Originally Published in The Wall Street Journal | May 29, 2013 | By Michael Hickins
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Good morning. A complex maze of government and self-imposed regulations will make it increasingly difficult for CIOs to serve their business partners, but may also become a detriment to efficient health care. Consumers are gaining more power to choose how their data is used, but may not always understand the impact of their choices. While the choices they make could cause reputational risk for retailers and other consumer-facing businesses, those choices could have a far more devastating impact on their health care — and their providers.
A new provision of the Health Insurance Portability and Accountability Act requires health-care providers give patients the ability to control how their data is shared with insurers and other hospitals and doctors. Scott Joslyn, CIO of MemorialCare Health System, tells CIO Journal he’s concerned that clinicians would “lack a complete medical picture” for those patients who choose not to share data. John Halamka, the noted CIO of Beth Israel Deaconess Medical Center, and co-chair of a federal advisory committee on data standards, says this problem can be solved with existing technology, but others are unsure the outcomes will be beneficial for all patients.
The challenge for CIOs in other industries may be less dire, but the problem remains as complex. Consumers may not always understand the impact of the choices presented in terms and conditions they accept on websites; as a result, they could either be disappointed in the low frequency of meaningful offers or, conversely, angered by what they see as overly intrusive promotions. CIOs will have to determine not only the mechanics of their marketing tools, but the underlying philosophies that guide how privacy controls are presented to their customers.
Tech manufacturing’s homecoming could help U.S. CIOs. Technology companies are slowing down the offshoring of manufacturing to the point where domestic tech manufacturing jobs will grow (slightly) by 2018. A new report by Jones Lang LaSalle Inc., a real-estate services and investment firm that helps tech companies find sites in the U.S., cited rising costs of doing business in Asia, combined with changes in manufacturing theory for the change. Greg Matter, vice president at Jones, tells CIO Journal that “regionalization”–as opposed to the globalization– of tech manufacturing will benefit CIOs. “Regionalization will improve the flow of information, because you will have your C-suite and production units within proximity to one another.”
Cisco workshops ease generational clash. Cisco Systems Inc. has found its Millennial Boot Camp, a three-hour program to teach new workers and their managers to communicate effectively, to be an effective way to keep culture clash between generations at a minimum. Tactics taught include encouraging so-called Millennials, born between 1982 and 2000, to not check-in for affirmation too often and risk annoying their Generation X bosses–born between 1965 and 1982–who are more used to working independently. Horror stories are rife. The VP of IT customer strategy tells CIO Journal of how a young intern went straight to the head of sales with a question. “My team was mortified,” he said.
Apple’s Cook hints at wearable devices. Apple Inc. CEO Tim Cook, defending the company’s prowess as a tech trend-setter, hinted that wearable devices may play a role in future product plans, report the WSJ’s Shira Ovide and Evelyn M. Rusli. “We have several more game changers in us” that the company has been “working on for a while,” Mr. Cook said during Tuesday’s opening interview at the D: All Things Digital conference. Mr. Cook praised devices such as Nike Inc.‘s FuelBand, an activity tracker worn on the wrist. He said such wearable products “could be a profound area for technology,” while expressing less excitement about Google Glass. He said it’s “tough to see” Google’s product having mass-market appeal. Mr. Cook also hinted that Apple’s iOS software powering its iPhone and iPad, and the separate operating software for its Mac computers, are set for a major upgrade, to be discussed at Apple’s software-developer conference in June.
Hospitals use sensors to encourage handwashing. Faced with the loss of funding, hospitals are using sensors to help make sure that employees are washing their hands, a basic disease-fighting technique that is often neglected, the NYT reports. At North Shore University Hospital, on Long Island, sensors trigger a video camera, which transmits its images halfway around the world to India, where workers are checking to see if doctors and nurses are performing the critical procedure, the NYT says.
One-third of European companies were breached last year. Nearly one-third of general counsels at European companies say their firms experienced a cybersecurity breach in the last year, according to a new survey released Tuesday by Consero Group LLC, and over half said their companies were unprepared to defend against future breaches, reports Risk & Compliance Journal’s Christopher Matthews.
