Ride-sharing service Uber Technologies Inc. said Thursday a new round of funding valued it at $41 billion, a bet by some of the world’s top investors the firm can sustain a breakneck global expansion pace despite fierce challenges from regulators and taxi companies.
The San Francisco-based company collected $1.2 billion that enables it to expand its workforce, lure new drivers, test a delivery service and subsidize prices in some of the 250 cities around the world where it operates. The closely held company has raised eight times as much as its closest ride-sharing rival, Lyft Inc.
The funding is a vote of confidence in Travis Kalanick, Uber’s co-founder and chief executive whose brash personality has courted controversy. A recent privacy scandal stirred by one of Mr. Kalanick’s deputies appeared not to faze investors focused on Uber’s business prospects.
Uber is now valued at $41.2 billion, easily the highest for any private startup now backed by venture capitalists, and above the market capitalizations of publicly traded companies including Delta Air Lines Inc., Charles Schwab Corp. , Salesforce.com Inc. and Kraft Foods Group Inc.
Now, the five-year-old company must prove it can turn a mobile app for hailing a ride into a significant and profitable global business. Its app, which lets people hail a car from professional or nonprofessional drivers with a few clicks and a credit card, has become a part of daily life in cities from Anchorage to Shenzhen, China.
Some of that cash will go into defending its services. Uber is in fierce fights with local regulators in many places where it operates. It has faced protests by taxi drivers, shutdowns and laws aimed at forcing ride-sharing services into compliance with safety measures and work rules governing taxi operators.
Uber also is exploring using its fleet of drivers to transport goods and services in addition to people. The company has tested deliveries of items including ice cream, flu shots and fresh meals and recently poached the head of Google Inc. ’s same-day delivery business.
The latest financing assumes that Uber’s rapid expansion overseas will overcome these hurdles and continue apace, said Bill Gurley, a partner at Uber venture investor Benchmark and a board member of the ride-sharing company.
“International expansion probably is the key theme of the fundraising,” said Mr. Gurley. “We feel remarkably good about where we stand in the domestic market and our real growth initiatives are focused internationally.”
Uber profits by keeping 20% of the fare paid on most rides on its service and gives the rest to its drivers, who work as independent contractors.
It made hundreds of millions of dollars in revenue last year and is growing sales at a clip of more than 40% a quarter, said a person familiar with the company’s operations. That is an increase from earlier this year, when Mr. Kalanick said revenue was doubling every six months.
By the end of next year, Uber expects to be operating at an about $2 billion net annual revenue rate, excluding driver pay, according to the person familiar with the company’s financials. Such growth is coming from a cookie-cutter global expansion, where the company moves quickly to open up shop, splash out incentives to sign up drivers and then hire lobbyists and lawyers to gird for legal challenges from taxi companies and regulators.
“They are doing exactly what they need to do to change the market,” said Dave Ashton, co-founder of SnapCar, another app-based car service in France that competes with Uber. “They don’t even make any effort to comply with what they think are bad laws.”
That plan doesn’t always work. Uber last week suspended operations in Nevada after a judge issued an injunction against the startup amid accusations that it competes unfairly with taxis because it doesn’t follow the same rules regarding drivers, insurance and more. Elsewhere, regulators in Brussels are readying new laws that would allow Uber and taxis to coexist, while a decision from a French court over the possible banning of Uber is due Dec. 12.
In Europe, Uber has been the focus of violent protests by taxi drivers and regulatory bans on a carpooling service it calls UberPop that was unveiled this year. UberPop, which uses drivers without professional taxi or chauffeur licenses, is banned in Brussels and facing court challenges in Berlin. In France, the national consumer-protection agency and the Paris prosecutor say the new service is illegal and are backing a suit against Uber in commercial court.
Uber’s response last month was to hold a news conference at its Paris office to declare that the firm would expand UberPop in Paris. In a presentation before giving televised interviews, executives said their goal is to have 70,000 drivers without professional licenses picking up fares across Paris in two years.
Uber executives say they are operating under outdated laws that they fully expect to change once lawmakers see the service’s popularity with constituents.
“If every time somebody wants to ban us, we just go along with that, we wouldn’t be in business,” said Mark MacGann, Uber’s main lobbyist in Europe and the former head of government affairs at NYSE Euronext in Brussels.
Uber’s strategy has been to get a foothold in a market in any way possible, whether it offers a way to hail traditional metered taxis, livery cabs or drivers without professional licenses through its ride-sharing services. The key is to get potential customers to download the app and then expand the range of services.
