Microsoft Employees Are “Worn Out” Over So Much Change
As news broke on Wednesday that part three of Microsoft's huge multi-phase layoffs had occurred, employees at the company are having mixed feelings.
Not surprisingly, all this change "wears on" a lot of Microsoft's employees, said a former employee who left the company shortly before the big layoff was officially announced in July.
Remember even before it was announced, employees spent months waiting for news of a layoff as a consequence of the company's $7.2 billion, 25,000-employee acquisition of Nokia.
But it's not really the layoffs per se dragging employees down.
"Constant change is not healthy when have an organization of over 100,000 people," our source explained.
"There's a whole set of people that can't deal with that constant change and at Microsoft there has definitely been a lot to deal with. Remember right before Ballmer left, he announced a bunch of stuff, the One Microsoft strategy, the Nokia acquisition. He had a plan that was to take us through the next few years," the source added.
This employee describes Nadella as "awesome" but said that he's now "putting his own plan in place and when you have these transitions and they keep continuing, that sort of thing wears on a lot of people."
And this isn't just about if they will keep their job or not. It's also about if the projects they care most about will continue or be cancelled and if their teams and co-workers will change. Most importantly, it's about if they feel their work will be important both to the company and the world.
On the other hand, other employees, particularly long-term folks are kind of happy with all this change. Some people feel that "change is good, particularly change that takes you in the right direction," this source said.
And right now, it does look like there is a "new" Microsoft going in a better direction. Nadella is striking up partnerships with its former rivals, changing the way products are built, and trying to overhaul the corporate culture.
Competitor-turned-new-partner Salesforce.com CEO Marc Benioff says he's delighted and shocked by the changes.
Although CEO Satya Nadella still has to prove he can make a new direction work, he is starting to better articulate it.
He says Microsoft's goal is to "reinvent productivity." That means creating new software and cloud services that work across any mobile device, as well the PC and in the living room.
He's defining "productivity" loosely as stuff we accomplish at home and at work. So it's a little hazy as to what our lives will look like once Microsoft reinvents it for us.
Some new products in this theme are starting to trickle out.
One example is a new tool for Office 365 called "Delve" which sifts through our inboxes and documents hoping to showcase the stuff we really need to see.
But the bottom line is that the company is changing, and for many people change is scary.
Microsoft had no comment.
All of Facebook’s Revenue Growth Is Coming From Mobile Ads
Facebook reported earnings for its fiscal third quarter of 2014 on Tuesday. Revenue and earnings per share were slightly above Wall Street's expectations—it reported $3.2 billion in total revenue and $2.96 billion in ad revenue, a 64 percent increase from the year-ago quarter—but other metrics like monthly active users fell right in line.
Based on company data charted for us by BI Intelligence, most of Facebook's revenue growth is coming from mobile advertising and payments. Non-mobile revenue and revenue from payments and fees like in-app purchases through Facebook continue to remain consistent, but mobile revenue has exploded since 2012, as it now makes up roughly 66 percent of Facebook's total revenue.
See also: Why People Are Leaving Facebook for Ello
Can You Really Assemble Ikea’s New Furniture in Five Minutes?
This video originally appeared on Business Insider.
Ikea recently unveiled a new line of furniture called Regissör. The company claims it takes less than five minutes to assemble, and they even released a video showing someone putting together a bookcase in 3½ minutes.
Additional camera by Justin Gmoser.
Retailers Have Started a War Against Apple Pay They Can’t Win
Apple Pay, the new mobile payments system from Apple, is barely a week old, but it is already being attacked by the merchants it is supposed to be making things easier for.
The war over mobile payments may be in its early stages, but it is one big retailers are poised to lose by not playing along with Apple.
On Saturday, the pharmacies Rite Aid and CVS disabled Apple Pay from their stores, even though they have the compatible equipment that was working when Apple Pay launched last week. They also blocked Google Wallet, a similar system for Android phones that Google launched in 2012.
Neither Rite Aid nor CVS will specifically say why it decided to disable Apple Pay, but it seems to be because each is part of the Merchant Customer Exchange, a consortium of the biggest retailers in the US. MCX happens to be working on its own mobile payments app, CurrentC, which is in beta testing and is expected to launch next year.
