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Self-driving Car Wars Heat Up In Waymo, Uber Lawsuit

February 27, 2017 by  
Filed under Around The Net

Alphabet Inc’s  Waymo self-driving car unit filed a lawsuit against Uber Technologies and its autonomous trucking subsidiary Otto last Thursday over allegations of theft of its confidential and proprietary sensor technology.

Waymo accused Uber and Otto, acquired by the ride services company in August, with stealing confidential information on Waymo’s Lidar sensor technology to help speed its own efforts in autonomous technology.

“Uber’s LiDAR technology is actually Waymo’s LiDAR technology,” said Waymo’s complaint in the Northern District of California.

Uber said it took “the allegations made against Otto and Uber employees seriously and we will review this matter carefully.”

Lidar, which uses light pulses reflected off objects to gauge their position on or near the road, is a crucial component of autonomous driving systems. Previous systems have been prohibitively expensive and Waymo sought to design one over 90 percent cheaper, making its Lidar technology among the company’s “most valuable assets,” Waymo said.

Waymo is seeking an unspecified amount of damages and a court order preventing Uber from using its proprietary information.

Otto launched with much fanfare in May, due in part to the high profile of one of its co-founders, Anthony Levandowski, who had been an executive on Google’s self-driving project. Uber acquired the company in August for what Waymo said in the lawsuit was $680 million.

Waymo said that before Levandowski’s resignation in January 2016 from Google, whose self-driving unit was renamed Waymo in December, he downloaded over 14,000 confidential files, including Lidar circuit board designs, thereby allowing Uber and Otto to fast-track its self-driving technology.

Waymo accused Levandowski of attempting to “erase any forensic fingerprints” via a reformat of his laptop.

“While Waymo developed its custom LiDAR systems with sustained effort over many years, defendants leveraged stolen information to shortcut the process and purportedly build a comparable LiDAR system in only nine months,” the complaint said.

Last month, Tesla Inc electric car company sued the former head of its Autopilot system. It said he tried to recruit Tesla engineers for his new venture with the former head of Google’s self-driving program while still working there, and said he stole proprietary data belonging to Tesla.

Waymo’s lawsuit said it learned of this use of trade secrets and patent infringement after it was inadvertently copied on an email from a component vendor that included a design of Uber’s Lidar circuit board, which bore a “striking resemblance” to Waymo’s design.

Waymo noted that Google devoted over seven years to self-driving cars and said Uber’s forays into the technology through a partnership with Carnegie Mellon University had stalled by early 2016.

Are Amazon Tablets Taking Over?

February 27, 2017 by  
Filed under Consumer Electronics

While research groups like IDC and Gartner have shown an overall 15.6 decrease in worldwide tablet shipments in 2016, the market has not gone entirely belly-up, as Amazon continues to pull ahead with a phenomenal 99.4 percent increase in annual tablet growth during the same period.

According to a report by the folks at TrendForce, Amazon managed to ship 11 million Fire-series tablets over the course of 2016 even as global tablet shipments fell by 6.6 percent from the previous year. While the sales numbers were impressive, the company still fell behind Apple at 27 percent of the market and Samsung at 17.2 percent, yet managed to beat expectations as a result of strong year-end holiday sales.

Apple also pulled ahead with strong tablet sales last year and retained its top spot, selling 42 million devices to Samsung’s 27 million. A few weeks ago, we wrote that IDC may have regretted telling the media to rely on expectations that the fruit-themed device company would allegedly oversee the decline of traditional PC sales by 2015. While traditional PC sales dropped 5.7 percent to 260.2 million in 2016, they still remain an impressive part of the overall device market and have not fallen as quickly as tablets have over the past year.

TrendForce expects tablet sales to continue declining from 157.4 million units in 2016 to around 147.8 million units 2017. While Amazon nearly doubled its annual shipments and Apple enjoyed strong iPad sales over the holiday season, other brands such as Microsoft are expected to fall into 7th place as the company experiences panel shortages for its Surface Pro series.