In London, the company has tried to recruit taxi drivers, but many drivers of London’s iconic black cabs refuse to work with a company they believe is breaking the law. Cabdrivers say the smartphone app that calculates fare based on time and distance is tantamount to a taximeter, which is only allowed to be used by the more expensive black cabs.
Any delay into a city costs Uber potential market share. Uber hasn’t successfully cracked the Dublin market, for example, where the London-based competitor Hailo Network Ltd. is widespread.
Authorities in Berlin and Hamburg banned the service. In response, Uber lowered the fares drastically in an attempt to appease passengers. But the low fares make it unattractive for drivers to offer their services. In recent weeks, Uber cars have been unavailable in the city.
Mr. Kalanick said in a blog post on Thursday that the Asia Pacific region is a priority for the company’s international growth. It recently opened in Vietnam and Singapore, joined with a rental-car firm in Jakarta and plans to add rickshaws in India.
But the company also faces increased scrutiny in Thailand, Vietnam and Singapore, where regulators are examining the service’s legality. On Monday, Thailand’s transport minister, Prajin Juntong, said the government would ask Uber to cease its operations there because it uses private cars that lack fare meters, among other issues.
Uber hopes to recruit prominent investors in India, Latin America and the Middle East as it raises $600 million, with the goal of fostering powerful new allies who could help the company clear obstacles to growth, according to people familiar with its goals.
Uber is also seeking to rebuild its public image in the wake of controversial comments made last month by one of its executives, who suggested in a private dinner that the company should do opposition research on journalists critical of its business. The incident sparked concerns about Uber employees’ access to its customers personal data, and Sen. Al Franken (D., Minn.) called on the company to explain what data privacy policies it has in place.
“We also need to invest in internal growth and change,” Mr. Kalanick said in the blog post. “Acknowledging mistakes and learning from them are the first steps.”
Uber’s latest valuation is double the amount set by investors just six months ago and is nearly 12 times last year’s total. The company didn’t disclose which investors participated in the funding.
No other private tech startups are valued anywhere near Uber. Four companies currently have $10 billion valuations—home-rental site Airbnb Inc., software company Dropbox Inc., mobile-messaging service Snapchat Inc. and Chinese smartphone maker Xiaomi Inc.—though those valuations could climb quickly with a newly announced funding round. Various reports have said Xiaomi is raising funding at a valuation above $40 billion.
Uber has now raised more than $2.7 billion from a wide range of investors, including mutual-fund managers Fidelity Investments and Wellington Management; venture-capital firms Benchmark, Kleiner Perkins Caufield & Byers and Menlo Ventures; and private-equity firm TPG Growth.
—Chase Gummer, Newley Purnell and Friedrich Geiger contributed to this article.
Authored by Douglas MacMillan at email@example.com
Original article found here.
Most people know about Amazon’s ambitions to sell you everything from books and movies and smartphones to power tools and auto parts.
Less understood outside the technology industry is just how aggressively the company is also trying to become an important technology provider to other organizations, its aspirations just as big as those of Microsoft, IBM and Google.
Amazon Web Services already provides so-called cloud computing services at low prices for customers including the Central Intelligence Agency and Netflix. At a conference here last week for the web-services unit, company officials explained that Amazon was now trying to get more tech dollars from business customers by also offering services and processes that make it a competitor to traditional suppliers of business technology like Oracle.
Offering more capabilities to customers is a big deal for Amazon. A report last month by the Synergy Research Group said Amazon’s web-services unit has about a 27 percent share of the worldwide market for cloud infrastructure services. Microsoft is second with about a 10 percent share.
But there are indications that a pricing war and more focus from competitors could dig into Amazon’s lead. There are even concerns that the unit’s revenue growth has stalled in recent quarters.
What makes Amazon unique in the fight to own the computing cloud is what it’s not — a traditional tech company with a long history of providing products and services to business customers. Finding a way to deliver services over the Internet that behave like databases and other traditional software products will be critical to keeping its lead because older tech companies like Microsoft are already capable of doing it.
Amazon Web Services is banking on help from its customers to make its ambitions work. “Ninety percent of our development is deep, sophisticated corporate users telling us what to build next,” said Adam Selipsky, the unit’s vice president for products.
On Wednesday, the unit announced that in 2014 it had released 442 new products for its global network of computers and software, a 60 percent rise from all of 2013. It later raised that number to 449, including faster ways to write and publish software.
The lower number “was so this morning,” said James Hamilton, the enthusiastic executive who oversees the development of A.W.S. “This is a different world,” said Mr. Hamilton, a veteran of decades in companies like IBM and Microsoft before he joined the unit in 2008. “The speed is unbelievably different. We don’t slow down as we get bigger.”
