Philly Enterprise Tech Daily Roundup 10/31: Foxconn, Honeywell, Biotelemetry, Dell Boomi

Tom Paine

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The Verge suggests that Foxconn may not deliver on what it committed to in Wisconsin, where Governor Walker promised a $3 billion subsidy in return for 13,000 new jobs at a new $10 billion plant.

But Pennsylvania tried, and Foxconn's mixed track record in living up to commitments is well established.

Honeywell completed its spinoff of its home automation tech business, now named Resideo, on Monday. on the NYSE. Honeywell also announced it was moving the headquarters for Resideo to Austin.

Malvern-based BioTelemetry (NASDAQ: BEAT) beat Wall Street expectations for both revenue and earnings . BioTelemetry shares have climbed 70 percent since the beginning of the year. It specializes in wireless cardio monitoring.

After struggling through periods when insurance carriers wouldn't reimburse for its expenses, the former Cardionet has rebounded, further spurred by an agreement last year with Appple to test monitoring heart activity through Apple Watch. BioTelemetry is at a $400 million annual revenue run rate, and its market cap is nearly $2 billion.

Dell Boomi announced that its 'new & improved" Boomi community site is now live.

Built on the Salesforce Community Cloud platform, the new Community will continue to offer Boomi customers all of the helpful content and programs they have come to expect, plus much more, says Boomi.

IBM acquiring Red Hat: How will it shake out?

Tom Paine

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Ginni Rometty, Chairman, President, and CEO of IBM, at right, 
and James M. Whitehurst, CEO of Red Hat, left
( From Press Release)

IBM should be nominated for being the most wasteful spender of capital in modern American business history.

GE would be in close competition.

Where has all the cash flow gone, just over the past 20 years?

Add up its M&A, R&D, CAPEX, and stock buybacks (I went through this exercise once), and its hard to see how what it has done has materially aided its overall, rapidly sliding marketcap, which is the real bottom line.

And the concern is history repeating itself. The real entrepreneurs will escape as soon as they're able to, IBM will eventually want to manipulate the organizational structure, people who have excelled under Red Hat will be buried under know-nothing IBM bosses, and the acquisition's energy will begin to atrophy. True, Red Hat's a more considerable asset than past acquisitions, and certainly IBM has smartened up and is effective in Linux / Open Source, but the track record is still there.

This acquisition doesn't give IBM domination over the cloud market. Certainly it will make it a bigger factor in the hybrid cloud market against Dell, maybe HP and some of the big consultancies. And IBM's position in public clouds may also improve to an extent, if nothing else from a spillover effect.

But Red Hat is such a big bet simply because IBM probably can't afford other acquisitions approaching that scale.

I've gathered the most compelling (and sometimes funny) online analyses of the deal that I've seen.

Philadelphia CIO Leadership Association Announces Recipients of the Inaugural CIO of the Year ORBIE Awards

Sunday, October 28, 2018
Philadelphia CIO Leadership Association Announces Recipients of the Inaugural CIO of the Year ORBIE Awards
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Executives from AmerisourceBergen Corp., Lincoln Financial Group, iPipeline and University of Pennsylvania Recognized for their Achievements

The Philadelphia CIO Leadership Association (PhillyCIO) announced the winners of its inaugural CIO of the Year® ORBIE® Awards. PhillyCIO recognized chief information officers in four key categories – Global, Enterprise, Corporate and Nonprofit/Public Sector. The ORBIEs were presented at the Philadelphia CIO of the Year Awards at the Loews Philadelphia Hotel.

“Today’s recognition of these CIO Executives’ ability to innovate and lead their organizations is the cornerstone of the Philadelphia CIO Leadership Association’s vision of developing transformative technology leaders who deliver business outcomes that impact their organizations, their industries, and our world,” said Melissa Sawyer, Executive Director of PhillyCIO. “Being selected by their peers is testament to the innovation, leadership and perseverance these individuals have mastered in earning this prestigious recognition.”

The 2018 Philadelphia CIO of the Year ORBIE Award winners are:

Dale Danilewitz, EVP & CIO, AmerisourceBergen Corp. - Global ORBIE companies over $700 million annual revenue & multi-national operations

Kenneth Solon, EVP & CIO, Lincoln Financial Group - Enterprise ORBIE for organizations over $650 million annual revenue

Brian Seidman, CTO, iPipeline - Corporate ORBIE, for organizations up to $650 million annual revenue

Thomas Murphy, University CIO, University of Pennsylvania – Nonprofit/Public Sector ORBIE, for government, education & not-for-profit organizations.

