capabilities, which it is not able to do right now because of constitutional restraints. i think it will further expand that argument. caroline: talk to us about the balancing act going on with the white house. they do not have just one international crisis going on at the moment, but there is a domestic one as well. we have seen donald trump in texas.
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how is he managing to nuance his words? has he responded to questions about north korea at this event? nick: so far, he has responded to shouted questions just by saying, we will see, we will see. the administration is trying to do something a little bit different. in the last month or so, they came up with a very detailed north korea strategy for how to respond to certain threats and certain actions. they essentially have a game plan in place now. this is sort of the first foreign-policy issue around the world where they really have a sort of ladder of steps. if north korea does x, the u.s. will do y. we have been speaking with administration officials all day, and they say this is going so far according to plan. north korea did something that the united states suspected it might do at some point. now you are seeing the response. the closed session of the security council a relatively understated response so far. hopefully a response that will then move to increased economic pressure, which the united states still sees as the main path forward.
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rex tillerson's peaceful pressure campaign really uses china as the conduit to strangling the north korean regime's economy and hopefully bring them back to the table for negotiations. caroline: fascinating analysis from you both. thank you very much indeed. lindsey and bloomberg's nick, great to have you with us. now, as tropical storm harvey continues to inundate the texas gulf coast, facebook is offering ways for users to contribute to relief efforts. facebook announced today it would match the harvey disaster relief fund up to $1 million. whole foods announced it will bring donations made by the website of the red cross. $100,000 pledged to the organization, and more will come. expedia ceo dara khosrowshahi
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speaks for the first time since his name was floated for the ceo role. why he says this is "a once-in-a-lifetime opportunity." this is bloomberg. ♪ caroline: now a story we are
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watching for you. google will comply with europe's demand to change. they are bowing to regulatory pressure to avoid more fines. they said the deadline to how they plan to stop discriminating.
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google said it is sharing the plan with regulators. if google did not submit a plan to the e.u. by the deadline, it would have daily fines on top of its record $2.7 billion penalty issued earlier this year. if it did not comply, that is, in a month's time. now to a developing story. the justice department has begun to review allegations that uber may have violated the foreign corruption act that bribes foreign officials. we are joined by eric newcomer, who covers all things uber. a breaking story. or manye country countries where bribes are potentially there? eric: there are a lot of questions we do not have answers to at the moment. it is never a dull day in the world of uber. i think this is the second justice department related inquiry.
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we also have the effort to hide uber drivers from law enforcement officials. here, we do not know exactly the focus of the inquiry. we know that uber is cooperating and we will be getting more details as soon as i get off the tv. working on it. caroline: certainly. justice department, they are not giving any statements either. eric: right. caroline: we will see how that unfolds. they have had many a challenge. a silver lining that a new ceo has been announced. well, has not been announced, but certainly was on the table. we hear from the ceo of expedia who is likely to be coming to uber as ceo, dara khosrowshahi, and it looks like he is up for the challenge, but not unaware of some of the challenges that do indeed face him. eric: right. he has the opportunity of a lifetime. at this point, barry diller
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acknowledged he will accept the offer. our services have been saying that. uber is just dotting the i's and crossing the t's. to your point, he talked about diversity a little bit. expedia seems to have done better than uber at least in terms of recruiting female software engineers. definitely something uber needs to improve on. sort of took a tone of, i need to take in the situation, but he talked about broadly the problems in the industry in terms of diversity and inclusion. caroline: certainly top priorities for him. this feels almost endless, but this feels almost endless, but notably, he has to get himself a cfo, cmo, top executives. eric: shoring up your executive team has to be a top priority. he understands the importance of getting a high profile person in that position. at first, the company already said they want to hire an
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independent board chair to sort of bring a fresh perspective and independence to the board. i think that is going to be important, but obviously he will have to do that in cooperation with the existing board. like you said, there are some any vacant positions. they definitely need more top engineering talents, top operations talent. filling the team will be a top priority. caroline: what about the ongoing saga that is the battle between benchmark capital and travis, who was previously the chief executive? that sideline show does not seem to be going anywhere. eric: yeah, exactly. it is a huge fight going on and missed all of these other issues. i think there is another hearing tomorrow. there is a question of whether travis will be able to bring this case to a private arbitration which would take it out of the headlines a little bit. right now, it is benchmark, uber's largest investor.