For a limited time, Amazon will occasionally offer its 7-inch 8GB Fire Essentials bundle and its 16GB Fire Essentials Bundle at discounted prices. For instance, the former had been available for $33.33 in November and $49.99 until earlier this month, along with free Prime shipping. The company is expected to offer similar deals throughout the year in an effort to strengthen its sales base from loyal Prime customers.

Courtesy-Fud

Google’s Jigsaw Rolls Out Initiative To Combat Online Abuse

February 24, 2017 by  
Filed under Around The Net

Alphabet Inc’s Google and subsidiary Jigsaw rolled out a new technology to aid news organizations and online platforms  in identifying abusive comments on their websites.

The technology, called Perspective, will review comments and score them based on how similar they are to comments people said were “toxic” or likely to make them leave a conversation.

It has been tested on the New York Times and the companies hope to extend it to other news organizations such as The Guardian and The Economist as well as websites.

“News organizations want to encourage engagement and discussion around their content, but find that sorting through millions of comments to find those that are trolling or abusive takes a lot of money, labor, and time. As a result, many sites have shut down comments altogether,” Jared Cohen, President of Jigsaw, which is part of Alphabet, wrote in a blog post.

“But they tell us that isn’t the solution they want. We think technology can help.”

Perspective examined hundreds of thousands of comments that had been labeled as offensive by human reviewers to learn how to spot potentially abusive language.

CJ Adams, Jigsaw Product Manager, said the company was open to rolling out the technology to all platforms, including larger ones such as Facebook and Twitter  where trolling can be a major headache.

The technology could in the future be expanded to trying to identify personal attacks or off-topic comments too, Cohen said.

Perspective will not decide what to do with comments it finds are potentially abusive; rather publishers will be able to flag them to their moderators or develop tools to help comment understand the impact of what they are writing.

Cohen said a significant portion of abusive comments came from people who were “just having a bad day”.

The initiative against trolls follows efforts by Google and Facebook to combat fake news stories in France, Germany and the United States after they came under fire during the U.S. presidential vote when it became clear they had inadvertently fanned false news reports.

The debate surrounding fake news has led to calls from politicians for social networks to be held more liable for the content posted on their platforms.

The Perspective technology is still in its early stages and “far from perfect”, Cohen said, adding he hoped it could be rolled out for languages other than English too.

Linux To Support Virtual GPUs

February 24, 2017 by  
Filed under Computing

pen source’s Mr Sweary Linus Torvalds announced the general availability of the Linux 4.10 kernel series, which includes virtual GPU (Graphics Processing Unit) support.

Linus wrote in the announcement, adding “On the whole, 4.10 didn’t end up as small as it initially looked”.

The kernel has a lot of improvements, security features, and support for the newest hardware components which makes it more than just a normal update.

Most importantly there is support for virtual GPU (Graphics Processing Unit) support, new “perf c2c” tool that can be used for analysis of cacheline contention on NUMA systems, support for the L2/L3 caches of Intel processors (Intel Cache Allocation Technology), eBPF hooks for cgroups, hybrid block polling, and better writeback management.

A new “perf sched timehist” feature has been added in Linux kernel 4.10 to provide detailed history of task scheduling, and there’s experimental writeback cache and FAILFAST support for MD RAID5.

It looks like Ubuntu 17.04 will be the first stable OS to ship with Linux 4.10.

Courtesy-Fud

Is Blackberry Taking Nokia To Court?

February 22, 2017 by  
Filed under Around The Net

A patent war is being fought between two of the industry smartphone leaders of yesteryear – Nokia and Blackberry.

Blackberry filed a patent-infringement lawsuit against Nokia Oyj, demanding royalties on the Finnish company’s mobile network products that use an industry wide technology standard.

Blackberry moaned that Nokia’s Flexi Multiradio base stations, radio network controllers and Liquid Radio software are using technology covered by as many as 11 patents owned by BlackBerry.

It added that Nokia was encouraging the use” of the standard- compliant products without a license from Blackberry.