Apple’s legal victory over Samsung may be hollow. Apple’s $1 billion legal victory against Samsung last summer was hailed as a watershed moment in the smartphone patent wars, but the decision is looking more and more like a high-water mark that may never be surpassed, the FT’s Tim Bradshaw reports. Judge Lucy Koh, who oversaw last summer’s trial, has vacated almost half of the damages that the jury awarded to Apple, saying its methodology was flawed, and a new trial could raise or lower the final amount the iPhone maker receives. In the U.S., the Patent and Trademarks Office has suggested that some of the patents Apple’s case rested on may be invalid. “What at the outset might seem to be a meaningful victory really doesn’t do anything,” Erin-Michael Gill, chief intellectual property officer at MDB Capital Group, a patent-centric investment bank, told the FT, adding: “If anything, this has lit a fire under a very substantial competitor.”
Chicago man pleads guilty in hacking case. A Chicago man who used the moniker Anarchaos has pleaded guilty to breaking into computer systems used by intelligence firm Stratfor in 2011, the WSJ’s Kristin Jones reports. Federal prosecutors allege Jeremy Hammond and other members of AntiSec, an offshoot of the hacker group Anonymous, stole credit-card and other confidential data from Texas-based Strategic Forecasting Inc. As part of his plea, Mr. Hammond also admitted his involvement in a series of other hacks, including the June 2011 intrusion into the Federal Bureau of Investigation’s Virtual Academy, and the August 2011 hack of systems used by Texas-basedVanguard Defense Industries.
Facebook says it failed to bar posts with hate speech. Facebook Inc. on Tuesday acknowledged that its systems to identify and remove hate speech had not worked effectively, as it faced pressure from feminist groups that want the site to ban pages that glorify violence against women, the NYT’s Tanzina Vega reports. “We thought that advertisers would be the most effective way of getting Facebook’s attention,” said Jaclyn Friedman, the executive director of Women, Action and the Media. David Reuter, a spokesman for Nissan, said that the auto maker has stopped all advertising on Facebook until it could assure Nissan that its ads would not appear on pages with offensive content.
Nokia loses lead in its home market. For the first time, Nokia Corp. no longer leads mobile handset market share in its home country, reports to the WSJ’s John D. Stoll. The Finland-based device maker slipped to number two during the first quarter behind Samsung Electronics Co. A year ago, Nokia had a 48% share of the Finnish market, compared with 28% for Samsung, IDC said. Samsung now leads Nokia 36.1% to 33.65%, IDC said.
EU to ask more of Google. The European Union’s competition watchdog is likely to ask Google Inc. to make further concessions to address the concerns of competitors who have complained about the way the Internet search giant displays results, EU Commissioner Joaquín Almunia said Tuesday. The demands come shortly after Google submitted plans to tweak how its search results are displayed, after competitors said it was treating them unfairly, reports the WSJ’s Frances Robinson and Tom Fairless.
U.S. alleges $6 billion digital money-laundering operation. Months after officials warned that digital currency exchanges should follow traditional anti-money-laundering rule, federal prosecutors filed criminal charges against seven men who allegedly set up an Internet-based currency and used it to launder $6 billion in criminal proceeds, reports the WSJ’s Reed Albergotti and Jeffrey Sparshott. For about seven years, Costa Rica-based Liberty Reserve was a “bank of choice for the criminal underworld,” according to the indictment. The firm, which converted traditional currency into Liberty Reserve dollars through third-party “exchangers” was not associated with bitcoin.
Tablet sales to dominate PC sales by 2015. Tablet shipments are set to overtake the PC market by 2015, says a new report from IDC. The researcher also expected tablet shipments to increase 59% to 229.3 million units this year and PC sales to decline 7.8% to just above 322 million units for the same period. More users realize that everyday computing doesn’t require a full PC, IDC analyst Loren Loverde tells All Things D. “Instead, they are putting a premium on access from a variety of smaller devices with longer battery life, an instant-on function, and intuitive touch-centric interfaces.”
Mozilla, Foxconn plan mobile device. Mozilla and Foxconn are preparing jointly to launch a mobile device, a deal through which the not-for-profit software maker hopes to push its mobile operating system and the world’s largest electronics manufacturer by revenues aspires to move beyond its pure contract business, the FT reported. Mozilla confirmed the plan but declined to give details whether the device, to be announced in Taipei next Monday, would be a smartphone or a tablet, according to the FT. Foxconn faces rivals who are bidding for its contract manufacturing business with Apple and other companies. Mozilla, which makes the Firefox browser, wants to challenge Google’s Android mobile operating system.