But by all accounts, CurrentC is a mess and much more difficult to use than Apple Pay. For starters, it works only with your checking account, meaning you can't load your regular credit cards as you can with Apple Pay. It also requires you to scan a barcode to make payments, something proved to not be as secure as near-field communication and other encrypted technology used by Apple Pay and Google Wallet. Finally, CurrentC will allow merchants to track what you buy and store that data, something Apple Pay doesn't allow.
MCX's public relations department, CEO, and COO did not respond to multiple requests for comment. CVS' statement Monday confirmed only that the retailer would not accept Apple Pay and would launch its own mobile payments system soon, presumably CurrentC. Rite Aid has not yet made a statement.
But the drug stores' move and MCX's impending mobile payments app is already ruffling feathers at Apple and its credit-card partners like MasterCard.
"They've taken away an option from consumers, and they haven't done anything to replace it," said James Anderson, MasterCard's senior vice president of emerging payments, in an interview with Business Insider. "You'd think they would've had something in place. But we're happy to compete with it."
Apple's public take on the dispute is much more diplomatic, but the implication is clear: Early feedback of the system from customers and retailers is really good, and the retailers that are not joining or that are finding ways to block Apple Pay are going to miss out.
Here's what an Apple spokesperson told Business Insider on Monday:
The feedback we are getting from customers and retailers about Apple Pay is overwhelmingly positive and enthusiastic. We are working to get as many merchants as possible to support this convenient, secure, and private payment option for consumers. Many retailers have already seen the benefits and are delighting their customers at over 220,000 locations.
It's a competition the MCX retailers are ultimately going to lose.
As John Heggestuen of Business Insider Intelligence points out, customers are already asking for what Apple Pay provides. They want a solution that's secure, available where they shop, compatible overseas, and available on the devices they love, namely the iPhone.
There's no evidence CurrentC can provide all of that.
Then there's the statement from Wal-Mart, one of the big leaders of MCX, on why it won't accept Apple Pay. Emphasis added:
There are certainly a lot of compelling technologies being developed, which is great for the mobile-commerce industry as a whole. Ultimately, what matters is that consumers have a payment option that is widely accepted, secure, and developed with their best interests in mind. MCX member merchants already collectively serve a majority of Americans every day. MCX’s members believe merchants are in the best position to provide a mobile solution because of their deep insights into their customers’ shopping and buying experiences.
Apple Pay may not be widely accepted yet, but it uses technology that is relatively easy for retailers to implement. It's also secure, arguably more secure than a credit card because your credit card number isn't actually stored on your phone. It also works only with the user's fingerprint, so unless a thief is able to get your phone and chop off your thumb, you don't have to worry. And it's simple to set up and use.
There's also a strong chance that while credit-card companies are open to trying different payment platforms, they might not partner with MCX's CurrentC. According to two sources familiar with major credit-card companies and their plans for mobile payments, CurrentC might not use the same kind of secure technology that encrypts your credit-card number as Apple Pay does. So while credit-card companies may be open to trying new things, their reception might be a bit chilly toward CurrentC if it's clear that it won't be safe for customers to use.
It's clear that the retailers of MCX are digging their own graves. Two of them have eliminated a viable mobile payments system without providing an alternative. The rest have chosen to ignore Apple Pay altogether. And it's all resting on CurrentC, a payments app that's more difficult to use and potentially not as secure as Apple Pay.
The most likely scenario: MCX retailers will go ahead and launch CurrentC. It'll be a dud. And before long, Apple Pay, Google Wallet, and similar mobile payment methods will become the new standard.
See Also: 5 Apps That Will Do Chores for You
Urban Engineers Are Trying to Solve Traffic Jams
Nobody likes traffic jams. And we may not be forced to live with them for the rest of our lives.
Young startup Urban Engines hopes to solve traffic jams by applying the lessons learned from keeping the internet up and running.*
If anyone can do that, it's the founders of Urban Engines. Balaji Prabhakar is a Stanford professor and one of the world's authorities on "internet congestion" or how to keep internet sites up even when they get pounded with traffic.* Ditto for Shiva Shivakumar, who spent 10 years as an engineer at Google working his way up to vice president and helping build products like Gmail and AdSense.