Blackberry did not say how much it wanted Nokia to cough up, but it would appear to be part of Chief Executive Officer John Chen is working to find new ways to pull revenue out of Blackberry’s technology.

He’s used acquisitions to add a suite of software products and negotiated licensing agreements to take advantage of the company’s thick book of wireless technology patents.

Nokia is aware of the inventions because the company has cited some of the patents in some of its own patent applications, BlackBerry said.

Some of the patents were owned by Nortel and Nokia had at one point tried to buy them as part of a failed bid for Nortel’s business in 2009, according to Blackberry.

BlackBerry was part of a group called Rockstar Consortium that bought Nortel’s patents out of bankruptcy for $4.5 billion in 2011. The patents were split up between the members of the group, which included Apple and Microsoft.

Since Blackberry contends that patents cover essential elements of a mobile telecommunications standard known as 3GPP, it has pledged to license them on fair and reasonable terms.

Courtesy-Fud

GM To Partner With Lyft, Will Deploy Thousands Of Self-driving Bolt Cars

February 21, 2017 by  
Filed under Around The Net

General Motors Co plans to add thousands of self-driving electric cars in a series of test fleets in partnership with ride-sharing affiliate Lyft Inc, beginning in 2018, two sources familiar with the automaker’s plans said this week.

It is expected to be the largest such test of fully autonomous vehicles by any major automaker before 2020, when several companies have said they plan to begin building and deploying such vehicles in higher volumes. Alphabet Inc’s Waymo subsidiary, in comparison, is currently testing about 60 self-driving prototypes in four states.

Most of the specially equipped versions of the Chevrolet Bolt electric vehicle will be used by San Francisco-based Lyft, which will test them in its ride-sharing fleet in several states, one of the sources said. GM has no immediate plans to sell the Bolt AV to individual customers, according to the source.

The sources spoke only on condition of anonymity because GM has not announced its plans yet.

GM executives have said in interviews and investor presentations during the past year they intend to mass-produce autonomous vehicles and deploy them in ride services fleets. However, GM officials have not revealed details of the scale of production, or the timing of the deployment of those vehicles.

In a statement on Friday, GM said: “We do not provide specific details on potential future products or technology rollout plans. We have said that our AV technology will appear in an on-demand ride sharing network application sooner than you might think.”

Lyft declined to comment.

Android Apps Poses Security Risk For Cars

February 20, 2017 by  
Filed under Around The Net

Android applications that allow millions of drivers to remotely locate and unlock their vehicles are missing security features that could prevent tampering by hackers.

Researchers from antivirus vendor Kaspersky Lab took seven of the most popular Android apps that accompany connected cars from various manufacturers, and analyzed them from the perspective of a compromised Android device. The apps and manufacturers have not been named.

The researchers looked at whether such apps use any of the available countermeasures that would make it hard for attackers to hijack them when the devices they’re installed on are infected with malware. Other types of applications, such as banking apps, have such protections.

The analysis revealed that none of the tested applications used code obfuscation to make it harder for attackers to reverse-engineer them, and none of them used code integrity checks to prevent malicious manipulation.

Two applications didn’t encrypt the login credentials stored locally and four encrypted only the password. None of the apps checked if the devices they’re running on are rooted, which could indicate that they’re insecure and possibly compromised.

Finally, none of the tested applications used overlay protections to prevent other apps from drawing over their screens. There are malware apps that display fake log-in screens on top of other apps to trick users to expose their log-in credentials.

While compromising connected-car apps might not directly enable theft, it could make it easier for would-be thieves. Most such apps, or the credentials they store, can be used to remotely unlock the vehicle and disable its alarm system.

Also, the risks are not “limited to mere car theft,” the Kaspersky researchers said in a blog post. “Accessing the car and deliberate tampering with its elements may lead to road accidents, injuries, or death.”