The CIO of the Year ORBIE Awards is the premier technology executive recognition program in the United States. Since inception in 1998, over 600 CIOs have been honored as finalists and over 170 CIO of the Year winners have received the prestigious ORBIE Award. The Award honors chief information officers who have demonstrated excellence in technology leadership.

Finalists and winners are selected by an independent peer review process, led by prior ORBIE recipients, based upon:

The size and scope of responsibilities
Leadership and management effectiveness
Business value created by technology innovation
Engagement in industry and community endeavors
The CIO Awards ceremony was keynoted by James (Jim) Whitehurst, President & CEO of Red Hat. Jim shared his industry experience and insight on how digital transformation is changing the corporation. Over 400 guests attended, representing leading Philadelphia organizations and their technology partners.

The 2018 Philadelphia CIO of the Year Awards was made possible by the following sponsors:

Gold sponsors: Insight/Commvault, PCM, Splunk, Red Hat, ConvergeOne
Silver sponsors: Flexential, Appian, Navigate, Brooksource, Deloitte
Bronze sponsors: NTT Data, FirstPRO, Neudesic, Pure Storage, Interra Consulting, Apella Group, Concord, Crystal Technologies, NuWare, Frontier Tech nologies, Melillo Consulting, Psiog, Workday, Cognizant, IBM, Zerto/High Availability, Between Pixels
Media partner: The Philadelphia Business Journal
About the Philadelphia CIO Leadership Association
The Philadelphia CIO Leadership Association (PhillyCIO) is the preeminent professional association for Philadelphia chief information officers. Our membership is comprised exclusively of CIOs (or equivalent executive roles) from public and private companies, government, education, healthcare and nonprofit organizations.

PhillyCIO is led by a CIO Advisory Board which sets the annual program agenda for the association. Events are facilitated by a full-time Executive Director and professional staff. PhillyCIO events are CIO-led and attended solely by CIO-level executives.

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Cerner talks about the future

Tom Paine

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Cerner's Malvern campus (Cerner website)

Kansas City-based Cerner, the healthcare systems vendor which owns the former SMS / Siemens business in Malvern, was down 11% on Friday after reporting a slight revenue miss.

But Cerner execs discussed the future outlook, which will be closely tied to its huge DoD and VA contracts, as HISTalk reports .

Population Health (its main offering in this space is named HealtheIntent) is Cerner's big bet for the future. The company expects the federal government business, along with the replacement market, to carry the company until HealtheIntent revenue grows. but it notes that its population health business has grown less than projected.

Two years ago Cerner said it would add 250 new jobs & invest $75M at its Malvern office.

Cerner revenue last year was $5.1 billion, and its market capitalization is $18.2 billion.

I'm not sure what the Malvern campus is doing, beyond supporting its existing installed base; I'll try to find out what's up.

ProPublica doesn't think much of Cerner:

Enterprise Bits / Small morsels of enterprise software news which, if taken together, may amount to something
10/26: Ellison tries to save the world; SAP, Amazon, MSFT earnings news

Tom Paine

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"McDermott said the cloud was 'where the customer wants us to go' while also playing up SAP’s push into Customer Relationship Management (CRM) with its recently announced C/4HANA suite.

'We are going to take over the CRM market, not because we are bold and innovative, but because the customers want the best end-to-end service,' he said".

Comcast partner Arris reported in talks with CommScope (Update 11/7: Deal done)

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Arris Group, a major supplier of software and systems such as modems and set top boxes to cable, and an important business partner to Comcast, is reported to be in talks with CommScope (Hickory NC) about a possible business combination.

Arris, based outside of Atlanta, has a sizable portion of its business in Montgomery County from its acquisition of Motorola's cable business from Google in 2013.

My first thought upon hearing this was that Arris was trying buy CommScope. But no; upon closer examination CommScope was the pursing party.
CommScope's market value at present is $4.7 billion; Arris' is $4.5 billion after a little runup over the past two days. A combination would most likely be a merger of equals.

While Arris makes smart electronic equipment, CommScope makes parts and components, so they are at different ends of the value chain.

Some analysts having rated the chances of anything coming out of the talks as being low, so we'll see what happens.

When you drive through the town of Hickory, you will quickly see that CommScope is the big business there. There is an enormous Apple data center a few miles outside of town, but it doesn't require many employees.

Update 11/7: CommScope agrees to buy Arris for $5.7 billion, excluding debt.

What Amazon Web Services is – and how it made Amazon profitable (CNBC)

What Amazon Web Services is – and how it made Amazon profitable from CNBC.

Bank Notes: Customers Bancorp's BankMobile teams up with T-Mobile; NCR buys JetPay

Tom Paine

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Customers Bancorp (Wyomissing) subsidiary BankMobile has been working since 2016 on a new product and technology partnership, a recent SEC filing indicated. The partnership is with T-Mobile. Customers Bancorp also said last week it had terminated its agreement to spin and merge BankMobile with Flagship Community Bank (FL).