Their idea is to watch real world traffic so cities can make changes on the fly when they see traffic problems coming, much the same as big internet companies like Google watches their websites.
The idea hit Prabhakar in December, 2007, when he was late for a meeting and "stuck in the mother of all traffic jams," he recounted to Business Insider. It occurred to him that street traffic and internet traffic are the same problem, too many people trying to get to the same place at once. He had helped solve internet congestion, could he do the same for real live traffic?
Shivakumar had a similar epiphany while working on Gmail. His team had just figured out how to a make each email open 50 milliseconds faster.* "That was a big deal. We had a few hundred million people using Gmail" so when you added up all those milliseconds, "it was a lot of time," he told Business Insider.*
He started wondering "how you could apply that 50 milliseconds savings to the real world to really give people back a lot time." He enrolled in Stanford to study the problem and met professor Prabhakar and the genesis of a cool new startup, Urban Engines, was born.
When a city can treat its transit systems the way Google treats its website, it can see when a traffic jam develops and take immediate steps to solve it, like shifting extra trains to the congested area, or re-routing buses and so on.
A lot of companies are trying to sell cities millions of dollars of new sensors and equipment to build "smart cities" that can do this sort of thing. But Urban Engines discovered that you could track traffic using city-issued items people were already using, like their bus and train passes.
It built a system, which it sells to cities, that collects data from these items, so they can predict traffic problems in real time. "You don't need to install more sensors," Shivakumar tells us. This should make it more affordable for more cities to attack the traffic jam problem. Maybe one day, a traffic jam could become as rare an event as a Google outage.
Urban Engines has not revealed how much money it has raised but it is backed by heavy hitters Google Ventures, Andreessen Horowitz, Google executive chairman Eric Schmidt, early Google investor and board member Ram Shriram, SVAngel, Greylock Partners, and Samsung Ventures.
See Also: The Apple-IBM Partnership Bears Fruit
Correction, October 29: This article originally misstated Balaji Prabhakar's credentials. He is a professor at Stanford, not a former professor. It also misidentified Urban Engines as UrbanEngines, and Google has sped up opening Gmail by 50 milliseconds, not nanoseconds.
Inside Wall Street's New Tug of War
The financial crisis did curious things to Wall Street. Firms were gone overnight, once-powerful CEOs were never heard from again, and a whole new regime of power reorganized itself from the chaos.
This is the kind of environment in which typically buttoned up trade publications write headlines like the following: "How Merrill Lynch's divorce of its own $2.5-billion team shows just how fed up the wirehouse is with RIA-bound breakaways."
The "wirehouses" are big Wall Street firms. An "RIA" is a Registered Investment Advisor. And that headline is about a Wall Street firm kicking a $2.5 billion team out the door—allegedly for not telling their clients to buy into a hedge fund the firm was pushing.
Now the team in question can strike out on its own, something a lot of teams are doing these days for better or worse. Wealth management—once considered the boring part of Wall Street's business—has become incredibly profitable. Big banks that doubled down on it after the crisis, like Morgan Stanley, are reaping the rewards.
But they're also losing bodies to these "breakaways"—the independent channel—which will have increased by an estimated 15,000 people from 2007 to 2017 while big banks, regional banks and others will have seen their head counts shrink by the thousands.
So as you see, what we have here is a good old-fashioned debate about the best way to run money.
"While the [independent] adviser may initially be attracted by a higher payout," said Gary Kaminsky, the Vice-Chairman of Morgan Stanley Wealth Management, "It's never been clear how that benefits the client."
What Kaminsky and Morgan Stanley are clear on is what they can provide—an "open architecture" format where their experienced portfolio managers can advise their clients on whatever products they want, the ability to design products, and access to an investment bank.
It's a mix that's been working for Morgan Stanley. Since the financial crisis the bank now has $2 trillion assets under management in its wealth management division. In the third quarter net revenues were up to $3.8 billion from $3.5 billion at the same time the year before.
"If we assume that institutional securities businesses should trade at roughly 10x earnings, that implies MS's wealth and asset management business trades at a several turn discount to peers," said a recent report by UBS. "Separately, we believe MS has a far stronger WM franchise and brand than the regional brokers and actually should command a premium."