While manufacturers are rushing to add smart features to cars that are meant to improve the experience for car owners, they tend to focus more on securing the back-end infrastructure and the communications channels. However, the Kaspersky researchers warn, that client-side code, such as the accompanying mobile apps, should not be ignored as it’s the easiest target for attackers and most likely the most vulnerable spot.

“Being an expensive thing, a car requires an approach to security that is no less meticulous than that of a bank account,” the researchers said.

Oracle Still Going After Google Over Java

February 17, 2017 by  
Filed under Computing

Oracle has decided that it is not going to give up trying to convince the world that Google owes it billions for Android software.

For the last seven years, Google and Oracle have been slugging it out over copyright over Java applets, which Oracle insists are the key to making Android run. It has gone through two federal trials and bounced around at appeals courts, including a brief stop at the US Supreme Court. Oracle has sought as much as $9 billion in the case.

Other than one loss, which was successfully appealed, Google has won. Now Oracle briefs have decided it is time for another round and filed an appeal with the US Court of Appeals for the Federal Circuit that seeks to overturn a federal jury’s decision last year.

In the trial last year in San Francisco, the jury ruled Google’s use of 11,000 lines of Java code was allowed under “fair use” provisions in federal copyright law.

In Oracle’s 155-page appeal on Friday, it called Google’s “copying…classic unfair use” and said “Google reaped billions of dollars while leaving Oracle’s Java business in tatters”.

Oracle’s brief also argues that “When a plagiarist takes the most recognizable portions of a novel and adapts them into a film, the plagiarist commits the ‘classic’ unfair use”.

So all Oracle has to do is prove that Applets are the most recognisable part of Java which has been converted into a new product.

Courtesy-Fud

Apple Finally Overtakes Samsung In Smartphones Sales

February 16, 2017 by  
Filed under Mobile

Apple has outpaced Samsung Electronics in smartphone sales for the first time in two years, but that victory might just be short-lived.

Samsung sold 76.8 million smartphones in the fourth quarter, giving it a market share of 17.8 percent, but it was just beaten by Apple, which sold 77 million iPhones for a 17.9 percent share, according to figures from market research firm Gartner.

The fourth quarter is usually a strong one for Apple, boosted by holiday sales of the new generation of iPhones it releases each September, said Anshul Gupta, a research director at Gartner.

For Samsung, though, 2016 ended particularly badly, dominated by the fiasco around the recall of its incendiary Galaxy Note7.

Super-phones like the Note7 could have accounted for 10 to 15 percent of Samsung’s smartphone sales in the period before its recall, said Gupta, but Samsung lost more than that: There was also the damage to its brand.

It could bounce back sooner rather than later, though, as it has a new flagship phone coming out at the end of March.

Apple, meanwhile, is expected to wait until September before unveiling new iPhones. This year will mark the iPhone’s 10th anniversary, and the next model is widely expected to be something special, so Apple fans may delay replacing phones until then, said Gupta. That would leave the way clear for Samsung to move back into the lead from this quarter.

That pattern showed up last year too: Although it dominated the fourth quarter, Apple was a distant second over the full year, with market share of just 14.4 percent over the year, far behind Samsung’s 20.5 percent, and the situation was similar the previous year.

 

 

Apple Joins Wireless Power Consortium

February 15, 2017 by  
Filed under Mobile

Apple has joined the consortium responsible for the Qi wireless charging system, heating up rumors that owners of future  iPhones could live tangle-free.

Last week, a financial analyst claimed Apple will release three new iPhones with wireless charging capabilities this year, reviving an on-again, off-again rumor about the next-generation iPhone’s capabilities.

The appearance of Apple’s name on the membership list of the Wireless Power Consortium, Qi’s creator, over the last week adds credence to that rumor. Its name was not on the list cached by Google’s search engine last Tuesday.

“After several years of increasing rumor, Apple’s membership with the Wireless Power Consortium points strongly to the expectation that the next iPhone will include wireless charging technology,” said Vicky Yussuff, an analyst at market watcher IHS Technology.

Don’t expect too much, though: That’s pretty much what IHS analysts said about the last iPhone, too.

