Microsoft's making moves, a shakeup at Charles Schwab, and WeWork's landlords


Satya Nadella


The cloud computing market is close to hitting a $100 billion milestone, according to a new report. And competition is heating up.

The cloud market, which covers web-based services for infrastructure, platform, and hosted private clouds, totaled about $23 billion in the second quarter, according to Synergy Research Group. That means overall revenues are close to hitting a $100 billion annual run rate. 

The same report found that Amazon had 33% of the market share, more than double that of Microsoft, the next biggest player. But Microsoft is catching up.

According to separate research, Microsoft’s overall cloud-hosted businesses — including Azure, Office 365, LinkedIn, GitHub, Bing, and Xbox Live — now appears to account for as much revenue as the tech titan’s more traditional businesses. That’s a key milestone for the company. 

Plus, Todd Pekats, vice president of cloud computing and services for a big Microsoft reseller partner, PCM, told BI’s Julie Bort that there’s an “obscenely large” opportunity for Microsoft’s cloud, as customers are forced to give up a very old version of its database.

Still, it’s not all good news for Microsoft. Outages, runaway costs, and frustration with tech support have hurt Microsoft’s cloud in the eyes of its customers, according to analyst firm Gartner. (Gartner also had a warning for Amazon cloud customers: Beware of prices, new features, and Amazon’s competitive behavior.)

And Google Cloud also appears to be making headway. There’s a growing list of signs that new CEO Thomas Kurian is starting to make Google Cloud more successful with big companies, according to Bort. 

In the cloud startup space meanwhile, hot startup Gusto raised a $200 million round, doubling its valuation to $3.8 billion. CEO and cofounder Josh Reeves told BI’s Ben Pimentel that it’s just a matter of time before it goes public. “It’s not if, but when,” he said. 

And the new CEO of $3.9 billion Snowflake says there’s no room for “distractions” like employee activism in his mission to fight Amazon and Microsoft. “You go somewhere else if you want that conversation,” he told Pimentel. 

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– Matt

Quote of the week

“Talent agencies have had the reputation of being all smoke and mirrors for a long time, but we’ve really tried to arm our clients with data that shows why they should partner with a certain show or talent.” — Julian Jacobs, cohead of UTA Marketing, on Hollywood talent and entertainment giants branching out into advertising. 

In conversation

  • Marley Jay talked to Peter Mallouk, president and chief investment officer of Creative Planning, the largest independent wealth-management company in the US. He discussed the two mistakes his clients repeatedly make — and how other investors can best avoid them.
  • Rebecca Ungarino talked to Adrienne Penta, a managing director at Brown Brothers Harriman, about why Brown Brothers Harriman is betting human interactions will help it dominate in wealth management.
  • Alex Morrell talked to John Ahearn, global head of trade at Citigroup, about why instability is a good thing for the bank’s trade finance business. 
  • Charlie Wood talked to Dominic Williams, founder and chief scientist at Dfinity, a nonprofit set up to end big tech’s monopoly. He said DeepMind’s sale to Google was “an outrage.”
  • Ashley Rodriguez talked to Matt Strauss, the executive vice president of Xfinity services at Comcast Cable, about the company’s “surgical” strategy for stemming TV subscriber losses. 
  • Lydia Ramsey talked to Hemant Taneja, a managing director at General Catalyst and an early backer of digital health startup Livongo, which just went public. He told us the three key considerations for digital-health companies that want to go public.

Finance and Investing

Charles Schwab’s retail head and marketing chief are out — and the firm’s still figuring out what’s next

Charles Schwab is shaking up its retail arm and two key executives are leaving the firm, Business Insider has learned.

We got a peek at WeWork’s top landlords. Here’s who is most exposed to the fast-growing, but money-losing, coworking company as it prepares to IPO.

WeWork’s landlords have so far avoided much of the media coverage swarming around the startup.

Morgan Stanley scoured 100 sets of data and warns we’re ‘just outside the danger zone’ of the next recession. Here’s how it says to prepare.

The next recession may not be imminent — but it’s close enough for investors to start getting their portfolios in order.

Tech, Media, Telecoms

Snap is secretly testing dynamic product ads that retarget consumers as it races to compete with Facebook and Pinterest for e-commerce dollars

Snapchat is revving up its retargeting engine to attract e-commerce ad dollars.

AT&T has quietly bolstered its ad tech to compete with Google. Here’s the pitch deck it’s showing to agencies to explain how it works.

AT&T wants to reinvent advertising using its data and content including that of Turner and Warner Bros.

A top talent manager breaks down the big trends in how YouTube stars are making money in 2019

Some of YouTube’s top creators are making millions a year off their online brands, like the 7-year-old Ryan of Ryan ToysReview, who makes $22 million a year.

Healthcare, Retail, Transportation

‘We’re light years ahead of where we were’: Novartis CEO Vas Narasimhan told us how the Swiss drug giant is using AI for everything from evaluating managers to predicting its financials

Since taking the reins at Novartis early last year, CEO Vas Narasimhan has been a prominent voice on the potential for technology in the pharmaceutical industry.

Transforming parking lots into hubs for Uber Eats and Amazon deliveries is big business — and one of the world’s most prolific tech investors is now on board

The humble parking space hasn’t changed much since Henry Ford’s era.

Beyond Meat, whose plant burgers can fool even die-hard meat lovers, is up 700% since its IPO. Early investors say it will change how we eat, but there are signs Wall Street’s binge could end badly.

Greg Bohlen knew early on that Beyond Meat could be big.

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