This has made Morgan Stanley the envy of the Street—and even Goldman Sachs, more identified with its trading culture, is getting into the game.
"At the end of the day advisers who have tried the independent route find they spend the bulk of their time on operations, HR etc.," Kaminsky added. "When they leave the full service world they are disappointed."
It's true, the challenges of running a business while also running a portfolio can be daunting, but advisers that have left say that the independence to manage their businesses the way they like, the freedom to invest the way they like, and of course—the economics are better for them.
"The opportunity to maintain more of the revenue and balance your own profits & losses. Your net payout is not determined by corporate structure, rather how well you manage your growth and expenses With payouts ranging anywhere from 85% to 100% depending on your business structure, the independent model has far greater potential upside," said Guy Adami, Chief Market Strategist at Private Adviser Group.
Private Advisor Group represents a sort of middle ground. It's a network of advisors that pool resources and support to create a community.
This is an idea that's catching on quickly. Instead of striking out on your own entirely as an independent, you join up with a firm that helps you with the back and middle ends of your office—with your marketing, with your business model, with financing and getting a good price on investment products.
Dynasty Financial Partners, an emerging powerhouse in this space, handles everything from vendor relationships and oversees expenses for members of its networks. It will find a member's office, set up their website, and take care of issues regarding succession.
"We are entrepreneurs ourselves, serving entrepreneurs," said Dynasty CEO Shirl Penney, adding that his members get the bonus of being a part of a community of business people working toward a common goal.
As for the clients his members serve, Penney said that they benefit from separating where products are made (inside investment banks) and where they are sold.
That's something he believes clients are beginning to understand more and more.
"Assets in our industry are only going one way," said Penney. "And the life blood of our industry is assets."
See Also: Bye Bye Barbie
Don’t Get Used to Mobile Apps—Their Days Are Obviously Numbered
A few years ago, everyone was creating desktop-first startups. Now you're behind if you're not building a mobile application first, and a website second. Apple blogger and Google Ventures partner MG Siegler believes the first app you open in the morning is the equivalent to the new homepage on a web browser.
But apps are very clearly not going to be around forever. Certainly not in their current, bulky square form. There isn't enough mobile homepage real estate for each of the web's 500-million-plus active websites to have its own app and for everyone to download all of them.
Mobile apps are popular right now because mobile search is terrible and they lay out content in a small-screen-friendly way. If apps do stick around, they may transform more into bookmarks, where people have only a few favorites on their home screens, and all other mobile content can be accessed some other way.
"There is no doubt what we have today—screens of apps—is going to dramatically change," former Googler and Facebooker Paul Adams writes on Intercom, where he's now vice president of product. "The idea of having a screen full of icons, representing independent apps, that need to be opened to experience them, is making less and less sense."
Intercom thinks that apps might still exist in the future but will serve as notification systems that push content as necessary — not big bulky apps that take up prime homepage real estate on our phones. Notifications are getting more interactive, too, letting you text message someone back or take an action without fully firing up the app.
How could simple notifications fulfill all the needs of current apps? Adams thinks they'll morph into content cards, which will allow users to see more information and take more actions straight from a pop-up. Adams believes you'll be able to book a table, send an email, or post to Facebook all without unlocking your phone.
The cards could eventually become personalized and ordered by favorite sources, most important contacts, etc.
This will become increasingly important as screen sizes decrease to the size of a watch face or glasses, or even jewelry.
"In a world where notifications are full experiences in and of themselves, the screen of app icons makes less and less sense," Intercom concludes. "Apps as destinations makes less and less sense. Why open the Facebook app when you can get the content as a notification and take action—like something, comment on something—right there at the notification or OS level."
See also: An Inside Look at the Starbucks App
Why a Professor Is Teaching an Entire Class About Beyoncé
You know you’ve made it when people recognize you by your first name. Cher, Robyn, and Madonna have all become single names, and now Beyoncé Giselle Knowles-Carter has too.
One of the best-selling artists of all time, the multi-talented performer and businesswoman is a superstar to millions around the world.
But to the professor Kevin Allred and 32 students at Rutgers University, Beyoncé is something more—a feminist, a gay icon, and a powerful political figure.