In fact, Apple’s membership of the WPC may have nothing to do with phones. The magnetic charging adapter supplied with the Apple Watch will charge Qi devices (although the Watch itself is programmed not to work with just any Qi charger, only those supplied or approved by Apple) so membership may just be a delayed recognition of that usage.

Nine in 10 consumers want wireless charging on their next phone, according to Yussuff. The technology is now so widely adopted that it’s no longer something Apple can ignore, she added.

IHS expects around 350 million wireless-chargeable devices to ship this year, in a market largely driven by Samsung Electronics, which has included the capability in its top-of-the-range phones since the launch of the Galaxy S6 in 2015. Samsung also sells wireless charging covers for the older S4 and S5.

 

Is Wireless Charging Finally Making It To The Next iPhone?

February 13, 2017 by  
Filed under Mobile

Apple’s next three models of the iPhone — the iPhone 8 and two updated versions of  iPhone 7 — will finally contain a long-awaited feature: wireless charging, according to an industry analyst with a track record of being right about the company’s plans.

The new iPhone models, which are expected to come in 4.7-in, 5.5-in and 5.8-in form factors when released later this year, will also sport a new 3D Touch feature and an OLED display, according to Ming-Chi Kuo, a financial analyst for KGI Securities.

3D Touch allows users to press harder on the screen to launch actions, such as replying to messages or animating live photos, instead of only selecting applications.

Kuo also expects the iPhone 8 — if that’s what Apple decides to call the new model (see artist rendering above) — to come in an all-glass case, with a flexible, “thinner form factor.”

Kuo, who reports on the Asia-Pacific region, is not just any analyst. The Apple-focused news website and community Cult of Mac, once called him “the most reliable voice on all things Apple…because his ability to accurately prophesy Apple’s future product plans is unparalleled.”

First reported by MacRumors, Kuo’s research note indicated that wireless charging increases the internal temperature of smartphones, which will require the iPhone 8  with an OLED display and glass casing to have a new 3D Touch module with “additional graphite sheet lamination” to keep it from overheating.

“While we don’t expect general users to notice any difference, lamination of an additional graphite sheet is needed for better thermal control and, thus, steady operation; this is because FPCB is replaced with film, which is more sensitive to temperature change of the 3D touch sensor in OLED iPhone,” Kuo wrote in his research note.

Previous MacRumors reports indicate the iPhone 8’s additional features could bump the cost of making the smartphone from 30% to 50% higher — pushing its sale to more than $1,000.

This is not the first time industry analysts have speculated that Apple is about to embrace wireless charging for the iPhone. Last year, market research firm IHS predicted that Apple would introduce some form of wireless charging on the iPhone 7.

 

BlackBerry Announces New Line Of Business

February 9, 2017 by  
Filed under Mobile

BlackBerry unveiled a new line of business to provide developers with a secure, cloud-based, mobile communications platform for texting, voice, video and file sharing.

Developers can insert these capabilities into their existing custom apps and services using the new BBM Enterprise SDK (software developer kit), BlackBerry said. The SDK will be sold as a per-user license on a subscription basis to developers, including those employed at enterprises, and to independent software vendors (ISVs).

BlackBerry didn’t say what the licenses would cost, but did say the cost would be affordable, especially compared to communications products from competitors that usually charge on a usage basis for texts, voice and video calls. The SDK will be available worlwide later in February for apps running on iOS and Android.

All communications in the new platform will be highly secure and encrypted with keys kept under the management of the application developers, not BlackBerry, said Frank Cotter, vice president of enterprise products, in a conference call.

These communications will be transmitted via the Internet Protocol and not the SMS channel typically used by competitors. The communications also will be compliant with the Federal Information Processing Standard 140-2 that the U.S. government uses for approving cryptographic modules in devices, Cotter said.

Using the new BlackBerry platform will allow physicians who text patient information to stay within the requirements of HIPAA (Health Insurance Portability and Accountability Act), Cotter said. “Other vendors sidestep HIPAA and say they are just a pipe and that HIPAA doesn’t apply,” he said.

