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enterprise| enterpriseauthorTom KrazitNoneAre you keeping up with the latest cloud developments? Get Tom Krazit and Joe Williams' newsletter every Monday and Thursday.d3d5b92349
December 9, 2020
Top Salesforce and Slack executives have laid out their vision for how to integrate the two companies following last week's much-publicized $27.7 billion acquisition.
The discussion took place on Tuesday at Salesforce's annual investor day and included remarks from Salesforce CEO Marc Benioff, Chief Operating Officer Bret Taylor and Chief Revenue Officer Gavin Patterson, as well as Slack CEO Stewart Butterfield.
According to research from analysts at RBC Capital Markets, highlights of the pending merger discussed by the execs include:
- The ability for Salesforce customers to input data in their customer relationship management software directly from Slack.
- A more robust version of Slack Connect, which allows users to talk to people outside their immediate company. Contracts, for example, can be signed and shared by connecting Slack Connect and DocuSign. This idea signals ambitions for Slack to become a platform used in virtual business negotiations.
- While Salesforce previously acquired workplace productivity startups Quip and Chatter, the company intends to have Slack serve "as the future center point of the communication/collaboration offerings," per the analysts.
- As companies increasingly look to digitize their customer service function, the execs argued that Slack could serve as the conversational platform for those call centers.
- From a sales perspective, executives say Slack will benefit from Salesforce's robust network of enterprise connections, while Slack's "self-serve" sales model could help in "re-strengthening the virality of the Salesforce platform," per the analysts.
- Combining the capabilities of MuleSoft (which Salesforce purchased in 2018 for $6.5 billion) and Slack, Benioff sees Salesforce becoming the "single source of truth for customers." MuleSoft provides APIs, the tool used to connect applications to one another, while Slack will serve as the platform to connect people.
Joe Williams
Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
Power
Yes, GameStop is a content moderation issue for Reddit
The same tools that can be used to build mass movements can be used by bad actors to manipulate the masses later on. Consider Reddit warned.
WallStreetBets' behavior may not be illegal. But that doesn't mean it's not a problem for Reddit.
Image: Omar Marques/Getty Images
January 27, 2021
Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
January 27, 2021
The Redditors who are driving up the cost of GameStop stock just to pwn the hedge funds that bet on its demise may not be breaking the law. But this show of force by the subreddit r/WallStreetBets still represents a new and uncharted front in the evolution of content moderation on social media platforms.
In a statement to Protocol, a Reddit spokesperson said the company's site-wide policies "prohibit posting illegal content or soliciting or facilitating illegal transactions. We will review and cooperate with valid law enforcement investigations or actions as needed."
<p>It's still unclear whether any such investigations will result from this, and White House press secretary Jen Psaki said that Treasury Secretary Janet Yellen is "monitoring" the situation. But the fact is, Reddit writes lots of site-wide rules that have nothing to do with whether certain behavior is illegal. Reddit is <a href="https://www.protocol.com/reddit-powermods-war" target="_blank">unique among platforms</a> in that it leaves much of its content decisions to the moderators of different subreddits. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>Still, the company does have rules. It <a href="https://www.reddithelp.com/hc/en-us/articles/360043071072" rel="noopener noreferrer" target="_blank">prohibits</a>, for example, "directing unwanted invective at someone" or "following them from subreddit to subreddit," classifying that as harassing, bullying behavior. Redditors aren't allowed to send "large amounts of private messages to users who are not expecting them" or repeatedly post "unrelated/off-topic/link-farmed content," because, under Reddit's <a href="https://www.reddithelp.com/hc/en-us/articles/360043504051" rel="noopener noreferrer" target="_blank">rules</a>, that's spam.</p><p>That means if Reddit decides that what r/WallStreetBets is doing is dangerous or disruptive, it could very well take action. That would be tricky for Reddit. Given the range of offensive stuff that regularly appears on the platform, it could be tough to justify outlawing stock trade tips. So far, that hasn't happened, and the Reddit spokesperson was unable to comment on whether any content policies related to the GameStop issue might be implemented in the future. Reddit co-founder Alexis Ohanian, for one, seemed unconcerned in a Twitter <a href="https://twitter.com/alexisohanian/status/1354407436732387335?s=20" rel="noopener noreferrer" target="_blank">thread</a> Wednesday. "It's a perfect storm at a time when lots of people are hurting, interest rates are so low, inescapable student loan debts loom, and every major institution has caught Ls during a /global pandemic/ over the last year," Ohanian wrote. "This is something to believe in."</p><p>That may be true for now. But experts on social media manipulation argue the model WallStreetBets has created could morph into a bigger long-term problem for Reddit. "The WallStreetBets manipulation of [GameStop] is now the best template for how one could monetize an influence operation," <a href="https://twitter.com/alexstamos/status/1354499573209653251?s=20" rel="noopener noreferrer" target="_blank">tweeted</a> Stanford researcher Alex Stamos who, as Facebook's former chief security officer, worked on detecting and rooting out foreign influence operations after the 2016 election. "I don't know if any laws were broken this time, but Reddit now has a problem: it is the home for a community of hundreds of thousands of people who have demonstrated the ability to move billions of dollars based upon the urging of, at most, a couple dozen anonymous accounts."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>Facebook's current chief security officer, Nathaniel Gleicher, agreed with Stamos, <a href="https://twitter.com/ngleicher/status/1354517057673392129?s=20" rel="noopener noreferrer" target="_blank">tweeting</a>: "Good reminder that while political [information operations are] a serious threat, there are many harmful cases of these tactics driving financial gain."</p><p>Gleicher added: "[Money] is a driver across security threats, from hacking to phishing to good old bank fraud, & [information operations are] no exception. Getting ahead of how these tactics enable fraud is essential to disincentivize bad actors."</p><p>To be clear: There's no evidence that the GameStop mob has any ties to a malicious influence operation, and aside from some hedge funds that tried to short GameStop in the first place, it's not immediately obvious who WallStreetBets is hurting. What are hedge funds anyway if not an institutionally sanctioned pool of people betting on the success or failure of businesses for profit? For now, it's easy to root for the underdogs banding together to stick it to the man. </p><p>But one thing that seems obvious from the last decade or more on the internet is that the same tools that can be used to build mass movements — be they political or financial — can be used by bad actors to manipulate the masses later on. If and when that happens, Reddit will have few excuses for not being prepared. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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Issie Lapowsky (@issielapowsky) is a senior reporter at Protocol, covering the intersection of technology, politics, and national affairs. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University’s Center for Publishing on how tech giants have affected publishing. Email Issie.