But the unit could face challenges in its efforts. It has already had to deal with embarrassing system failures and changed its policies to suit national governments. Moreover, its parent company, Amazon, has returned less in profits in its 17-year life as a public company than cloud competitors like Google and Microsoft earn in a single quarter. If Wall Street grows tired of Amazon’s continued losses, it could also pinch A.W.S.
Amazon is not the only big tech company trying to lure businesses to the cloud. Microsoft, Google and IBM are all trying to get business customers to rent their cloud services rather than buy software, servers and networking gear.
Just a few years ago, public clouds like Amazon’s were considered experimental turf for tech start-ups. Today, companies like Johnson & Johnson, Intuit and General Electric are among the unit’s customers. In the past year, A.W.S. says, the amount of data it stores has grown 137 percent. It sells twice as much of its basic computing as a year ago.
And analysts believe the pace is picking up across the handful of big tech companies providing cloud services. “Two years ago, public clouds were maybe 2 percent of all computing workloads,” said Lydia Leong, a senior analyst at Gartner. “Now they are more than 10 percent. By 2018, it will be more than 50 percent.”
In addition to parading mainstream companies across the stage at its conference, Amazon released a type of database aimed straight at the core business of Oracle, the world’s largest database company. Oracle declined to comment on Amazon Web Services.
Johnson & Johnson announced from the stage that it would install 25,000 cloud-connected A.W.S. computers that offer a range of standard software, like Microsoft’s Office suite.
Mr. Selipsky said J&J had helped Amazon shape its desktop product, which was initially announced a year ago. Although A.W.S. is known mostly for selling basic computing services, he said that future products would include sophisticated software around managing user behavior, software for compliance in regulated industries like finance and migration of existing software running on corporate computers to the cloud.
By running the customers’ software within their own data centers and listening closely to their needs, cloud companies learn more quickly about customer behavior, figuring out which incremental improvement they can immediately deploy across their networks. And then they can turn around and give those customers exactly what they want.
At least, that’s what the cloud tech companies like to argue.
“The cloud is cheaper, but that isn’t really what is driving companies into it,” said Greg De
Michillie, the director of Google’s cloud business for corporations. “They want to be more experimental, faster, data driven. This is part of a larger change inside companies.”
Authored by Quentin Hardy via nighttime.com.
Ever since the debut of the iPad nearly five years ago, pundits have been talking about the possibility of a post-PC professional existence. But I’m actually living it; I haven’t touched a personal computer in six months and I’m more productive than ever.
If you could peek over my shoulder at the device I’m writing this column on, you might call me a liar. By all appearances, my notebook computer, with its 13-inch screen, trackpad and keyboard, is a PC.
And yet Gartner, the most influential company charged with determining what is and is not a personal computer, has declared that my Samsung ElectronicsChromebook 2 isn’t a PC. Gartner doesn’t include sales of Chromebooks in its quarterly tally of how many PCs are sold.
“We define a PC as a device which is capable for both content consumption and creation, regardless of form factor,” says Mikako Kitagawa, Gartner’s lead PC analyst.
I guess I’m not a content creator.
Chromebooks, in case you haven’t touched one—and market research indicates that you haven’t—are Google ’s answer to Windows and Mac computers. Gadget reviewers who use Chromebooks only when they are paid to often describe them as more limited than a typical PC. But people who use Chromebooks regularly are more likely to observe that they can do pretty much everything that the average PC user needs.
To be fair to Gartner, many Chromebooks, including my own, have the same innards as smartphones so, at least on paper, they seem underpowered. Samsung’s Chromebook 2 has the same processor, amount of memory and even number of screen pixels as Samsung’s flagship smartphone, the Galaxy S5. The only reason the Chromebook 2 works as a PC is that Google’s Chrome operating system is incredibly lightweight—smaller and less taxing on hardware.
I don’t mean to shill for Chromebooks. It’s just that Google is in the vanguard of creating PCs that function like smartphones: light, portable, always on, always connected and relying on the cloud to do their heavy lifting. It’s pretty obvious that in the not too distant future, Apple and Microsoft are going to free their fans from the PC in the same way.
Apple Chief Executive Tim Cook has said that he does 80% of his work on an iPad. I bet it would be 100% if the iPad possessed the characteristics that allow you to create content rather than just consume it: true multitasking and fast switching between applications, plus a bigger screen. But there’s evidence that a larger, so-called iPad Pro is coming. And I bet that Apple eventually will give us a version of its mobile operating system that makes iPads true replacements for notebooks, even those made by Apple.