Tha bank holding company said regulatory issues had made the Flagship transaction difficult to complete. It also said it planned to hold on to BankMobile for another two to three years.

No word yet on how T-Mobile will market BankMobile service.

Meanwhile, T-Mobile CEO John Legere found an opportunity to take a poke at Verizon, AT&T and Comcast:

NCR said it will buy Allentown-based JetPay for $184 million .

JetPay's founder, Bipin Shah, was renown in the payments business as the architect of Philly-based CoreStates Bank's MAC system for ATMs. It seems, though, that JetPay never achieved the commercial adoption it sought, but NCR sees its technology as useful.

Atlanta-based NCR said it will add JetPay’s cloud-based payments technology into its checkout systems.

In late September, JetPay announced the appointment of investor Laurence L. Stone as chairman of the Company’s Board of Directors, replacing Shah, who had been chairman since JetPay's founding in 2010.

Georgia is the payments capital of the U.S., processing some 70 percent of all debit, credit and gift card transactions in the nation each year, the Atlanta Journal-Constitution cited the American Transaction Processors Coalition as saying. Georgia is also the chicken-farming capitol of the US.

Qurate Retail Group Announces Initiatives to Deliver Long-Term Growth
HSN and QVC US will come together in new "QXH" business unit, while maintaining unique brand identities and St. Petersburg, FL headquarters for HSN

Qurate Retail Group Announces Initiatives to Deliver Long-Term Growth
- HSN and QVC US will come together in new "QXH" business unit, while maintaining unique brand identities and St. Petersburg, FL headquarters for HSN

- Expected to accelerate digital initiatives, drive growth, and increase total synergies by an incremental $120-$125 million

- Plan will integrate HSN and QVC US buying organizations and fulfillment networks, streamline operations at HSN


Qurate Retail Group
Oct 17, 2018, 09:05 ET


WEST CHESTER, Pa., Oct. 17, 2018 /PRNewswire/ -- Qurate Retail Group (QRG) today announced a series of initiatives designed to better position its HSN and QVC US businesses for long term growth, increase synergies, and accelerate the Company's digital transformation, building on the integration strategy announced following the HSNi acquisition in December 2017.

The initiatives announced today are:

Combining the HSN and QVC US business units into a new business unit that will be referred to as QXH.
This will ensure an aligned approach to the US market and better leverage the combined scale and resources of the two organizations, while still maintaining the unique identity of each brand and the St. Petersburg, FL campus for HSN.
Streamlining operations, principally at HSN, to create a leaner, more agile organization and better leverage the resources of QRG.
Approximately 350 positions will be eliminated by year-end 2018, the majority at HSN's St. Petersburg, FL and Long Island, NY operations, and a smaller number of QRG and QVC positions in West Chester, PA.
Integrating the HSN and QVC US fulfillment networks to enhance delivery speed and lower costs to serve customers.
The first phase includes opening a new fulfillment center in Bethlehem, PA in 2019 as well as anticipated closures of fulfillment centers in Lancaster, PA, Roanoke, VA, and Greeneville, TN in 2020. Approximately 1,725 positions will be eliminated in these centers upon closure, partially offset by the anticipated hiring of 1,200 – 1,500 positions at the new Bethlehem facility.
Additionally, QRG will evolve toward a leased vs. owned model for many of its fulfillment facilities, to increase flexibility and reduce longer term capital requirements.
"As the world's leader in social, digital and video commerce, Qurate Retail Group is committed to extending our leadership in a rapidly changing retail market and attracting the next generation of consumers by bringing compelling product discoveries to market every day, creating seamless customer experiences, and developing highly engaging digital and social shopping platforms," said Mike George, President and Chief Executive Officer, Qurate Retail, Inc., the parent company of QVC and HSN. "The changes announced today will enable us to accelerate this transformation by better leveraging the considerable scale and resources of our HSN and QVC US businesses."

Taken together, HSN and QVC US generated $8.5 billion in revenue in 2017, reached 100 million homes through five broadcast networks, attracted more than 1 billion visits to its websites, and shipped over 170 million items. The initiatives announced today are expected to drive growth by enabling HSN and QVC US to better serve their combined US customer and vendor base.

Expected benefits include:

Enhanced product discovery and optimization of product offerings across broadcast networks and digital and social platforms, supported by expanded live and on-demand content;
Improved delivery times and package consolidation;
Heightened focus, speed, and agility in response to customer needs and market changes; and
Greater cost synergies from the HSNi acquisition, as outlined below, used in part to fund performance marketing and other investments geared toward accelerating growth and driving the digital initiatives.
Team members impacted by these reductions and closures will receive support to aid in their transition, including severance payments, continuation of some benefits, and outplacement assistance.