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against his former ceo with allegations of fraud, asking travis to relinquish his three board seats. while the former ceo of the company wants to hold on and have sort of a big role on the board going forward. that is an issue that the not get resolved as many people hoped it would as a result of the ceo search process. caroline: this ongoing feud going on in the public arena between the previous ceo and the investor, the top investor of uber. you have now to be unveiled breaking news the department of justice is investigating, looking into potentially whether they violated bribery laws. you have the ongoing need to hire executives. is dara khosrowshahi up for it in terms of capable? the people you're are talking to, is there a sigh of relief? is he the right man for the job? eric: he is not the titan of
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industry that meg whitman or another would have been. but there is a lot of confidence. this is a guy who ran expedia very capably for i think 12 years. he has deep connections in government, outside of them, and has the expertise to work with government and try to bring uber sort of back under control and in-line with regulators and the law. i think he definitely understands. he has to understand that is a major challenge he will face as ceo and clearly something that he has some capability to handle. caroline: opportunity of a lifetime as he called it. it is never a dull moment as you say. we will let you get back to the breaking news. thank you very much, eric newcomer. coming up, apple's growth this year has led to a massive payday for ceo tim cook.
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we will break down how the competition stacks up to other tech leaders this year. a feature i would like to bring to your attention is on your interactive tv function. you can find it on the tv on bloomberg. you can send our producers a message along with a chart. this is for bloomberg subscribers only. check it out, tv . this is bloomberg. ♪ caroline: shares of apple have
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hit a new all-time high today. a record cap of massive growth in stock price this year, which is 40%. and it could have further to run with the average price target for the stock among analysts still sitting ahead at $174. meanwhile, apple's stock success
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this year has helped bring tim cook's compensation to new heights. last week, he was awarded shares, nearly $90 million. cook's total awarded compensation was $150 million last year compared to $72.9 million in 2015. for more details on cook's payday, let's bring in our guest who wrote about the topic from -- for bloomberg news. fascinating. talk to us about how the compensation is done for tim cook. explain the structure. in some ways, he voted for it himself. >> yeah. apple has a special set up with tim cook. when he came into the ceo role, apple said, we will give you a massive chunk of stock that you will get in two increments of 10 years worth of to $370 million at the time. a couple years later, it was restructured and split up over the years.
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so cook in a typical year can collect about 280,000 shares as long as he remains on the job and another up to 280,000 shares it apple's share price beats other companies in the s&p 500 index. and they did, so he collected all those shares. caroline: wow. i am looking at the pay go function on bloomberg. you can see how he really is highflying. number two at the moment in terms of where he stood previously. talk to us about where tim cook stacks up versus the rest of the tech ecosystem with this new competition being handed out. anders: in the bigger scheme of things, it is almost absurd that even tim cook's figure, which is really high, does not hit the ceiling when it comes to paying -- pay in the tech sector. we have seen walmart north of $200 million in 2016. prior to that, we have another who every year gets stocks from google.
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even though apple's cook gets quite a bit of money, it still does not tend to be at the very top among those guys. caroline: nothing like a little bit of m&a to help the likes of lohr over it walmart. talk to us about whether or not this will be sustained. will we see tim cook's compensation tied to the share price performance? should it be perhaps tied to another critical measurement? revenue, for example? anders: that is a frequent debate among pay consultants and people in the boardroom and the executive suite. is share price really a best measure of performance? some say you should focus on internal metrics like revenue or product development, which will in turn drive share price, share price being the ultimate goal, but that is not the journey to get there.
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the way apple's award for cook is set up, it is tied to share price. the board can change that. it has been successful both for shareholders and cook himself. i would not say that i see any change is coming in the near term, but who knows? caroline: how does it fit with those who work at apple, with the general public? i am speaking from london where there was so much handwringing and general public outcry when you see ceos pay significantly -- paid significantly more than the average employee and the average person on the street. how is it absorbed in america, where it is a little more of the land of those that can make it? anders: making a lot of money is not seen as a bad thing in the united states of america. we know that.