Then there’s Microsoft’s Surface Pro 3, which is a full PC in tablet form, one of the many two-in-one notebooks that PC makers have been rolling out lately. From the processing power these hybrid devices pack to their snap-on keyboards, they are clearly designed to get real work done.
Yet were I a Surface Pro user, I still wouldn’t be using a PC, according to IDC, Gartner’s leading competitor for tallying how many PCs are sold each year. But Gartner does consider the Surface Pro a PC. According to Jay Chou, IDC’s senior analyst in charge of tracking PCs, the firm doesn’t consider anything with a detachable keyboard a PC. His firm does consider Chromebooks to be PCs, even though the Surface Pro 3 is far more powerful than most Chromebooks.
That Gartner and IDC can’t even agree on the definition of a PC speaks volumes about the strange times in which we live. Is a smartphone stretched into the shape of a laptop a PC? No, says Gartner. What about a PC crammed into the shape of a tablet? Nope, counters IDC.
These delineations are ridiculous from the perspective of the end user. That’s because most of us are entertaining ourselves and getting work done in the one place absolutely all of these devices can access—the cloud.
I store and edit all my photos in the cloud, which also is where all my media are streamed from. Unless you’re editing video, building 3-D models, playing elaborate games or dependent on legacy Windows applications that your company hasn’t moved to the cloud, you don’t strictly need a PC anymore.
At this point in history, booting up a full-fledged PC operating system to write an email is like using a nuclear sub to go on a weekend fishing trip. And a good Chromebook can be had for $300. Personally, I’d rather spend my technology budget on the one thing I truly can’t do without—my smartphone. Surveys indicate that in this respect, I’m typical of every generation to follow the baby boomers.
In short, I’m done with PCs—at least as they are conventionally defined. And I think the majority of long-suffering PC users would be too if they weren’t so accustomed to thinking of computers in the same way they have for decades. Building new technology is easy compared with changing the habits of those who use it.
—Follow Christopher Mims on Twitter @Mims and write to him at firstname.lastname@example.org.
With each corporate cloud computing proposition, including those from the likes of Google, whose Oregon data center is seen here, there appears to be an increasing trend toward offering more flexible applications driven by software.Credit Connie Zhou/Google
Cloud computing isn’t merely changing the way much of the technology business works. Now it is changing itself, and putting even more computing power in more places.
On Monday, Microsoft, which operates one of the biggest so-called “public clouds,” or large and flexible computing systems available for remote rental, announced several changes to its data storage and processing services that will make them more powerful.
Microsoft also announced a partnership with Dell to sell a kind of “cloud in a box,” or hardware and software that created a mini-version of Microsoft’s cloud, called Azure, inside a company.
The idea is that a company could work with its own version of Azure, then easily move up to the giant version Microsoft has to handle big workloads. Hewlett-Packard may be after something similar with its effort to create a private-public cloud business based on the HP cloud, which uses a kind of open source software.
What all of this means is that cloud computing, which makes it easier to tie more things to computers and more easily manage software, is starting to appear in even more forms and types. Within each corporate proposition, including Google and Amazon, as well as Microsoft, HP and others, there appears to be an increasing trend toward offering more flexibility. Generally it’s done by abstracting what were functions of specialized hardware into more easily altered software.
Microsoft’s announcements this week came after the news last week that it would offer Windows Server technology on Docker, a fast-moving open source project (and start-up company of the same name) that takes cloud-type software abstractions even farther. Docker’s so-called “containers,” which were previously available on the Linux operating system, make it possible to build, deploy and update a software application anywhere in the world.
Adding to this confusing paradise of computing power, flexibility, and global software deployment, on Wednesday a company called Bracket Computingannounced that it had a technology that makes it possible to run high-performance corporate computing systems across several public clouds at the same time.
While it now works only with different geographic locations inside the global cloud of Amazon Web Services, Bracket hopes eventually to enable companies to securely manage their computing across several public clouds at once. This kind of brokering, if successful, could mean further competition among the public clouds, either on price or service.
People who had worked with the Bracket System were impressed. “Even just with A.W.S., this is powerful,” said Frank Palase, senior vice president of strategy at DirectTV. “Abstracting over several cloud providers would mean we could have high levels of performance with no fear of outages,” since one system could be brought up if another failed.
It’s also possible that Bracket’s Computing Cell could hold containers, like Docker, inside its system.
For all the new terminology and hand-waving around these developments, at least one thing is clear: The cheap and easy cloud is also catching up in areas like reliability and management ease, where it has been criticized. Like all big computing trends, it has started rough, but it appears to be stabilizing and getting bigger.
Authored by Quentin Hardy via nytimes.com.