At its May Investor Day, QRG outlined $200-$220 million of estimated run-rate operating synergies from the HSNi acquisition. The aforementioned initiatives are expected to deliver an additional $120-$125 million of synergies, bringing total estimated run-rate operating synergies to $320-$345 million by 2022.

The details of the expected additional synergy benefits and costs, resulting from both the initiatives announced today and others that are being evaluated by QRG, are as follows:

$120-$125 million annual incremental run-rate synergies in 2022
$40 million expected in 2019
Ramping to $120-$125 million annual synergy benefit in 2022
$20 million annual incremental lease expense in 2022
$10 million in 2019
Ramping to $20 million in 2022
Reflects shift from owned to leased fulfillment centers
Incremental one-time costs:
$40-$45 million severance and restructuring expense in Q3-18 (below adjusted OIBDA)
$30 million startup and dual running costs of new facilities over the course of 2019-2021 (included in adjusted OIBDA)
$200 million one-time net capital investment through 2022 for new fulfillment centers, automation, and technology investments, net of anticipated proceeds from sale of existing facilities
"Today's initiatives are the next step in our ongoing review of how to best continue the integration of HSN and QVC. With a focus on driving digital transformation, these efforts will extend our leadership in social, digital, and video commerce," added George. "I want to thank the many dedicated team members who will be impacted by these changes. Their commitment to HSN, QVC, and our customers, in some cases spanning 25 years or more, has been instrumental to our success. Our excitement today over the positive impact of these changes is tempered by the loss of many valued team members."

Combining the HSN and QVC US business units into a new QXH business unit, while maintaining the unique identity of each brand and the St. Petersburg, FL headquarters for HSN

The HSN and QVC US business units are being combined to form a new business unit that will be referred to as QXH. "The QXH name reflects the continued importance of the QVC and HSN brands, the multiplying power of bringing these brands together to maximize performance in the US market, and the engaging customer experiences we will offer across our five HSN, QVC, and Beauty iQ networks and digital properties," according to George. The QXH leadership team, reporting to Mike George, will include:

Mary Campbell, Chief Merchandising Officer, QRG and Chief Commerce Officer, QVC US, who will be responsible for QXH Merchandising, Marketing, Brand, and Digital strategy and the QVC US Digital, Content, and Broadcast operations. Mary will have primary responsibility for the development and growth of the QVC brand.
Mike Fitzharris, President, HSN, who will be responsible for QXH Video Platform Expansion and Distribution and the HSN Digital, Content, and Broadcast operations. Mike will have primary responsibility for the development and growth of the HSN brand and oversight of the St. Petersburg campus.
These appointments are effective immediately. As part of these changes, the QVC US President role is being eliminated, and Steve Hofmann, who currently holds that position, will be leaving QRG effective Oct. 19, 2018.

"I want to thank Steve for his many contributions to QVC and QRG over the last 11 years. He's led both our QVC International and US businesses and played key roles as we've grown our global organization," said George. "Under Steve's leadership, QVC has expanded its global presence, deepened customer relationships around the world, and developed more streamlined operations across QVC's international markets. Everyone at Qurate Retail Group wishes him well in his future endeavors."

Additionally, the HSN and QVC US buying organizations are being combined and structured around seven strategic category groups: Apparel, Accessories and Jewelry, Beauty, Kitchen Electronics and Cookware, Home Innovations, Home Style, and Consumer Electronics. Category leaders will be responsible for developing and driving strategies to maximize growth in the US market, across both the QVC and HSN platforms.

This integrated buying organization is expected to provide several benefits, including: increased speed to market with the best brands, products, ideas and entrepreneurs; optimized product assortments across QXH's five US networks and multiple web and social platforms to maximize customer choice; a more aggressive pursuit of white space opportunities; and better alignment with our vendor partners.

Mary Campbell said, "This approach will streamline business practices and create more opportunities for brands across QVC and HSN. It will enable us to drive product leadership and brand-building capabilities across a united team, while preserving the unique positioning of QVC and HSN."

Streamlining operations, principally at HSN, to create a leaner, more agile organization and better leverage the resources of QRG

HSN is implementing a number of changes designed to better focus the organization on the most important growth opportunities and create a leaner, more agile business capable of responding more quickly to its customers. These changes better align the organization with the previously announced strategies aimed at restoring HSN to growth by creating fresher and more diverse product assortments, enhancing the on-air experience, driving digital growth, and improving the customer experience. HSN will also undertake a redesign of its campus to create a better working environment and ensure that the facilities enable the team to operate at its best.