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cook got a bit of a push back for his compensation when he first signed on with a large $370 million award. it was at cook's request that part of these shares would talk to the company's share price performance and if the shares do not beat at least two thirds of the companies in the s&p 500, he gets fewer shares. thus far, apple shareholders, if you have been an apple shareholder, you have been doing quite fine. in the bigger scheme of things, people in the tech sector tend to get more of a carte blanche when it comes to it as opposed to other sectors such as banking. caroline: tim cook says he will give most of it away. thank you very much. great reporting as ever for us. coming up, we bring you an exquisite conversation with dell chairman and ceo michael dell.
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his thoughts on the future of the cloud, next. check us out on the radio. you can listen only bloomberg radio app,, and in the u.s. on sirius xm. this is bloomberg. ♪
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singapore. i am haslinda amin with the first word news. the un security council has condemned north korea's latest missile launches outrageous and repeated demands for them to stop. the council met and pyongyang said it would continue to do so to contain the u.s. territory guam. president trump said all options are and that pyongyang has shown contempt for the international community. japan retail sales growth beat expectations in july, indicating a recovery may be coming.
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they are more willing to open up their pocketbooks. they almost doubled the median forecast. and that department stores supermarkets declined 2/10 of 1%. bloc should hold the market risk because the u.s. commitment is weakening. the banking federation says they have dropped the numerals on trading and funding will be reconsidered. it has spurred questions about washington support. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. >> i am sophie kamaruddin with a check on the markets. we have bonds falling, the hang seng leading asian equities higher.
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of 3400.0 points shy the yen is on the back for the second day. dollar weakness helping support. the yuan jumping after a stronger fix. --est construction dater at data at .80. new zealand shares on the up and the kiwi dollar has swung to gains after the rbnz said it would be lower. despite the career risk taken off the table, it is gaining ground as north korea warns of action. and this index at two-year highs. gaining over 5%, the most since june 26. china merchants at a record.
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shanghaiplans for a sale. they were upgraded to buy at city. that is falling after their first results losing this morning in hong kong. caroline: this is "bloomberg technology," i am caroline hyde. vmworld has kicked off in las vegas. it is one of the top offense. earlier, emily chang caught up chairman and ceo michael dell in an exclusive interview. emily started by asking what he was most excited about. take a listen. are seeing is the emergence of this multi-cloud world. customers are figuring out that cloud is really not a place, but a way of doing i.t.
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they are modernizing, automating, existing on premise infrastructure, and also leveraging the public cloud, services and software as a service. vmware is incredibly well positioned with what it is inventing to enable that new, connected future in a secure manner. >> when you say multi-cloud you say public and private? you think hybrid cloud is a way of the future? >> i think customers are adopting i.t. in a hybrid fashion. all of the customers we talked to are already using many different modes of i.t., and when you imagine forward to the future of an enormous number of connected devices, as the cost , you will have a distributed computing world that is far more vast than what we have today. >> talk to me about some of the partnerships. vmware partnered with amazon a
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year ago made it official, , and also with google. what is the impetus to partner with what could be considered your enemies? >> the partnership with them is about bringing together the number one private cloud with the number one public cloud, that gives customers great flexibility to be able to softwaretheir vmware and capability on a public cloud environment. with google, we are bringing together pivotal and developer-friendly capability that pivotal has brought to half of the fortune 500, with a platform that google has created as a cloud operating system, and put it on the open-source community, bringing that all to the 500,000 plus customers that vmware has an eight secure manner with nsx, creating that kind of developer friendly infrastructure that
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allows companies to develop these next generation apps, put them in containers and deploy them. this is exactly what customers are asking us to do. >> you have any concerns that public cloud owners could still -- could steal your private cloud business? >> what i see is that when a new things happen in the industry, if they are good for customers -- if you stand in the way of those, you will do so at your own peril. first camehen vmware out as a tiny company just starting dell ,was the first server vendor to embrace vmware. we sold fewer servers at the beginning because you could virtualize the server, but we ended up selling a lot more could imaginee and now we are number one in the world in servers and growing in
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double digits. so, i think that when customers want different modes of i.t., when they want the public cloud in addition to the private cloud, it is important for us to listen and bring those capabilities to our customers. >> so when it comes to the amazon deal, or the google deal, how can dell use that deal? and pivotal are both part of dell technologies. combining all of our sales force across the company, our channels, we will be bringing those capabilities to all of our company -- customers. one thing we have seen in the combination is, this idea that customers actually do not want to have more partners, they want fewer partners. number one and everything in one place to our customers, we see a fabulous response. revenue synergies greater than
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we thought coming faster than we thought. this because we brought ability. emc, vmware, go together like peanut butter and chocolate. caroline: that was bloomberg's emily chang speaking with the ceo of dell. meanwhile, showtime is being sued for problems with its live streaming during the blockbuster boxing match between floyd mayweather and conor mcgregor. the lawsuit claims that the five provided through its paper view up did not provide clear access to view it despite paying the full fee. the suit is seeking either $200 or recovery of actual damages. it was available to order on -per-vieww -- pay online without , requiring the tv subscription of showtime. now coming up, it is turning into one of the most hotly contested investing debates this year, as the valley of the corn
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-- as the valley of bitcoin continues to rise. this is bloomberg. ♪
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caroline: it is another day, another new record for bitcoin. the cryptocurrency is trading above $4500 for the first time. is it a haven amid geopolitical stability, or is it a bubble? we talk about it. i am joined by the managing director from san francisco.