Allred teaches a wildly popular women’s studies course, Politicizing Beyonce: Black Feminism, US Politics, & Queen Bey.
The class is at capacity, and the room is cramped—especially because Allred encourages students to bring their friends. But that doesn’t stop them from rocking out to Beyonce’s greatest hits.
“They usually sign up because they're big fans of Beyoncé's music, but they quickly start to make connections beyond just being fans," Allred says.
Allred, 33, says he’s been a huge fan of Beyoncé for a long time, but he didn’t think of her as a political actor until he came across an essay by Yale Professor Daphne Brooks that linked the singer to black, female disempowerment.
“She argued that Beyoncé's 'B'day' album should be seen in the same trajectory as more explicitly recognized black female protest singers,” Allred says. “I was compelled by the article and began to use Beyoncé in my teaching to spark students' interest in having conversations around gender, sexuality, and race.”
Beyoncé’s music challenges many of society’s conceptions about gender, sexuality, and race, according to Allred, who says her prominence gives her political influence.
“Beyoncé is a political figure because she commands attention—perhaps the most attention of any entertainer today. People listen when she talks and people question things when she raises the question herself,” he says.
While Allred admits her influence isn’t explicitly governmental or legislative, he says she has the power to inspire cultural movements for change.
The Queen Bey wrote a note on gender inequality for the Shriver Report, hosted a high-dollar fundraiser for Barack Obama, is a champion of LGBT equality, and increasingly highlights feminism in her work.
"Her song lyrics also stress equality and partnership over traditional gender roles," Allred says. "Some songs even go so far as calling out the ways relationships and the ways we perceive sexuality are bound to fail because they have been based on these outdated stereotypes."
In a track from her latest album, Flawless, Beyoncé samples Chimamanda Ngozi Adichie's viral TED talk on feminism. The image the track produced when Beyoncé performed it at this year’s Video Music Awards was unmistakable. In letters 12 feet high, “FEMINIST” lit up the stage.
“I've already had students in my Intro Women's Studies courses that say they wanted to learn more about gender and take a class because they heard Beyoncé talk about it on the new album,” Allred says.
Gay men and women also identify with the artist. Allred says she frequently adopts lesbian styles by wearing suits and "men's" shirts, carries herself with a masculine swagger, and often jumps between gender styles—especially as her alter ego Sasha Fierce.
Speaking on the issue of same-sex marriage, and in a reference to her song "Single Ladies," Beyoncé said, "If you like it you should be able to put a ring on it." Her husband, rapper Jay-Z, said, "It's no different than discriminating against blacks—it's discrimination, plain and simple."
In Allred’s course, Beyonce’s music is paired with black, feminists texts, another love of his.
“That way, students are getting an education in the history of black feminist theory in the US, just using Beyoncé as the focal point,” he says. “I let them be pretty fan-oriented on the first day, but urge them for the remainder of the semester to push past that and engage academically.”
When he tells people what he does, Kevin says people are often surprised. “Tons of jaw drops, a lot of exclamations over how excited they are to hear that something like that exists. Overwhelmingly positive stuff,” he says.
"I've only ever had one really really nasty email that classes like mine would mark the end of the world," he added, but I eventually made peace with the guy and he's not so mad about it now."
Take a Rare Peek Inside the Massive Data Centers That Power Google
Data centers are typically shrouded in secrecy because they are the brains behind tech companies.
But not Google. The search giant has shared with the world photos that lift the veil off its massive and beautiful data centers around the world, in places both domestic, including Iowa, Oregon, Georgia, South Carolina, and Oklahoma, and abroad, in Finland and Belgium.
Google says when you're on its website, you're accessing one of the most powerful server networks in the known universe. Looking at these images, it's hard to disagree.
Google has been working on building its data centers for over 12 years. The search giant's centers are efficient, take advantage of renewable energy, and are as environmentally friendly as possible.
The following tour is a glimpse inside a few of Google's data centers, which it calls the "physical internet."
Our tour starts outside one of Google's data centers in Council Bluffs, Iowa. There is a family of deer outside to greet us.