Protocol | Enterprise
Inside Christian Klein’s determined bid to remake SAP
The 40-year-old, first-time CEO has a tough road ahead of him in turning around the nearly 50-year-old vendor.
Christian Klein became SAP's sole CEO in April.
Photo: Picture Alliance/Getty Images
January 22, 2021
Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
January 21, 2021
On April 19, the day before SAP announced that Christian Klein would take over as sole CEO of the German software giant, his wife joked that she was going into labor with their second child.
That joke became a reality at 2 a.m. the next day.
<p>After rushing to the hospital, Klein left his wife at 7 a.m. to go to the press conference for the announcement, then answered press questions at SAP's headquarters. He returned to the hospital and missed the birth of his daughter by just 10 minutes. </p><p>It's a story that will surely be recounted for years to come, not least because it showed Klein's dedication to the company — perhaps unsurprising, given his 20-year tenure at SAP — but because it displayed just how consequential the announcement was. Klein is in the midst of one of SAP's biggest transformations in its nearly 50-year history, one that could someday draw comparisons to Satya Nadella's turnaround of Microsoft or Shantanu Narayen's pivot at Adobe. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>Whether it will be as successful as those two efforts remains to be seen. But Klein is banking his legacy on turning SAP into a power player in the cloud industry, with the ultimate goal of its tech underpinning all operations within an enterprise, with the data from each flowing seamlessly between applications and AI-backed tools layered over the top. </p><p>It's a major about-face for one of the hallmark providers of on-premise enterprise software. And he faces no shortage of critics who doubt whether a 40-year-old, first-time CEO can turn around such a large organization at the necessary speed. </p><p>"When you are doing something for many, many years … people, of course, ask: Why do we now need to change," Klein told Protocol. "The technology and the products, we will get that done. The mindset, to have a sense of urgency and need for change, that's key … but there are still parts of the company that need to get better." </p><p>That may be an understatement: Achieving his goal likely requires a revamp of the entire organization, from the way its employees are incentivized to the way its divisions work with one another.</p><p>Take, for instance, its sales team, perhaps the most visible part of the transformation underway at SAP. In the past, it tended to work alone, and relied on sometimes weeks-long HQ visits to pressure clients to sign multi-year, multi-million contracts. But that strategy was rocked by both the pandemic and the broader desire within corporate America to deploy cloud-based offerings.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>Now, Klein is overhauling the sales team's incentives: It used to receive 20% of its commission based upon how many other add-on services a client purchased, but he says that 20% is set to rise substantially as the company prioritizes selling existing clients on the broader SAP suite of products, a model often referred to as "land and expand." And the CEO says that the shift will involve the sales team working far more closely with the deployment teams.</p><p>In a sign of just how critical a revised sales strategy will be to Klein's vision, he recently remade the board to appoint Scott Russell as the new chief customer success officer. The organizational shift also extends to the product team, which is slated to work more closely with the sales team under newly-appointed Chief Marketing Officer Julia White, who led efforts to promote Azure at Microsoft. </p><p>"It's the final piece of the puzzle," Klein told reporters recently. </p><p>While still early, there are glimmers that show Klein's strategy — including changes like these, as well as others happening quietly behind closed doors — is beginning to work. In SAP's most recent earnings statement, for the three months through December, cloud revenue grew to $2 billion, while its cloud backlog increased to $7 billion. As to be expected in the pivot to cloud-based offerings — which are typically based on a three-year subscription model versus the large, up-front payments that SAP used to rely on — software licenses dropped 11%. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>Outside of earnings, Klein is working quickly to shore up support from other industry giants. The company, for example, is slated to announce later this month a closer partnership with Microsoft to help SAP's on-premise customers move to the cloud. "The leading business capabilities of Microsoft are coming together with SAP," Klein teased. </p><p>And behind the scenes, customers appear to be noticing: Last year was the first time since 2017 that the firm's customer satisfaction score was positive, per Klein.</p><h2>The full 360?