The new organization design is expected to enable HSN to better leverage Qurate Retail Group's resources. The design was based, in part, on learnings from how QVC operates its international businesses to best serve the local markets while also leveraging global resources and scale.

Additionally, HSN is closing its Ingenious Designs facility in Long Island, NY, shifting the design and sourcing of those product lines to QRG's in-house design and sourcing team.

"We are beginning to see progress with our initiatives designed to turn around the business, and we are fully committed to the HSN brand and to our St. Petersburg home. The actions we are taking today are difficult, but they are imperative for our long-term success," said Mike Fitzharris, President, HSN. "We thank all of our HSN team members for their hard work and dedication over the years, and for the support of the Tampa Bay community as we continue to evolve our business for the new retail economy."

Qurate Retail Group is also reducing some resources in its corporate support operations due to the deeper integration and streamlining at HSN. Additionally, QVC US is eliminating positions in a few areas in order to redeploy resources into its digital offerings and performance marketing teams while also expanding the number of live and on-demand hours of content produced.

Integrating the HSN and QVC US fulfillment networks to enhance delivery speed and lower cost to serve customers

Qurate Retail Group is launching a multi-year strategy to restructure and integrate the HSN and QVC US fulfillment networks.

Today, QRG operates four HSN and five QVC US fulfillment centers, with many of the fulfillment centers dedicated to specific categories, such as hard goods or apparel. Over the next three to four years, QRG plans to:

Combine HSN and QVC fulfillment centers into integrated fulfillment centers carrying the full product assortments of both brands, in order to combine shipments to the customer and lower operating expenses.
Relocate some fulfillment centers to reduce delivery time to the customer and lower freight expenses.
Upgrade fulfillment technologies, including deploying a proprietary Warehouse Management System (WMS) that is expected to allow QRG to improve speed and efficiency of serving customers across all brands. The new WMS is currently being implemented in QVC's Florence, SC fulfillment center and will be followed by the Rocky Mount, NC facility.
Once completed, the integrated fulfillment network is expected to: increase average delivery speeds to customers by two days; enable more items to be consolidated into single shipments to improve customer convenience; and deliver significant savings in freight and fixed costs.

In the first phase of this program, QRG will invest in a new state-of-the-art fulfillment center in Bethlehem, PA, which is planned to open mid-to-late 2019 and will have a workforce of 1,200-1,500 at full operation. The new facility will handle both QVC and HSN product, and fulfill approximately 25 percent of network volume. The new facility is also expected to feature QRG's proprietary WMS platform. The facility is in addition to the existing zulily fulfillment center also located in Bethlehem, PA and will not affect operations at that site.

With the new facility in Bethlehem, QRG will ultimately close its QVC fulfillment center in Lancaster, PA and, as previously announced, its HSN fulfillment center in Roanoke, VA, and its temporary fulfillment center operation in Greeneville, TN. All will continue to operate as they do today until the Bethlehem facility is fully operational in 2020. Approximately 1,725 team members in those sites will be affected by this transition.

"This difficult decision was made after much discussion and thoughtful analysis and is expected to provide us with the capability to fulfill packages across brands and consolidate shipments for a better, faster and more environmentally friendly customer experience with lower shipping costs," said Bob Spieth, Chief Operations Officer, QRG. "Our operations in Lancaster, Roanoke and Greeneville have served us well over the years, and will continue to do so over the near-term. We thank our teams there for their dedication and support as we move forward."

Forward-Looking Statements

This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about initiatives regarding Qurate Retail Group and the HSN and QVC US businesses (the "initiatives"), the timing of the implementation of the initiatives, expected changes in employee headcount as a result of the initiatives, and expected benefits resulting from the initiatives, including the amount and timing of expected synergy benefits and costs resulting from the initiatives. These forward-looking statements involve many risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements, including, without limitation, general market conditions. These forward-looking statements speak only as of the date of this press release, and each of Qurate Retail, Inc. ("QRI") and QVC, Inc. ("QVC") expressly disclaim any obligations or undertakings to disseminate any updates or revisions to any forward-looking statement contained herein to reflect any change in QRI's or QVC's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. Please refer to the publicly filed documents of QRI and QVC, including each of their most recent Forms 10-K and 10-Q for additional information about QRI and QVC, respectively, and about the risks and uncertainties related to each of QRI's and QVC's business which may affect the statements made in this press release.

