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How to plan for a cloudy year ahead

Cloud 2021

Good morning! This Wednesday, what's new from AWS, Salesforce really did buy Slack and the Facebook Oversight Board picked its first cases.

Also, some of you might get a second email from us today asking for some feedback on all things Protocol. Please tell us everything! Good, bad, ugly, we want to know everything about how to serve you better. And if you do, we'll send you a Protocol mug!

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The Big Story

The plan for a cloudy 2021

Anna Kramer writes: Welcome to the last month of 2020, the year we all had to start caring about vaccine tech and social distancing and ... enterprise cloud software. Yesterday was the kickoff event for AWS re:Invent, one of the most important weeks in the year for the future of the cloud, and Tom Krazit and the rest of the Protocol crew wrote a series of stories about how the pandemic made businesses accelerate their digital transformation.

One big takeaway: This year's new dependence on cloud computing is here to stay, but the majority of companies will likely maintain hybrid cloud infrastructure (a mix of data centers and cloud services) for the foreseeable future.

  • That was a big theme during Andy Jassy's keynote at re:Invent yesterday (in which he also announced that Mac instances are headed to AWS, which made a lot of Apple developers really, really happy). AWS launched a number of services — Outposts and Local Zones among them — that improve the hybrid parts of their business, areas where Google and Microsoft have already taken big steps.
  • "AWS spent a bizarre amount of time and energy in the keynote convincing themselves they invented hybrid, which just isn't true," said Charles Fitzgerald, an angel investor and former executive at Microsoft and VMware. "They have a strange psychological need to believe they are the 'best' and invented everything, which makes for strange contortions when they run into all the cases where that isn't true."

Microsoft and Google were quicker to embrace the hybrid cloud in an effort to catch up to AWS. And yet AWS remains the most dominant cloud player heading into 2021: It could record well over $40 billion in revenue by the end of the year.

This rest of this week's "The New Enterprise" manual dug into how Zoom managed to handle its exponential user growth without any serious interruptions to service, the challenges of managing cloud spending, the fear of being overly dependent on one cloud provider and more stories to come over the next few days. You can dig into all the details here, where we'll be posting new stories through Friday. And subscribe to Tom's Cloud newsletter, if you haven't already!

M&A

The next future-of-work deals?

It's official! Salesforce is buying Slack for $27.7 billion. Stewart Butterfield will still be in charge, and as he told employees, "we're not changing our roadmap, our brand, or the way we do business." Still, it sounds like Slack is going to become a key cog in the Salesforce machine. With Dreamforce kicking off today, I suspect we'll hear a lot more about how all this is going to work.

It's a tricky moment for M&A in the business-software world, with so many companies riding new tailwinds of success in the pandemic. That makes acquisitions more expensive, but also gives the biggest companies even more money to spend. And many of them want to plant their flag at the center of the future of work while they still can. There's a good chance Slack is only the first of a series of big-ticket deals going forward.

We started thinking about who could be next on the future-of-work M&A target list — established companies, validated by the shift to distributed work, but not hitting Zoom-like growth or price levels — and there are a few companies to watch.

  • Box. The company has had a nice year — it reported more strong earnings yesterday — but it's been up and down on the markets. Long-time focus on enterprise customers is a win for most possible acquirers.
  • Dropbox. Same thing, basically? Though its stock has hit higher highs, and it's operating on a more ambitious future-of-work plan (which actually sounds quite a lot like Slack's).
  • Asana. Another recently public, business-focused tool that a lot of people like, but it doesn't always have a fair shot against the tools people already use, or the ones that they get for free.
  • The startups. There's Coda and Airtable, Monday and Smartsheet, Notion and Rippling, and plenty of other high-value startups — CB Insights' list of unicorns is a fun one to peruse — that will likely have their tires kicked in the next few months.

What do you think? Any companies you're keeping an eye on, either as buyers or sellers, in the coming months? Reply to this email or send me a note at david@protocol.com.

Moderation

The Facebook court picks its first cases

The Facebook Oversight Board has chosen the first six cases it will adjudicate, setting a tone and expectation for what the independent group cares about. Five cases come from user appeals, and one comes from Facebook itself. Here are the six:

  • A screenshot of two tweets from a former Malaysian prime minister saying Muslims have a right to kill millions of French people for past crimes.
  • Two photos of a dead child on a beach, with a caption about "retaliation against China for its treatment of Uyghur Muslims."
  • Alleged historical photos showing churches in Baku, Azerbaijan, accompanied by text stating that Baku was built by Armenians and asking where the churches have gone.
  • Eight photos with uncovered breasts and nipples, with a caption about breast cancer symptoms.
  • A quote from Joseph Goebbels saying that emotion is more important than truth.
  • A video criticizing France's strategy for coping with COVID-19, and promoting potentially dangerous cures. (This is the one that came from Facebook.)