</h2><p>In the meantime, SAP isn't without its doubters. </p><p>When Klein announced in October that SAP would rescind its prior financial guidance, a decision that came about after internal financial projections estimated as much as a 4% decline in profit margins if external factors stayed constant, <a href="https://markets.businessinsider.com/news/stocks/sap-stock-price-2020-outlook-downgrade-2020-10-1029720099" rel="noopener noreferrer" target="_blank">the company's stock plummeted</a>. It was a major move for the newly-appointed CEO, one that signaled a desire to focus on the long-term transformation versus short-term margin optimization — basically the opposite of what many shareholders are seeking — and just how seriously he was taking the task ahead. </p><p>"It was clear to me that the market would not applause for that because we just told them, 12 months ago, a different kind of story," said Klein. But, he added, "in that moment, you should not care so much about how much trouble you are in."</p><p>The lambasting extends beyond just investors. In early 2020, for example, Marc Benioff <a href="https://www.bloomberg.com/news/articles/2020-10-26/salesforce-s-benioff-says-sap-s-troubles-are-unique-to-them" rel="noopener noreferrer" target="_blank">opined about the difficulty SAP was having</a> in transitioning from former CEO Bill McDermott to co-CEOs Klein and Jennifer Morgan. (Morgan left in April and eventually joined private equity firm Blackstone.) And at key competitor Oracle, co-founder Larry Ellison keeps claiming without evidence that the company is stealing major customers from SAP, a nod to its struggles in transitioning clients to the cloud. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>Klein ignores much of the criticism and instead is banking on the results speaking for themselves. SAP, for example, is now replacing Oracle at biotech giant Gilead, the type of proof of "customer wins" that Ellison has yet to provide — at least publicly. </p><p>Now, as Klein presses on with his vision of making SAP an end-to-end provider for customers, able to provide software across all of a corporation's various business units, one can start to see the influence it could give the company in the modern IT stack. If he gets it right, it's not hard to imagine SAP outperforming Salesforce's penetration within enterprises. </p><p>Salesforce, for example, regularly touts its Customer 360 offering, a platform designed to oversee all client information stored within an enterprise. But the data available to Salesforce is limited by its own offerings, the bread-and-butter of which is customer relationship management software, a front-end tool that was historically catered to a company's sales team (though that is changing as Salesforce <a href="https://www.salesforce.com/news/stories/introducing-salesforce-industries/" rel="noopener noreferrer" target="_blank">expands to other industry verticals</a>). </p><p>As customers wade deeper into the SAP ecosystem, though, tapping its tools to support operations such as supply chain, procurement and human resources, there's the potential to <a href="https://www.reuters.com/article/sap-crm/caught-short-by-salesforce-sap-targets-front-office-market-idUKL5N1T71ZZ" rel="noopener noreferrer" target="_blank">link back-office tools</a> like an <a href="https://www.protocol.com/enterprise/sap-oracle-fighting-startups" target="_self">enterprise resource planning system</a> with front-office applications such as a CRM platform. In theory, that could mean when a customer purchases Dell laptops from an online marketplace such as, say, Ariba, the order is automatically sent to SAP to fulfill and a tracking notice is immediately provided to the customer so they know where the product is — something SAP refers to as a "procure-to-pay" system. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="5">
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</div></p><p>"This is really a secret sauce where SAP can come back really strong," said Klein. "With us, you really have the 360 [degree view]." </p><p>That position becomes even more powerful if the data is unified, which would give customers the opportunity to deploy powerful analytics capabilities across entire operations and enable SAP to layer on AI to help automate some processes. Right now, such an application is not feasible in many organizations because information is often stored within the different pockets of an enterprise. And the reality is that companies are going to use many vendors, so while they may tap SAP as an ERP provider, they might still use Workday for HR or <a href="https://www.protocol.com/enterprise/coupa-sap-oracle-saas" target="_self">Coupa for corporate spending</a>. </p><h2>10% integration, 90% innovation </h2><p>Still, SAP's work with the automotive industry is an early signal of what's to come. </p><p>In September, it launched <a href="https://news.sap.com/2020/09/bosch-and-sap-automotive-industry-next-generation-capabilities/" rel="noopener noreferrer" target="_blank">an alliance with Bosch, BMW and other industry players</a> to share more data among the cohort's participants. The venture, which was likely only feasible given SAP's dominance in the sector as an ERP provider — it counts companies like Mercedes, Porsche, Toyota, Ford and others as customers — is <a href="https://www.automotiveworld.com/news-releases/strategic-partnership-bosch-and-sap-aim-to-simplify-corporate-processes-with-a-new-standard/" rel="noopener noreferrer" target="_blank">bringing together what is often disparately stored information</a> between suppliers and manufacturers with an ultimate goal of improving production capabilities, from procurement of raw materials to the building of the actual car. Such a partnership could <a href="https://cloudwars.co/sap/sap-ceo-christian-klein-ready-to-drive-the-digital-revolution/" rel="noopener noreferrer" target="_blank">theoretically be broadened to other industries</a>, like <a href="https://www.protocol.com/enterprise/sap-moderna-pfizer-covid-vaccine" target="_self">pharmaceutical manufacturers</a>. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="6">