In one example, Cotter said an emergency room physician could use the communications platform to reach out to another doctor via a text, then quickly escalate that text to a voice or video call and transmit a picture of a patient’s injuries while continuing the call. “We bolt [our software] into existing workflows and apps,” he said.

In another example, Cotter said a dashboard tablet used by a police officer during a high-speed chase could quickly be turned to a secure channel with a dispatcher showing video from the scene and the police cruiser’s location.

BlackBerry already works with developers in a partnership program that has created more than 4,000 third-party enterprise apps, said Marty Beard, chief operating officer of BlackBerry. The new SDK promises to build on those apps, he said.

Is Acer Jumping Into Artificial Intelligence?

February 9, 2017 by  
Filed under Computing

Acer is expected to break into new territory in the fields of artificial intelligence, deep learning in 2017 and has begun talking with several potential clients about shipping its first in-house robotics devices, according to company CEO Jason Chen.

Focus on AI and deep learning in the transportation sector

The Taiwan-based multinational computer company began its foray into AI and deep learning two years ago in 2015 and mostly focused its efforts on the transportation sector and related commercial uses. In 2016, the company managed to win a top award for forecasting traffic through a mountain tunnel in northern Taiwan, and now it plans to introduce some of the first fruits of its partnerships within the Taiwan transportation market in the first half of 2017.

Back in October, Acer shipped its first in-house robotics product called Jibo at a base price of $749. The project, originally led by the Massachusetts Institute of Technology (MIT) Media Lab, began as an effort to build a family robot with digital assistant features, allowing users to make phone calls, shop online, stream music and video using voice commands and manage connected household appliances.

Although the consumer robotics market is expected to remain relatively flat in 2017, the company is reportedly in talks with potential clients to land more orders of its in-house robots, though it has not specified whether it will begin developing separate models for business commercial-oriented purposes.

Digital signage shipments began in January

Acer is apparently making ground in the field of digital signage products, and landed orders for more than 1,000 digital signage devices from a European supermarket chain in late 2016. The company began its first shipments in January and is likely to expand negotiations with other clients in the next few months.

One of the first partners for Windows Holographic Platform

Last month during CES, the company unveiled a prototype headset for the Windows Holographic platform that will be compatible with the Windows 10 Creators Update later this April. Microsoft’s first three partners include Acer, HP and Dell and each include specialized cameras that can integrate VR alongside the Windows Holographic Mixed Reality platform. Each vendor has noted that users will not need a high-end PC to run these headsets, and pricing is expected to begin around $299. The Acer headset is expected to hit store shelves sometime in mid-2017.

Back in August, the company also began shipments of its first VR device for cinemas. Dubbed the StarVR, this panoramic virtual reality headset features two 5.5-inch displays each with 2560x1440p resolution, delivering the combined output of a 5K VR experience. With a 210-degree field of view, the displays deliver a more expansive panoramic environment using custom Fresnel-based optic technology. The 0.84-pound (380g) headset also features six degrees of freedom, 360-degree submillimeter optical tracking and a low-latency feedback mechanism that combines an IMU with an optical sensor.

The shipments were headed to IMAX Corporation, which started operating its first VR Experience Center in Los Angeles and is working on opening a second center in Manchester UK, says Chen.

Acer’s PC division will focus heavily on notebooks

Acer’s top executive also noted that its PC business in 2017 will focus primarily on its notebook products rather than its Aspire towers, all-in-one desktops and media center boxes. There is more market share and profitability to be gained with its 2-in-1 notebook offerings, Chromebooks, gaming notebooks and slim notebooks, and it currently ranks fourth in this market.

A slight reshuffling of the company’s board of directors and board of supervisors is also expected to occur in 2017, according to founder Stan Shih. The change includes electing CEO Jason Chen as the new chairman, while also remaining CEO for at least three years.

Courtesy-Fud

Are Tablets Still On The Demise?