About Qurate Retail Group

Qurate Retail Group comprises seven leading retail brands — QVC, HSN, zulily, Ballard Designs, Frontgate, Garnet Hill and Grandin Road — all dedicated to providing a 'third way to shop,' beyond transactional ecommerce or traditional brick-and-mortar stores. Globally, Qurate Retail Group is #1 in video commerce, reaching approximately 370 million homes worldwide via 16 television networks and multiple ecommerce sites, social pages, mobile apps, print catalogs and in-store destinations. Qurate Retail Group is #3 in ecommerce in North America and #3 in mobile commerce in the US (according to Internet Retailer). Qurate Retail Group combines the best of retail, media and social to curate products, experiences, conversations and communities for millions of highly discerning shoppers – bringing joy, inspiration and humanity to shopping. Qurate Retail Group also curates large audiences, across multiple platforms, for thousands of brand vendors. Headquartered in West Chester, PA, Qurate Retail Group has 27,000 team members in the US, the UK, Germany, Japan, Italy, France, Poland and China. For more information, visit

Qurate Retail, Inc. (NASDAQ: QRTEA, QRTEB) includes the Qurate Retail Group portfolio of brands as well as other minority investments.

SOURCE Qurate Retail Group

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Trump praises Upper Merion grad, Montana congressman for bodyslamming a reporter last year

Tom Paine

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President Trump praised a former Upper Merion High football player who is now Montana's congressman for bodyslamming a reporter just prior to his 2017 election.

Speaking to a crowd in Montana last night, Trump talked about how Republican Greg Gianforte physically attacked a reporter for Britain's Guardian who was pressuring him for an interview.

"Any guy that can do a body slam ... he's my guy," said Trump.

After graduating from Upper Merion, Gianforte attended Stevens Institute of Technology in New Jersey, sold one software company, and eventually ended up in Montana, where he founded another software company that was sold to Oracle for $1.5 billion in 2011.

He ran for governor of Montana and lost in 2016 before winning the state's at-large house seat in a special election the following year.

Gianforte pleaded guilty to a misdemeanior assault charge soon after the attack.

Yes, Virginia, First Round Capital will continue raising funds to invest (Opinion)
Files for 7th fund

Tom Paine

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Josh Kopelman / First Round Website

Not that there was a question about it, but a filing hit the SEC this morning indicating First Round Capital's intent to raise a 7th fund . First Round Capital VII, L.P. plans to raise up to $209,392,283 (precisely?). A smaller fund would seek to raise about $11 million.

First Round's past two principle funds raised $175 million each.

And so far, there hasn't been too much to worry about for the VC firm, at least from a macro point of view. Despite hitting dry holes in some sectors, such as apparel and retail (though an eventual Warby Parker IPO could more than make up for that), most of its individual investments there have been small. Uber, which I believe it has mostly exited now, Ring, Flatiron Health and others assure that First Round has an IRR that is the envy of most VCs. And you'd be surprised at how many less publicized investments have turned out well.

But what about the future?

I've often wondered whether Josh Kopelman, whom I don't know personally but certainly recognize has a varied set of interests, would go in a completely different career direction, whether it be political, philanthropic, or to some other transformative business concept he decides to pursue. Which wouldn't necessarily mean walking away from VC, but perhaps dedicating less time to it.

Howard Morgan, who retired, is considered by some to have been the primary designer of First Round's investment logic, and its use of portfolio theory to minimize risk from any one investment or sector. Not that the other seed/early stage funds don't do it, but First Round often seems to do it better. With Chris Fralic's departure, it leaves Rob Hayes as First Round's other most proven dealmaker (and Bill Trenchard has strong experience). Nothing wrong with what's left; just saying its a less proven group.

But First Round's strength, as always, is getting on the scene early and quickly writing a check when it sees a concept or team it believes in.

Enterprise Bits / Small morsels of enterprise software news which, if taken together, may amount to something

Tom Paine

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"While SAP has spent more money with Microsoft and Google over the past 12 months, “our SAP internal share of wallet stays pretty stable at 70 percent” according to the text of the AWS memo."

"For the better part of the past year, Dell and Silver Lake worked to destroy the value of the Tracker by (1) raising the possibility of a Dell IPO, (2) floating the idea of a merger with VMware and (3) threatening a forced conversion of the Tracker into Dell common stock, among other tactics. These scare tactics are reminiscent of the tactics Machiavelli advised the Borgia rulers to use centuries ago."

Carl C. Icahn: Open Letter To Stockholders of Dell’s DVMT Tracking Stock

iCIMS is based at North Jersey's BellWorks, has received its primary funding from Susquehanna Growth Equity, and appears IPO ready based on most metrics. It has flown somewhat under the radar in my opinion, except for HR people.

A Bay Area company, Anaplan, went public in the past week, part of a new generation of corporate planning tools, with some SAP and local connections.

Most people don't know, however, that Anaplan came to life in this idyllic spot in the UK.