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</div></p><p>But the work to achieve such a vision will have to extend far beyond just pivoting to new cloud-based offerings. Right now, for example, SAP has many applications running independently, which immensely complicates the task of unifying the data. A key hurdle is integrating the various companies that Klein's predecessor McDermott purchased during his tenure, including Callidus, Concur and Qualtrics, the latter of which is <a href="https://www.cnbc.com/2020/12/28/qualtrics-files-s-1-aims-for-valuation-of-up-to-14point4-billion-in-ipo.html" rel="noopener noreferrer" target="_blank">being spun out via an IPO</a>. </p><p>Previously, if an HR department wanted to use both Concur and SuccessFactors, it would have to run the applications separately, meaning data from one would need to be manually entered in another. In Klein's vision, the two would operate together, where the information in one would instantly flow to the other. Now extend that to all the other verticals that SAP works in, and you're thinking on the same scale as Klein. </p><p>"Over the last 10 years, we acquired products but we really didn't stitch it together," he said. "Everything needs to be connected." </p><p>That, however, is an incredibly difficult engineering process, which requires reworking the core code of those applications. To get there, Klein says he's devoting 10% of the company's entire development budget on the task, with the other 90% going towards new initiatives. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="7">
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</div></p><p>In a sign of this closer coordination between the acquired firms, Concur, <a href="https://www.protocol.com/bulletins/sap-concur-president-customer-chief" target="_self">which is undergoing a leadership change</a>, was "functionally" aligned into SAP on Jan. 1. A spokesperson declined to elaborate on what that means, but stated that "customers should not experience any disruption to their business as part of this organizational alignment within SAP." It's unclear whether other business units are undergoing a similar change. </p><p>At the same time, SAP is also focusing on revamping its product offerings and investing in new, industry-specific applications. One example of this is SAP's work with the oil and gas sector to <a href="https://blogs.sap.com/2019/09/24/chevron-and-sap-co-innovate-on-a-cloud-solution-for-oil-and-gas/" rel="noopener noreferrer" target="_blank">build catered cloud-based products</a> to run on the core ERP system. </p><p>But as the integration effort becomes a priority, Klein says he is putting the brakes on any other major acquisitions — though he didn't rule out smaller purchases that help fill a gap in its offerings. For example, SAP <a href="https://news.sap.com/2020/10/sap-to-acquire-emarsys/" rel="noopener noreferrer" target="_blank">bought customer analytics firm Emarsys</a> in October, an acquisition that will help the company compete against rivals like Salesforce. Conversely, Klein also didn't rule out future divestitures of its vast product portfolio. </p><p>Clearly, Klein doesn't appear to be ruling much out in his quest to turn around the software behemoth. And with major technical challenges, an internal cultural shift and an external marketing overhaul all underway, he'll need to hold his nerve and commit to SAP like never before if he's going to pull it off. But as his wife would probably tell you, that doesn't look to be a problem.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="8">
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</div></p><p><em>Update: This article previously stated, based on information from SAP, that 2020 was the first year ever that the company received a positive customer satisfaction score. It last received a positive score in 2017. Updated: 1/22/21</em></p>
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Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
Protocol | Enterprise
January's Slack outage started with an AWS networking error
And problems with Slack's infrastructure meant things got far, far worse from there.
This sign was about as interactive as Slack's software on Jan. 4.
Photo: Justin Sullivan/Getty Images
January 20, 2021
Tom Krazit ( @tomkrazit) is a senior reporter at Protocol, covering cloud computing and enterprise technology out of the Pacific Northwest. He has written and edited stories about the technology industry for almost two decades for publications such as IDG, CNET, paidContent, and GeekWire. He served as executive editor of Gigaom and Structure, and most recently produced a leading cloud computing newsletter called Mostly Cloudy.
January 20, 2021
The hours-long outage that kicked off the 2021 working year for Slack customers was the result of a cascading series of problems initially caused by network scaling issues at AWS, Protocol has learned.
According to a root-cause analysis that Slack distributed to customers last week, "around 6:00 a.m. PST we began to experience packet loss between servers caused by a routing problem between network boundaries on the network of our cloud provider." A source familiar with the issue confirmed that AWS Transit Gateway did not scale fast enough to accommodate the spike in demand for Slack's service the morning of Jan. 4, coming off the holiday break.