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they claim to be the vc first fund invested in many --ding companies incurring invested in many companies. wonderful to have you joining with us. record high? is it a bubble, is it haven status, is it going to get any higher for bitcoin? >> is it a bubble? short-term, maybe. long-term, definitely not. we have a bunch of assets that are up anywhere from 4, 10 to maybe 100 x. but a majority of people have never participated in the ico. so it is still early. the more we could see generic investor, retail investor, get ability to access this asset class that much easier. etf launched of an
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by gemini. how do you see the broadening of access to this investment class? >> i think you will see some more regulated and more institutional focused investment product. earlier this year i was a big bear on whether etf would get approved. i switched my position. we will see a fully regulated derivatives market rolling out for bitcoin in the second half of the year. if not latest by first quarter next year. that will pave the way for a bitcoin etf as well making it a , lot more accessible for investing institutions. the average everyday person on the street can already do this, anyone with a smart phone can participate. blockchain capital did its own ico. 80 different countries in the world. caroline: your own ico, you released your own tokens. what about the ico market?
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be u.s. said these would regulator bold securities. how does that affect to the plethora of ico's that we see coming from the market? spencer: i think overall it is welcomed. we have been looking at this and seeing something that is wonderful universally empowering , technology allowing people to participate on a global scale. that is a good part of it. the bad side is that the market is attracting a lot of the penny stock pumpers, and outright scammers as well. so the sec showing that they are paying attention, is overall a good signal for the market and we have seen similar moves across the world from other financial regulators. caroline: as someone has a smart -- smartphone at the ready, wanting to get into this particular asset class, tell me how i would go about doing that? and also tell me how i would make sure that i am not duped by the scammers that are out there and buying the wrong ico, had
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-- how do i make sure i am reading the right white paper? spencer: you do have to be careful, there are a lot of websites that provide a list of upcoming ico's. one i would recommend is smith and crown. watch for important signal such as watching capital. our firm or any other large brand names in the space, you can assume it is the check mark of due diligence. understand the team background and make sure they will not run away with your ico cash. caroline: what about the ongoing industry potential change that we're going to see? this is all underlined by block chain capabilities. this is something that could revolutionize the way the government's keeps records, the energy industry for example, the way it is deployed.
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how will we see blockchain or the actual technology revolutionizing the way in which we work? spencer: for one, we are already seeing the way it changes the exchange of money and assets. we are seeing some pretty exciting projects being announced over the next coming weeks, one of which uses tokens to incentivize a secure network that could provide a more private and secure internet around the world. we are talking about the type of network the might be able to bring wikipedia to china en masse. a truly global and free internet. caroline: i am also seeing the whopper coin! i do not know if you saw it on twitter. apparently russian burger king is launching its own token. one of the more ridiculous features in which we're seeing ico's being deployed. how ridiculous could it get? spencer: it is anyone's guess.