Inside the Council Bluffs, Iowa data center, there is over 115,000 square feet of space. These servers allow services like YouTube and search to work efficiently.
This place is actually enormous!
In the campus network room, routers and switches allow data centers to talk to each other. The network connecting these sites can run at speeds that are more than 200,000 times faster than a typical home Internet connection.
Moving over to the Oregon data center, we see that this space is equally impressive.
Here is a view inside the Douglas County, Georgia data center. The colorful pipes send and receive water for cooling the facility. Bikes are the preferred method of transportation inside the massive center.
Google keeps pipes like these ready with highly-pressurized water, in case of a fire. The water is cleaned and filtered, so it won't contaminate the facility in the off chance they need to use it.
The blue LEDs on this row of servers let employees know that everything is running smoothly. Google has purchased 1000 megawatts of renewable energy to power these data centers now and into the future.
Failed drives are immediately destroyed on site. Google says this is part of its commitment to keeping users' data safe.
This is where all data is backed up. A robotic arm helps in loading and unloading tapes when employees need to access them. Each tape has a barcode so that the robotic arm can easily locate them.
This is rare look behind the server aisle. Hundreds of fans can be seen taking hot air up and away from the racks, cooling it, and recycling the air back through.
This beautiful view was taken outside of Google's data center in Finland which sits on the shores of a frozen gulf. This building was once used to house a paper mill.
Here is another view inside Google's facility in Finland. Server floors like these require massive space and efficient power to run all of Google's products. Google's data centers use 50 percent less energy than an average data center.
Running the machines to compute this much data can create some serious heat. That's where the coolant systems come in. Seawater from the Gulf of Finland entirely cools the data center there.
Inside the former paper mill is a gorgeous conference room. This is just outside of a sauna where employees can go to relax whenever they like.
Here is a group photo of the Hamina team enjoying ice fishing right outside of the office. Google says that they chose Hamina because the town "has the right combination of energy infrastructure, developable land and available workforce for the data center."
Kevin Smith wrote an earlier version of this post.
See also: Google's New Smartphone—The Nexus 6
Facebook Made $595 Million in the U.K. Last Year. It Paid $0 in Taxes
Facebook paid $0—zero—in corporation tax in the UK last year, despite making an estimated $596 million (£371 million) in revenue in the region in 2013, its latest financial filings with Companies House reveal.
Facebook is among other US companies such as Amazon and Starbucks that have been criticized in recent years because they generate substantial revenues in the UK but only pay a small amount (or in this case, nothing at all) in corporation tax. Facebook, like some of its US technology counterparts, funnels its UK sales via its Ireland subsidiary where corporation tax rates are lower, at 12.5 percent. In the UK the rate in 2013 was 24 percent.
According to the annual report and financial statements Facebook filed Tuesday with Companies House, the company declared $79.89 million (£49.8 million) in revenue in last year (up from $58.75 million in 2012, when it also paid no corporation tax). Research company eMarketer, however, has estimated Facebook generated $595 million (£371 million) in UK revenue in 2013.
The official filings also declare that Facebook posted an operating loss of $18.6 million (£11.6 million) in 2013. That’s up a substantial amount from the $3.85 million loss it posted in 2012—a period it has previously said was “an anomaly year” given the costs associated with its IPO. Corporation tax is only paid if a company posts a profit.
The company would have had to pay a UK corporation tax charge on its loss for the year of $5,089 (£3,169), but that was wiped out by a $292,024 (£182,027) adjustment credit made on previous periods.
The document says that this year’s “anomaly” accounting for its operating loss was “share based payments”, paid out to its 208 London staff, who have received big compensation packages as the company continues to perform well worldwide. It took a “share based payment charge” of $24.88 million last year (£15.5 million, up from $7.5 million in 2012). In total, UK employees collected 1.5 million free shares last year, currently worth $119 million based on the company’s current stock price.
Wages and salaries for its staff totaled $35.31 million (£21.99 million, up from $22.68 million), meaning the mean average annual Facebook UK employee salary was almost $170,000 (£106,000). It’s worth bearing in mind that all UK employees pay personal taxes on their income and stock-based compensation to the UK’s HM Revenue and Customs.
Facebook declined to comment when contacted by Business Insider.