<p>Slack declined to comment beyond confirming the authenticity of the report. AWS declined to comment.</p><p>Over the next hour, packet loss caused by the networking problems led Slack's servers to report an increasing number of errors. That forced healthy servers to handle an increasing amount of demand as more and more servers were tagged as "unhealthy" due to their lack of responsiveness, thanks to the networking issues. Slack engineers were not alerted to the problems until around 6:45 a.m. PT.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>"By 7:00am PST there were an insufficient number of backend servers to meet our capacity needs," according to the report, and Slack went down hard across the world.</p><p>Slack had a backup reserve of servers ready to go, but began to discover problems with the provisioning service it used to spin up and verify those backup servers, which was not designed to handle the task of trying to get Slack up and running on more than 1,000 servers in a short period of time. It was also unable to debug the issues properly because <a href="https://www.protocol.com/enterprise/observability-monitoring-software" target="_self">its observability service</a> was also affected by the networking issues, according to the report.</p><p>Between 7 a.m. PT and roughly 8:15 a.m. PT, AWS increased the capacity of AWS Transit Gateway, and moved Slack from a shared system to a dedicated system, Slack told customers. Once Slack's problems with its provisioning system were fixed, the new servers found they had stable network connections, and service began to come back to normal over the next hour.</p><p>In its report, Slack promised customers it would improve several aspects of its architecture over the next few months, starting with a better alert system for packet loss and closer ties between its observability system and its provisioning service. It will also redesign the server-provisioning service to handle a similar type of event and set new rules around how its servers automatically scale in response to demand.</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>One thing that isn't yet clear is how folks at AWS coordinated their response to the outage: AWS, after all, is actually a Slack customer, since <a href="https://techcrunch.com/2020/06/05/slacks-new-integration-deal-with-aws-could-also-be-about-tweaking-microsoft/" rel="noopener noreferrer" target="_blank">the two companies signed a sweeping partnership deal</a> last June. For its part, <a href="https://www.geekwire.com/2019/slack-renegotiated-deal-amazon-web-services-2018-will-spend-least-212m-2023/" rel="noopener noreferrer" target="_blank">Slack signed a five-year deal with AWS in 2018</a> that appears to cover the majority of its cloud computing needs through 2023.</p><p>Slack has run into problems in the past when a disproportionately large number of people try to log into its service all at once. A similar outage occurred on Halloween in 2017 when a coding error kicked Slack users offline and everybody tried to log back in at the same time. "It's similar to DDoSing yourself," former Slack director of infrastructure Julia Grace <a href="https://www.geekwire.com/2017/slacks-julia-grace-lessons-learned-downtime-responsibility-pay-forward/" rel="noopener noreferrer" target="_blank">told me at the time</a>.</p>
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Tom Krazit ( @tomkrazit) is a senior reporter at Protocol, covering cloud computing and enterprise technology out of the Pacific Northwest. He has written and edited stories about the technology industry for almost two decades for publications such as IDG, CNET, paidContent, and GeekWire. He served as executive editor of Gigaom and Structure, and most recently produced a leading cloud computing newsletter called Mostly Cloudy.
Protocol | China
More women are joining China's tech elite, but 'Wolf Culture' isn't going away
It turns out getting rid of misogyny in Chinese tech isn't just a numbers game.
Chinese tech companies that claim to value female empowerment may act differently behind closed doors.
Photo: Qilai Shen/Getty Images
January 27, 2021
Shen Lu is a Reporter with Protocol | China. She has spent six years covering China from inside and outside its borders. Previously, she was a fellow at Asia Society's ChinaFile and a Beijing-based producer for CNN. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. Shen Lu is a founding member of Chinese Storytellers, a community serving and elevating Chinese professionals in the global media industry.
January 27, 2021
A woman we'll call Fan had heard about the men of Alibaba before she joined its high-profile affiliate about three years ago. Some of them were "greasy," she said, to use a Chinese term often describing middle-aged men with poor boundaries. Fan tells Protocol that lewd conversations were omnipresent at team meetings and private events, and even women would feel compelled to crack off-color jokes in front of the men. Some male supervisors treated younger female colleagues like personal assistants.
Within six months, despite the cachet the lucrative job carried, Fan wanted to quit.
A woman we'll call Zhang had a similar experience at her former employer, Baidu. She told Protocol that senior colleagues joked that Zhang and her younger female coworkers were hired to "please their eyes."
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Alibaba and Baidu look and act like they value female empowerment. Alibaba, the ecommerce giant, hosts a <a href="https://www.alizila.com/speakers-talk-womens-empowerment-at-alibaba-conference/" rel="noopener noreferrer" target="_blank">Global Conference on Women and Entrepreneurship</a> every year. Its founder, Jack Ma, has <a href="https://www.youtube.com/watch?v=wUuEryO0ogg" rel="noopener noreferrer" target="_blank">positioned</a> himself as a champion for women and has repeatedly said that Alibaba <a href="https://www.qianzhan.com/people/detail/271/140925-908063c9.html" rel="noopener noreferrer" target="_blank">owes its success to its female workers</a>. Ma has touted the company's <a href="https://ishare.ifeng.com/c/s/7pVlMyNV25i" rel="noopener noreferrer" target="_blank">relatively hefty share</a> of women in top management — currently, <a href="https://www.alibabagroup.com/cn/about/leadership" rel="noopener noreferrer" target="_blank">six out of 14</a> of the most senior roles are staffed by women. Search engine behemoth Baidu, too, likes to<a href="http://d.youth.cn/newtech/202012/t20201230_12640898.htm" rel="noopener noreferrer" target="_blank"> tout</a> its relatively high ratio — <a href="http://esg.baidu.com/Uploads/File/2020/06/18/u5eeb598d72472.pdf" rel="noopener noreferrer" target="_blank">46%</a> — of women in management.
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"Workplace equality is a core value of Baidu. Female employees account for 43% of Baidu's workforce and 46% of management. Women play significant roles as top executives of the company driving technology innovation and strategy," Baidu said in an email reply. Alibaba did not respond to Protocol's requests for comment.
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So why do women like Fan and Zhang have such a rough go of it?
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This is the terrible paradox at the heart of Chinese tech, one that will threaten its capacity to innovate in the future. A wave of Chinese women are joining elite tech companies and their boardrooms, often in numbers that compare favorably to tech industries abroad, but it turns out that getting rid of sexism is far more than a numbers game. Women in Chinese tech are marginalized, demoralized and exhausted. When they get home, they're still expected to shoulder most of the childcare and household chores.
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The result: Those who manage to ascend have to learn to play — and win — a man's game. This paradox is going to sharpen as more women enter tech and become aware of gender inequality.