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it is attracting a lot of different people that are trying to put a claim on this. i think the whoppercoin announcement from burger king russia was one of these incidences. i know it has been a big headline grabbing think outside the industry but it is not getting as much circulation within the industry. lockchain,ou work at the virtual capital fund in first 2013, in cryptocurrency. we saw the first bitcoin slump and concern in 2013. when do you see it going mainstream, when will i be able to discuss this with my parents? spencer: it is already happening in a large respect. even a year ago, as someone who has an at the super bowl for a long time, i did not imagine how quickly the sentiment to change. -- could change. a year ago, people were still skeptical, trying to answer a couple of questions. now people are saying, they get that there is something here, but they do not quite understand it, but i am 90% of the way
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there. when i have conversations about it, everybody wants to ask me about it. uncles, nephews, and i think as we start to see more mainstream investment products, like in etf's, and as banks start offer more cryptocurrencies. it is been great having your analysis and experience, managing director of blockchain capital. the workplace start of has big plans to take on wework. a quick programming note this wednesday. david westin will interview on wednesday warren buffett. you can catch that conversation at 11:00 a.m. eastern time. this is bloomberg. ♪
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caroline: domino's is about to s appetitescustomer' for driverless deliveries. the pizza chain is laboring with ford motors to do a test program in their hometown of ann arbor, michigan. during the test there will be a driver at the wheel, but with blacked out windows, and they will not be interacting with customers. when the car arrives, users will use a pin code to unlock the back window and retrieve their pizza from a heating compartment that stores the food for transport. how the will capture customer receives the order. domino's says the goal is to see if they like the idea of being physically able to get their pizzas from the car. the joys of technology. competition in the shared office market is heating up. one startup with lofty goals is providing offices in various locations across new york and san francisco. they received a close to funding
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$25 million round. with its biggest competition wework, showing no signs of slowing down, we -- do they have what it takes to go the distance? joined by the ceo. come a what ist your distinguishing factor when it comes to me looking for an office? why would i go to you rather than wework? >> it depends if you are a real company. it is a super old idea. suites might share together. if you are 50 or 100 or 200 people you do not want to sign a lease with all the building management issues. you want to focus on your business and let someone else provide you the headquarters. that is what we do. caroline: it is bigger. what about cities, your
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expansion plans -- that $25 million is being put to work. >> we have been growing so fast in just the past two years. 2015arted at the end of and now we are at 25 locations in new york, nearly half a million square feet. i'm here to talk to you guys in san francisco and announce we're launching in san francisco as well. our first location will be at 5th street and mission, and we will hopefully have a lot more. caroline: you have the lofty aim of becoming the number three provider, more than one million square feet leased by 2017. how is that going? >> it is going great. the nature of the business, what changed in real estate in the last 10 years is that it became possible to use the ideas of e-commerce and marketplace to get things like homes and residences under control. the first generation of the internet did nothing for how you bought a home, but that transformation starting now -- for probably 100 years, people
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have been sharing offices in london, and up to this moment, still, less than 1% of the global office space is flexible. flexibility is the thing that everyone wants. the lease is the taxing medallion of the renting services, and there will no longer believes is in times to come. it is going to be real companies who do that and those are the companies we serve. caroline: interesting you mention london. london has just been announced as the number one demand for office space in the moment, not coming from the banking for tech sector, but coming from the flexible office provider, from co-working providers. are you going to go internationally, coming to london? >> we will be there very soon, and in person and on stage. there are a bunch of cities in the world that are super cities and each are worth tens of billions of dollars of revenue each year. we started in new york and doubled and kept on growing. after a while we thought, we
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could put 100 times the business just in new york and not even scratch the surface. the markets are that big. in the months to come because the market is so ready for change there is nobody even close. the biggest and oldest players like australia and regis in those guyswework, are big. everyone is so far behind, i think we are the next one. caroline: do not serve smaller clients at all? do you have to be of a certain size to access what you are offering? companies, you take a floor and we make it sing and dance beautifully so it is your culture, your brand, what you want to present your investors, staff. when a smaller company says we are starting a business and growing, should i go to a co-working place? i said, no.
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come here and work for free. anybody who contacts me, we find a place for them and before you know it, they are running multiple floors in buildings in manhattan and hopefully san francisco as well. caroline: need money? >> the vastness of our ambitions, we have only just begun. we are building a vast mobile enterprise. this category of real estate is so colossally huge, when i hear comparison made between knotel and something that exists i , point out that 90% of the market is not flexible. it is old-fashioned leases with a fragmented list of owners. even the biggest owner you have ever heard of his tiny. so there will be hundreds of millions of square feet that are knotel. yes, we will put it to work. caroline: interesting stuff, thank you and good luck with your san francisco expansion. that does it for this edition of bloomberg technology. on wednesday, we will bring our exclusive conversation with the financer of vmware.
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