February 8, 2017 by  
Filed under Around The Net

IDC has added up some numbers and divided by their shoe size and worked out that they really cocked up when they believed Apple’s propaganda that tablets were “game changers”.

After telling everyone that tablets were to blame for declining PC sales, IDC famously claimed that tablets would overtake traditional PC sales by 2015. Now, it is really regretting believing the Tame Apple Press and supping on Steve Jobs’ Coolaid.

Today they have issued a report saying that there had been a 15.6 percent decline in tablet sales for 2016.

Shipments of tablets – defined to cover both dedicated tablet devices and convertibles like the Surface family of half-tablet half-laptop portables – flopped from 207.2 million in 2015 to 174.8 million in 2016. Traditional PC sales might have been miserable but they still sold 275.8 million in 2015 and 260.2 million in 2016.

It was the high-end tablets that suffered the most. Apple which started the whole thing off by stealing a Microsoft design which was not going anywhere and claiming it invented it saw its shipments drop 14.2 percent. Samsung saw a 20.5 percent decline over the same period. However cheap and cheerful tablets did rather well. Huawei’s shipments jumped nearly 50 percent, though it still holds a minority 5.6 percent share of the overall market, while Amazon’s Fire family of tablets shipped nearly double in 2016 compared with 2015 at a 98.8 percent growth rate.

Ryan Reith, program vice president with IDC’s Worldwide Quarterly Mobile Device Trackers division said that the tablet market continues to grow stale and not even talk of the detachable segment doing well is helping.

Typical tablets without a dedicated keyboard, which IDC refers to as slate tablets, are continuing to lose relevancy across all regions.

“We do see future growth in some emerging markets like the Middle East & Africa as well as Central & Eastern Europe with the sole catalysts being simplicity and low cost. Unfortunately for the industry these are the devices that don’t equate to large revenues.”

Still no apology for helping to lead the market astray by claiming that an Apple marketing fad change everything in the long term.

Courtesy-Fud

Snap Agrees To Pay Google $400M Annually For Cloud Services

February 7, 2017 by  
Filed under Around The Net

Over the next five years, the firm that owns Snapchat will pay Google at least $2 billion in cloud bills.

Snap has revealed in a filing with the US Securities and Exchange Commission that it signed a five-year contract to pay Google at least $400 million a year for cloud services. That’s a steep figure, considering that Snap made roughly $404 million last year.

In return for the massive commitment, Snap will receive reduced pricing, though it’s not clear how deep the company’s discounts will be. Sinking a bunch of money into Google Cloud makes sense, because Snapchat began its life built on top of Google’s AppEngine platform-as-a-service offering.

Furthermore, Snap’s commitment to Google is a massive vote of confidence in the latter’s cloud capabilities, at a time when there’s heavy competition in the cloud market.

Right now, Google’s cloud is an underdog compared to Microsoft and Amazon. But being tied to a rising star in the social media landscape like Snapchat could help draw other companies to at least give Google’s platform a chance.

However, the contract is not without risk. If Snap doesn’t use $400 million worth of Google Cloud services in a year, it’s still on the hook for the full value of the contract. What’s more, the company said in the filing that it uses Google for the “vast majority” of its “computing, storage, bandwidth, and other services.” If something goes wrong with Google Cloud, or if the tech titan gets out of the public cloud business, it could be bad news for Snap.

That last scenario seems highly unlikely, considering that Google continues increasing its investment in its cloud platform. Urs Hölzle, Google’s vice president of technical infrastructure, said last year that the company plans to launch new cloud data centers at the rate of roughly one each month this year.

All of this is tied to Snap’s plans to pursue an initial public offering in the near future. The filing released on Thursday is one of the company’s steps along that path. Snap’s IPO is being closely observed by the tech industry because of the company’s high-flying status.

It remains to be seen how Wall Street will receive the company, especially since it’s far from profitable and its losses have widened year over year. Plus, the deal with Google means that Snap will be saddled with hundreds of millions of dollars in liabilities for the foreseeable future.

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