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Women are increasingly populating Chinese tech offices. Data shows that some of China's biggest internet companies, including <a href="https://pic2.zhimg.com/80/v2-64ca7bcc8aa012b59dbd90cdb6c7b809_1440w.jpg" target="_blank">ByteDance</a>, <a href="http://esg.baidu.com/Uploads/File/2020/06/18/u5eeb598d72472.pdf" rel="noopener noreferrer" target="_blank">Baidu</a> and ride-hailing giant <a href="https://www.yicai.com/news/5260027.html" rel="noopener noreferrer" target="_blank">Didi Chuxing</a>, each employ at least 40% female staff. By way of comparison, <a href="https://www.statista.com/chart/4467/female-employees-at-tech-companies/" rel="noopener noreferrer" target="_blank">statistics show</a> that female employees fill between 28% and 42% of roles at America's five largest tech companies. In India, women make up <a href="https://go.451research.com/women-in-tech-india-employment-trends.html" rel="noopener noreferrer" target="_blank">34%</a> of the tech workforce; in the U.K., the figure is <a href="https://technation.io/insights/diversity-and-inclusion-in-uk-tech-companies/" rel="noopener noreferrer" target="_blank">19%</a>.
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Women have also made it into Chinese tech leadership. <a href="https://www.svb.com/trends-insights/reports/women-in-technology-2019" rel="noopener noreferrer" target="_blank">Seventy percent</a> of Chinese startups have at least one female executive, a higher proportion than companies in the U.S., U.K. and Canada, according to a 2019 survey conducted by Silicon Valley Bank. And more than 1,000 women have<a href="https://xw.qq.com/cmsid/20200308A0L9J400" rel="noopener noreferrer" target="_blank"> made it into the boardrooms</a> of China's public tech companies, according to a study conducted by Tianyancha, a data technology service company.
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Yet Alibaba and Baidu are not the only "greasy" companies. Leading Chinese tech firms, including Tencent, have posted job ads depicting their female employees as "pretty" or "goddesses" to attract male candidates, according to a <a href="https://www.hrw.org/report/2018/04/23/only-men-need-apply/gender-discrimination-job-advertisements-china#_ftn99" rel="noopener noreferrer" target="_blank">2018 Human Rights Watch report</a>. In 2017, WeChat's parent company Tencent apologized after <a href="https://www.sixthtone.com/news/1815/video-of-women-on-their-knees-deals-blow-to-tencent-image" rel="noopener noreferrer" target="_blank">footage emerged</a> of a corporate event where female employees were kneeling while using their teeth to open water bottles placed between men's legs. A <a href="https://www.digitaling.com/articles/16221.html" rel="noopener noreferrer" target="_blank">2012 job ad</a> for food-delivery group Meituan declared that "finding a job equals finding a woman," featuring a suggestive image of a thong hanging between a woman's legs. "Do what you most want to do," the ad concluded, using a verb for "do" that colloquially means "fuck." In the years since, Meituan has repeatedly depicted young women in its promotional ads as <a href="https://www.yunyingpai.com/extend/518996.html" rel="noopener noreferrer" target="_blank">food on the plate</a> for delivery.
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In gender studies, the <a href="https://tidsskrift.dk/scandinavian_political_studies/article/download/32616/30682" rel="noopener noreferrer" target="_blank">theory of critical mass</a> hypothesizes that deliberative bodies must be made up of at least <a href="https://www.un.org/womenwatch/daw/egm/eql-men/index.html#:~:text=Women%20have%20gained%20the%20right,States%20of%20the%20United%20Nations.&text=The%20figure%20of%2030%20percent,content%20of%20political%20decision%2Dmaking." rel="noopener noreferrer" target="_blank">30%</a> women to impact policymaking. But at least when it comes to tech, it's clear that neither a high percentage of female execs nor a workforce approaching gender parity equate to workplace equality. Julie Yujie Chen, who teaches at the University of Toronto and has researched the experience of Chinese women in tech, doesn't believe the presence of more women executives in a Chinese tech company will work in favor of female employees. "Women in tech is not a representation issue," she told Protocol. "It is about challenging the norms."
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Lin Zhang, an assistant professor at the University of New Hampshire who has interviewed dozens of female entrepreneurs in China's tech companies, said many of the women who thrive in this ultra-competitive, male-dominated industry not only have become resigned to workplace masculinity and sexism, but have internalized it. "Because of the generally hostile gender culture in China, there's not much solidarity among women," Zhang said. "Now that they're up there, they feel like, 'I have paid my dues. It's your turn.'"
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Alibaba's Fan echoes this: "Although women are much present in Alibaba's senior management, they all have transformed themselves to be greasier than the men. That's how they entered that powerful circle."
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Shi is a 30-year-old manager of a content-producing team at Nasdaq-listed video-sharing platform Bilibili. Like Fan and the other female tech workers interviewed for this story, she spoke to Protocol on the condition that she be identified by a pseudonym to avoid retaliation from her employer. Shi said the women in her company leadership "completely subscribe to the 'wolf' mentality. They are just as territorial, aggressive and exploitative as the men."