EU probing Apple’s iPhone carrier deals. The European Commission has sent a questionnaire to European wireless carriers in a move to determine if Apple’s iPhone distribution deals hamper competition, reports All Things D’s John Paczkowski. But before the EC can open a case, it needs to recognize Apple as the dominant smartphone vendor in the market, Mr. Paczkowski add. Market leader Samsung may have something to say about that.
Yahoo gets more competition in Hulu bid. Video business Hulu LLC picked up two more bidders yesterday, reports Bloomberg. KKR & Co. and Silver Lake Management LLC made separate bids for the Web-video service owned by Walt Disney Co., News Corp. and Comcast Corp. Hulu reached out to potential buyers in March, attracting offers from Yahoo Inc., Guggenheim Digital and media mogul Peter Chernin.
Intel picks up chip business. Intel Corp. picked up a satellite navigation chip business unit from an STMicroelectronics NV, Ericsson joint venture. “This is the sort of acquisition that Intel would want to make in order to fill out its offerings in the mobile arena,” All Thing D’s Arik Hesseldahl writes. The purchase also marks the first for new Intel CEO Brian Krzanich.
Softbank-Sprint deal clears security hurdle. SoftBank and Sprint Nextel, seeking approval of a $20 billion takeover deal, reached an agreement in principle with the U.S. government on a plan aimed at protecting national security, the WSJ reports. The security agreement would clear the biggest regulatory hurdle facing the Japanese telecom company’s proposed acquisition. The deal also would give the U.S. government veto rights over Sprint’s equipment purchases, and would require Sprint to remove some Chinese equipment from one of its affiliate’s networks by the end of 2016.
EVERYTHING ELSE YOU NEED TO KNOW
Surging home prices fuel hopes for recovery. Home prices in March were up 10.2% from a year earlier, according to the S&P/Case-Shiller index, the largest annual gain since prices began to fall in 2006. Meanwhile, the Conference Board said its consumer confidence index in May increased to the highest level since February 2008, the WSJ reports. The improvements in housing appear to be boosting confidence and spending, countering fears that consumers would pull back in response to the end of the payroll-tax holiday and government spending cuts that started in March, the NYT notes. But Lynn Franco, director of economic indicators at the Conference Board, tells the Washington Post that while budget wars and the payroll-tax increase damped consumers’ mood over the winter, Americans have “absorbed it. They’ve processed it.”
IMF cuts China forecast. The IMF lowered its forecasts for China’s growth and said making “decisive” policy changes would put the economy on a more sustainable path, Bloomberg reports. Expansion will be about 7.75% this year and next, said David Lipton, first deputy managing director of the IMF. In April, the IMF forecast growth of 8% this year and 8.2% in 2014. Mr. Lipton warned of risks from a record expansion of credit, with the revised outlook following an unexpected slowdown in the first quarter.
European Commission to pull back from austerity stance. The European Commission today will give its clearest signal yet that it’s moving away from austerity, allowing three of the EU’s five largest economies to overshoot budget-deficit limits and pushing instead for broader reform, the FT reports. In its annual verdict on national budgets of EU members, France, Spain and the Netherlands will be given a waiver on the annual 3% deficit limit. Brussels will also free Italy from intensive fiscal monitoring despite its new prime minister’s decision to reverse a series of tax increases imposed by his predecessor.
China’s Shuanghui buys Smithfield Foods. Shuanghui Group agreed to acquire Smithfield Foods Inc. for $4.7 billion, the Chinese meat producer said Wednesday. The sale of the Smithfield, Va.-based pork and meat producer comes on the heels of agitation from a large shareholder to split up the company, the WSJ notes. The $34-a-share bid by Shuanghui, also known as Shineway, represents a roughly 31% premium over Tuesday’s close of $25.97.
Dell buyout battle nears key phase. The battle for control of Dell is about to move into a new, heated phase, the WSJ notes. The lobbying process can begin once the SEC blesses a final version of the deal proxy, which details discussions leading up to the buyout deal and the financial rationale of the directors who approved it. With that approval, expected this week, Dell can file a final proxy and set a date for shareholders to vote on whether to accept the Silver Lake-Michael Dell offer. The document will likely set a July date for the vote.
Tom Loftus contributed to this article.
CORRECTION–This post has been updated to correct the description of MDB Capital Group. It is a patent-centric investment bank, not an investment advisory firm.