Defense communications contractors L3 Technologies, Harris Corp agree to merge; L3 has large Camden presence

Tom Paine

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Update: Harris, L3 agree to merge

Harris Corp. and New York-based L3 Technologies are near a merger that would combine the two defense contractors into a company with a market value of $33.5 billion, the Wall Street Journal reported today.

The deal could be completed this weekend.

L3 has a major presence in the Philadelphia ares, with operations in Bristol, Philadelphia, and Camden. L3 has some 450 employees at its
Communications-East unit based in Camden, its LinkedIn page suggests .

"L3 Communication Systems-East (L3 CS-East) is a world-class leader in the design, development and production of C4ISR and Cyber solutions, supporting mission-critical space, land, air and naval operations. L3 CS-East has expertise in high-speed network encryption, electronic key management and integration, and automation of C4ISR systems", a description on the LinkedIn page says.

Harris is based in Melbourne, Florida.


Governor Murphy holds a roundtable discussion at Newark Venture Partners

Esther Surden
Publisher & Editor,

After the governor’s economic speech last week announcing the creation of the Innovation Evergreen Fund, members of New Jersey’s tech community weighed in on the proposal.

The governor presented a general framework of his plan during a recent roundtable event at the offices of Newark Venture Partners, noting that “we have to work with the legislature to get this done.”

The New Jersey Economic Development Authority (EDA), he said, would auction off tax credits to “probably” big companies, mostly companies based in New Jersey. Of course, the credits will only be attractive to companies that have a tax liability in New Jersey.

Calculating the rough numbers, Murphy stated, “we are expecting to get 90 cents on the dollar, or more … so auctioning off $60 million dollars of tax credits a year, with an objective to get $50 million.” This is a five-year program, so the expectation would be $250 million over the five years. The big companies, he noted, will be selected based on the prices they are willing to pay for the tax credits. “We want every penny we can get,” he said.

There is also a second criterion, he noted. This important aspect is “the extent to which they [companies receiving the tax credit] present a plan that they will mentor or help develop a network for the startup culture in the state.” This is both a hard-science and soft-science approach, Murphy said.

“We take the proceeds and put them alongside private venture money,” a lot of which will come from New Jersey, but “maybe folks who come from out of state, as well.” That $50 million a year, and an equal amount of private venture money, will be put to work on startup companies in New Jersey. “That’s the one prerequisite. It has to be a New Jersey-based entity.” The decisions on investment will be made by the venture firms, “as they should be,” Murphy noted. “And I think we will target the same sectors that we’ve targeted in our master plan.”

Some reactions from members of the New Jersey tech community:

David J. Sorin, Office Managing Partner and Cochair of the Venture Capital & Emerging Growth Companies Practice, McCarter & English

“The important part of the program to me is that this isn’t just about access to money and mentorship. Also, the larger companies will be able to provide insights to the innovators as to what the market needs. One of the biggest problems that innovators and startup companies have is that they produce what they think the market needs, as opposed to what the market thinks the market needs. And, ultimately, the market speaks. This is interesting because the companies in the startup stage that will end up with access to funding will get so much more market intelligence than they could ever get on their own. They just can’t afford it, or they don’t have access. You can’t talk to enough people to figure it out. I think that is one of the elegant aspects of this plan.”

Dan Borok, Managing Partner, Newark Venture Partners

“Attracting more startups to New Jersey would be transformative for the state. Not only do startups grow jobs and attract young millennial talent, they have a ripple effect for taxable income and revenue. We are seeing their effects first hand in Newark, where our tech ecosystem is expanding by the day, our companies are growing, and our founders are building a thriving community.

“The State of New Jersey also has much to offer founders, as they set out to build on their innovations. We have an incredibly engaged corporate community ‒ including Audible, Prudential Financial, Panasonic, the NJ Economic Development Authority and so many more ‒ that are invested in seeing our state succeed and supporting technologies that change the way they do business. In addition, we are a short train ride from the corporate resources of New York, with a more manageable cost of living and doing business.

“We applaud Governor Murphy on his announcement today. New Jersey needs to tap into more innovative solutions if we want more innovators to call New Jersey home.”

James Barrood, President and CEO, New Jersey Tech Council

”The Tech Council, and the technology and innovation community we represent statewide, is excited about the strategic plan and venture initiative released by Governor Murphy today to scale funding to new ventures and growth companies. This aligns perfectly with our own unique efforts to launch Tech Council Ventures, a venture firm now raising its second fund, and JumpStart, an angel network, to ensure more funding for our brilliant entrepreneurs and innovative startups. It is novel and visionary government-led initiatives like the one launched today that will transform the economy and sustain our state’s innovation ecosystem.”