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One result is tech products that objectify women and reinforce gender stereotypes, at least in the way they are marketed and used. Didi Chuxing is helmed by a woman — company president Jean Liu — and Didi's staff was <a href="https://www.yicai.com/news/5260027.html" rel="noopener noreferrer" target="_blank">40%</a> female in 2017, the most recent year for which statistics are available. However, it encountered scandal with Hitch, a carpooling service launched in 2015 that suggested hookups between drivers and passengers in its 2018 <a href="https://new.qq.com/omn/20180828/20180828A08PZK.html" rel="noopener noreferrer" target="_blank">ads</a>. Two female Hitch passengers were <a href="https://www.nytimes.com/2018/08/26/business/didi-chuxing-murder-rape-women.html?smtyp=cur&smid=tw-nytimesworld" rel="noopener noreferrer" target="_blank">raped and killed</a> that same year. The general manager at Hitch was a woman named Huang Jieli.
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Even relatively "woke" Chinese companies demand a lot of their employees. A major culprit is Chinese tech's infamous 996 work schedule — 9 a.m. to 9 p.m., six days per week — which can wear workers down. I spoke with most interviewees after 10 p.m. in China, after they had finished a long day's work. Message alerts from colleagues often interrupted our conversations.
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This work culture further disadvantages women because of the larger milieu in which they live. Women still shoulder most of the childcare and housework burden in Chinese households. A 2019 National Bureau of Statistics <a href="https://cnlgbtdata.com/files/uploads/2020/01/%E4%B8%AD%E5%9B%BD%E7%A4%BE%E4%BC%9A%E4%B8%AD%E7%9A%84%E5%A5%B3%E4%BA%BA%E5%92%8C%E7%94%B7%E4%BA%BA2019EN-final.pdf" rel="noopener noreferrer" target="_blank">report</a> showed that women spent more than twice as much time as men on unpaid household work. "The lack of reliable childcare service becomes a structural barrier for women to advance their career," said Chen, "especially in sectors like the tech industry."
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Although a large number of young Chinese women have joined tech, they are more likely to concentrate at the lower end of the skill and productivity spectrum, such as human resources, public relations and business operations. Programming, often the power center, remains a male-dominated division, with female programmers comprising only 10.4% of its ranks in 2020, according to a<a href="https://zhuanlan.zhihu.com/p/109185515" rel="noopener noreferrer" target="_blank"> report by Chinese digital working platform Proginn</a>. (In the U.S., figures range between <a href="https://www.statista.com/statistics/1126823/worldwide-developer-gender/" rel="noopener noreferrer" target="_blank">8%</a> and <a href="https://www.frgconsulting.com/blog/female-developers-workforce/" rel="noopener noreferrer" target="_blank">11%</a>.)
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Of course, China has its share of relatively egalitarian companies. Take ByteDance. While it spent last year at the center of U.S. controversy over data-sharing with Beijing, it's seen at home as valuing diversity and inclusion. Dong, who works in the ByteDance HR department, told Protocol she chose the company for its relatively egalitarian culture. It was the only prospective employer that did not inquire about her marital status when she was job-hunting in 2018, and the supervisor of the department she was interviewing for was a woman in her late 30s.
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But Dong thinks ByteDance is swimming against the tide. She says several senior female colleagues in her team still had to quit because they couldn't juggle work and childcare demands. It's not a problem unique to China, but female workers there are getting less help than in other countries. "Tech companies in other countries are trying to create a better environment for female workers who face similar social expectations," Dong said. "But in China, they won't specifically create supportive policies for you. The baseline is lower. It's like, 'I'm already doing well by not treating you badly.'"
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Shen Lu is a Reporter with Protocol | China. She has spent six years covering China from inside and outside its borders. Previously, she was a fellow at Asia Society's ChinaFile and a Beijing-based producer for CNN. Her writing has appeared in Foreign Policy, The New York Times and POLITICO, among other publications. Shen Lu is a founding member of Chinese Storytellers, a community serving and elevating Chinese professionals in the global media industry.
Protocol | Enterprise
Databricks plans to take on Snowflake and Google and score a huge IPO
Even against intensifying competition, Databricks hopes to be a hit when it heads to the public markets this year.
Ali Ghodsi is the CEO of Databricks.
Photo: Databricks
January 11, 2021
Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
January 6, 2021
Enterprise software had a huge 2020 on Wall Street as companies such as Snowflake and C3.ai went public with blockbuster initial offerings. Databricks CEO Ali Ghodsi is hoping to ride the same wave in 2021.
The public debut of the data analytics startup, valued at $6.2 billion, is among the most-watched IPOs for the year. And for good reason: It competes in a similar space as the much-hyped Snowflake, helping customers find the data to power the algorithms that help with everything from picking which products to order to which candidates to bring in for job interviews. While Databricks has been tight-lipped on its specific plans, including which bankers it is tapping to help navigate the often arduous process, it is taking steps internally to prepare.