So, lots of politics, lots of questions about context and intent, and lots of potential ramifications from the rulings. The Board's asking for public comment on each one before making its decisions in the coming weeks.

A MESSAGE FROM MICRON

Micron

At Micron, we see an opportunity to establish memory and storage platform capabilities that will unleash software developers to deliver solutions that speed insight and ultimately support emerging customer requirements. The data-centric era has ushered in a new opportunity to tap data for business growth, but many companies continue to struggle to transform mounting data stores into competitive advantage.

Learn how here.

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Join Protocol's David Pierce and 800+ amazing speakers at Web Summit, the world's largest technology conference, from Dec 2-4. Click here to book tickets.

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People Are Talking

Elon Musk is worried that Tesla's stock price might be too high:

  • "Investors are giving us a lot of credit for future profits, but if, at any point, they conclude that's not going to happen, our stock will immediately get crushed like a soufflé under a sledgehammer!"

A group of shareholders is suing Pinterest over allegations about its work culture:

  • "Pinterest's top executives and members of its Board of Directors personally engaged in, facilitated or knowingly ignored the discrimination and retaliation against those who spoke up and challenged the Company's White, male leadership clique."

Nasdaq wants to require companies to have more diverse boards, and the stock exchange's president Nelson Griggs said every company should take it seriously:

  • "Our proposal is more than a social good; it is a business imperative. We believe that while change must come at all levels of an organization, setting a standard for diversity at the board level is one of the most essential places to start."

Making Moves

Brian Pinkerton is a new SVP at Roku, where he'll lead advanced technology development. He's the former chief architect for Siri at Apple, and will be working across all of Roku's platform.

HPE is moving to Houston. It's making the Texas city its new headquarters, and has been building a new campus there since the beginning of the year. It's keeping its office in San Jose, but plans to relocate a lot of employees to Houston. Cybersecurity company Tanium also relocated, moving its HQ from the Bay Area to Kirkland, Washington.

Adam Nash and Alejandro Crosa are starting a new company. What it will be is still a mystery, but Nash said that "We believe that there is a lot more to do in consumer fintech, and that software can help bring purpose to our financial lives."

In Other News

  • Trump threatened to veto a defense bill if Section 230 isn't repealed. He called Section 230 "a serious threat to our National Security & Election Integrity."
  • Samsung might discontinue the Galaxy Note. Reuters reports that the company is thinking about just focusing on the Galaxy S instead, perhaps because of the lack of demand for expensive smartphones.
  • Microsoft addressed privacy concerns on its Productivity Score feature. It removed people's usernames from the tool, so it now just measures overall workplace behavior. Meanwhile, Amazon launched Monitron, a hardware and software system for monitoring factory machines and workers.
  • 52 million. That's how many daily active users Reddit has, a number it has never revealed before. That obviously pales next to Facebook's 1.82 billion and even Twitter's 187 million, but Reddit said it's growing fast, up 44% since last year.
  • On Protocol: Syng wants to take on the smart speaker giants. A newly filed patent application reveals the company, led by former Apple employees, is building immersive audio speaker technology that's meant to replace your 5.1 living room setup.
  • Singapore became the first country to approve lab-grown meat. The momentous product? Eat Just's chicken nuggets.

One More Thing

Bad Bunny runs the world

It's year-end list time, and Spotify's Wrapped lists are always among my favorites. (They're a great litmus test for how old you are: The more names you know, the younger and hipper you are, which means I am approximately 153 years old.) This year's big winners? Bad Bunny, Billie Eilish, The Joe Rogan Experience and the notion that Spotify is a thoroughly global company with a thoroughly global audience. Oh, and Drake. Drake always wins.

A MESSAGE FROM MICRON

Micron

At Micron, we see an opportunity to establish memory and storage platform capabilities that will unleash software developers to deliver solutions that speed insight and ultimately support emerging customer requirements. The data-centric era has ushered in a new opportunity to tap data for business growth, but many companies continue to struggle to transform mounting data stores into competitive advantage.

Learn how here.

Today's Source Code was written by David Pierce, with help from Anna Kramer and Shakeel Hashim. Thoughts, questions, tips? Send them to david@protocol.com, or our tips line, tips@protocol.com. Enjoy your day; see you tomorrow.

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