Jay Bhatti, Cofounder and CTO, BrandProject

“The venture initiative by Gov. Murphy and the EDA is forward thinking, and will result in real impactful innovation for the state. I personally can see how many top venture firms will now look to NJ as a destination for strong startups to be based. I would not be surprised if VCs ask their companies to be in NJ vs NYC to take full advantage of the scaling benefits of this program.”

Anne-Marie Maman, President, New Jersey Business Incubation Network

“The New Jersey Business Innovation Network and its members are very encouraged by the many different initiatives that Governor Murphy has been announcing. We look forward to implementing the programs, and to the impact that they will have on the startup companies in our varied coworking spaces.”

Donald H. Sebastian, President and CEO, New Jersey Innovation Institute

“As NJII looks to assist the State in growing technology hubs, the governor’s new venture match fund is an imaginative and vital program. It is fuel to drive the three-sided relationship among entrepreneurial small firms, large established firms and the venture community that is fundamental to an innovation ecosystem. Small companies have access to capital necessary to sustain them through the scale-up of high-risk technology before it is mature enough to attract the interest of established firms that control the market. Big companies have skin in the game by virtue of their purchase of tax credits, and VCs leverage the state investment ‒ it is a win for everyone.”

Chris Sugden, Managing Partner, Edison Partners

“This new venture program is a much-needed innovation and addition to the entrepreneurial ecosystem in New Jersey. Our firm has called New Jersey home for over 30 years, and we have closed more than 210 technology-based investments, our state is home to more of these companies than any other. In addition, New Jersey has delivered three of our top five exits ever. However, New Jersey remains underserved from an early-stage capital perspective. This program will provide capital to a part of the technology landscape where we see the most need and a large opportunity for growth.”

Andrew Zwicker, New Jersey Assemblyman

“The program introduced by the governor today is an innovative approach to kickstarting New Jersey’s innovation economy. Auctioning tax credits to large companies, and using those proceeds to provide matching funds that directly invest in emerging companies, creates an ecosystem that is a win-win all around. The end result will be a vibrant culture of investment in the companies of the future that will create high-quality, high-paying jobs; grow our economy; and position New Jersey as a national leader.”

Esther Surden is Publisher and Editor of NJTechWeekly, and a contributor to Philly Tech News. This article originally appeared in NJTechWeekly, and is republished here with her permission.

Edison Partners raises 9th fund, its largest at $365 million

Tom Paine

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Princeton-based Growth investment firm Edison Partners has raised $365 million in its ninth fund – the largest in the firm’s 32-year history, CrunchBase reports .

Edison VIII, closed after raising $275 million in 2016, was previously Edison's largest fund.

LPs include a “diverse mix” of investment vehicles, including New Mexico Educational Retirement Board, Rutgers University, Hirtle Callaghan, American Family Insurance, and Renaissance Venture Capital Fund, according to Chris Sugden, Managing Partner.

Part of Edison's strategy is to continue to limit the size of its funds, to avoid the 'too much money facing too few deals' syndrome if things get rocky.

Edison has 12 partners now. Currently, Edison Partners manages more than $1.4 billion in assets throughout the eastern United States. Though still a regional firm, I see some indication that its establishing a broader footprint.

Edison Ventures will remain focused on three segments: Enterprise Solutions, Financial Technology, and Healthcare IT.

Philly's getting a new, high tech company; Livent falls 3.6 percent in market debut

Tom Paine

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Opening Bell, October 11, 2018 from CNBC.

Update 10/12: Reuters: "Lithium producer Livent Corp (LTHM.N) fell 3.6 percent in its market debut on Thursday after being priced at the lower end of its expected range, as investors worried about the recent declines in prices of lithium in China".

The general view seems to be  that the lithium market will continue to experience price weakness in the near term before tightening a  few years out.

"We think demand is going to grow almost five times larger in 2025 than it was in 2017,” Livent chief executive officer Paul Graves said in an interview Thursday in New York at the IPO event. .

Livent's welcome on Wall Street may have also been depressed by the market rout on Wednesday.


Livent, a lithium compound producer that's being spun off from FMC Corp., set terms for its IPO on Monday. It plans to raise $380 million by offering 20 million shares at a range of $18 to $20. Priced at the midpoint, Livent would have a market cap of $2.7 billion.

Livent will remain based in Philadelphia. It will trade on the NYSE under the ticker symbol "LTHM".

Livent is targeting production of lithium hydroxide, the type of lithium used in Tesla batteries. Buying into its offering is considered a big bet on the future of electric cars. Demand for lithium is expected to remain strong throughout the next decade, although there has been some recent price weakness.

A competitor and the world's largest lithium producer, Albemarle Corp (ALB.N), has been reported by Reuters as having an interest in acquiring Livent if its post-IPO stock performance isn't strong .