<p>"There's a lot of compliance that goes into it," Ghodsi told Protocol. "Much of it is making sure that we have that predictability that you need when you IPO."</p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="1">
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</div></p><p>Unlike other startups that tend to bring on a new chief financial officer to oversee the IPO, Databricks is already set: CFO Dave Conte previously helped take Splunk public in 2012. But it does plan to make other key hires, according to Ghodsi, including a new head of engineering and new board members. </p><p>Databricks is also shoring up its own internal software, including investing "massively" in Workday, according to Ghodsi. And while an IPO is looming, the company is weighing another funding round in the interim amid what Ghodsi described as a rush of calls from venture capital firms looking to invest. </p><p>While Ghodsi says 2020 brought a "significant acceleration" of its business, he declined to provide any up-to-date revenue figures. Databricks said in October that it passed a $350 million revenue run-rate at the end of Q3, up from $200 million a year earlier — an acknowledgement that, despite COVID-19 gutting some sectors, the appetite for data analytics and artificial intelligence is robust. Still, the competition is fierce and, despite <a href="https://databricks.com/company/newsroom/press-releases/databricks-and-snowflake-announce-strategic-partnership" rel="noopener noreferrer" target="_blank">notably partnering with Snowflake in 2018</a> (a partnership that continues today), Databricks faces an increasing rivalry from the current industry darling, as well as Google's BigQuery. </p><p>"For data science and analytics, those are really going to be the three competitors," Sapphire Ventures co-founder Jai Das said. "But the market is still so big, I think all three are going to be successful."</p><h2>First time IPO'er
</h2><p>The investor appetite is, of course, a big vote of confidence in Databricks. But it's also a show of support for Ghodsi, a former researcher at the Swedish Institute of Computer Science who still teaches classes at the University of California, Berkeley. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="2">
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</div></p><p>It's not uncommon for companies to bring on CEOs skilled in taking startups public prior to their own offerings. Snowflake, for instance, poached Frank Slootman, who <a href="https://www.cnbc.com/2020/08/30/snowflake-ceo-frank-slootman-pursues-third-ipo.html" rel="noopener noreferrer" target="_blank">led the IPOs for ServiceNow and Data Domain</a>, for its own offering. </p><p>That's not the approach at Databricks. It'll be Ghodsi's first time leading through the process. But while he doesn't come armed with detailed knowledge of the public markets, he believes a deep understanding of Databricks and its offerings is a much more significant advantage. </p><p>"These professional CEOs very rarely are good at that because they don't really understand the products that your company is selling," Ghodsi said. "Oftentimes what happens is that you have great technical founders, they start the company, you launch the product, but you don't really hit your revenue targets. Then the board looks at making changes to fix that. That's basically the death of the company in the long term." </p><p>For Ghodsi, the long-term mindset meant largely ignoring the frothy equity markets in 2020 that led some firms to <a href="https://www.protocol.com/how-a-spac-works" target="_self">quickly launch a public offering</a>. And despite claiming it will be a "really successful" offering in 2021, he views the IPO as just one step in the vision to make Databricks akin to Salesforce — an enterprise software firm that <a href="https://www.protocol.com/salesforce-blockbuster-2020-benioff" target="_self">continues to grow in revenue and influence</a> roughly 16 years after its own IPO. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="3">
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</div></p><p>To get to this point, however, took what Ghodsi described as three phases of evolution. </p><p>When he and six other co-founders started the company in 2013, Ghodsi served as vice president of engineering and product management. That gave him a leading voice in figuring out exactly what market needs its offering was solving. But it also meant forgoing lofty revenue targets — it made roughly $1 million that year — to instead focus on "making sure that this is a product that companies really need and love." </p><p>The growth came when Ghodsi took the reins, assuming the role of CEO in 2016. At the time, Databricks poured money into its "go-to-market function," including sales and marketing. That also included developing a "customer success" function, an increasingly common facet to organizations that sell their services via the cloud, designed to keep close contact with customers and ensure they don't pivot to another provider. By the end of 2019, Databricks reported a $200 million revenue run, up from "almost no revenue," according to a statement at the time. </p><p>That also meant hiring beyond 150 total employees, breaching what is commonly referred to as "Dunbar's number" or the maximum number of people that one person can keep in social contact with. In a practical sense, that meant Ghodsi no longer knew the names of all the employees.</p><p>Now, Databricks is in what Ghodsi calls the "operational excellence" phase, or making sure all the company's processes are "aligned and rowing in the same direction." It's produced one of the company's biggest new product releases to date: SQL Analytics, which helps data scientists or analysts more easily run queries on a vast amount of unstructured data through commonly used tools such as Tableau. </p><p><div class="ad-tag"><div class="ad-place-holder" data-pos="4">
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</div></p><p>While similar offerings are available from Snowflake and BigQuery, the release is Databricks' way of championing the "data lakehouse," or a combination of curated information alongside unstructured data. Typically, they reside in two different stacks, often referred to as a data lake (a vast pool of information) and a data warehouse (a more structured storage center). </p><p>And more product announcements are in store for 2021 as Databricks looks to capitalize on its fastest growing industry sectors, including health care. </p><p>"Databricks is behind the scenes of pretty much all the vaccines that are being talked about," Ghodsi said. He added: "Health care providers are using it to track inventory and how crowded their hospitals are." </p><p>But despite Ghodsi's best attempt at downplaying the current financial environment's influence on the company's next steps, it's clear that competitors' successes are top of mind — and that the biggest event of Databricks' year will be held on Wall Street. </p><p>"It's a really, really good IPO climate and we will be IPO-ready," he said.</p>
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Joe Williams is a senior reporter at Protocol covering enterprise software, including industry giants like Salesforce, Microsoft, IBM and Oracle. He previously covered emerging technology for Business Insider. Joe can be reached at JWilliams@Protocol.com. To share information confidentially, he can also be contacted on a non-work device via Signal (+1-309-265-6120) or JPW53189@protonmail.com.
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