Data Sheet—Tuesday, December 23, 2014

Good morning, readers. Oracle is adding to its arsenal of digital marketing technologies. Plus it looks like two very high-profile cybersecurity attacks had one very simple cause: carelessness over passwords.

I’ll be back tomorrow morning with one more edition before the Data Sheet takes a long winter’s nap, returning on Jan. 5. Want to give me an early Christmas present? Forward this newsletter to colleagues and business partners, and tell them to sign up! Did you miss one? Here’s an archive of past editions.

Who's buying what and why? Oracle is paying an undisclosed sum to buy consumer data firm Datalogix, which tracks more than $2 trillion in retail spending and helps identify which advertising message triggered the impulse to buy. The software company plans to use these metrics along with behavioral information from its Bluekai platform as part of a new digital marketing measurement service. Consumer privacy watchdogs like the Center for Digital Democracy are already crying foul. Wired, Gigaom

How the Sony, JPMorgan hackers got in. This wasn't the work of some super-hacker. In fact, it looks like stolen password credentials were to blame for both the summer breach at the bank and the autumn cyberattack at the entertainment company. The thieves logged in to collect the data they wanted. JPMorgan's incident was linked to the one server (yes, it takes just ONE) that it neglected to update with stronger two-factor authentication. That technique requires someone to use both a password and some other code to gain access. New York Times, CIO Today

Misstep for e-commerce giant Alibaba? Retailers and other businesses that hoped to use its Tmall Global platform as an entry point for selling into China are unhappy with early results. Almost 70% of the stores are doing very little business, according to a Wall Street Journal analysis.

RESEARCH & PREDICTIONS

Your 'e-reader' may keep you awake. If you want to read yourself to sleep, you're better off grabbing a paperback than a tablet, according to a (limited) Mayo Clinic study. Staring at a backlit screen can mess with human circadian rhythms, which means you'll take longer to nod off. A caveat: the research centered solely on using an iPad at full brightness for these purposes, not what you'd actually consider a "true" e-reader, like a Nook or Kindle. Ars Technica, Gigaom

STARTUPS & DISRUPTORS

$1 billion per year. That's the average annual investment in enterprise storage startups in each of the past several years. What's the inspiration? A perfect storm of cloud data center build-outs, faster solid-state technologies, and smarter management software. Here are the companies to watch. Fortune

Starbucks, Square split (mostly) on mobile strategy. You can no longer buy your grande carmel mocha latte, skinny, using Square's app Wallet. That's partly because Square is shifting its development direction, and partly because Starbucks is about to roll out its own brand-new app. Starbucks processes about 7 million mobile transactions every week, or about 16% of all orders. Wall Street Journal

Salesforce loses top analytics engineer. Fayyaz Younas, who engineered the Wave product introduction this fall, has joined startup Kahuna. His new employer focuses on using machine learning for mobile marketing applications. WSJ

CLOUD CHATTER

This startup's secret sauce is performance, not scale

When it comes to selling computer servers, storage or network access as cloud services, no upstart can beat the scale boasted by Amazon Web Services, Microsoft, Google, or IBM.

That's why six-year-old Virtustream spends more time talking up things those companies can't do as well as it can—like offering service-level promises for sophisticated business applications running on its cloud servers, especially those from SAP. "We focus on better availability for enterprise apps. It's an entirely different engineering problem," said co-founder and CEO Rodney Rogers.

Based in Bethesda, Md., the company just showed up as one of two "leaders" in Forrester's new ranking of experts in private cloud computing installations (the other one was Datapipe). Along the way, Virtustream has quietly signed up almost 1,000 accounts, split between service providers like IBM that are licensing its cloud management software for their own cloud services and large corporate customers such as Domino Sugar that use its cloud computing capacity.

Rogers said Virtustream wins deals because sales requirements that involve moving software from an on-site data center into the cloud have become far more nuanced, and very specific when it comes to security, data sovereignty, and performance. "Speaking in absolutes in this space is absolutely, fundamentally flawed," he said. "The buyer IQ has increased dramatically."

So far, the company has raised $120 million in backing: its most recent round was $40 million in September 2013 led by SAP's venture arm. (Other investors include Intel Capital.) This year, the software company expects to exceed $100 million in revenue for the first time, Rogers said.

"We have substantially more planned for 2015," he added, classifying almost two-thirds of the company's revenue as recurring.

Given the many cloud management software companies that have exited the market—notably Eucalyptus, acquired by Hewlett-Packard in September—is there an initial public offering in Virtustream's near future? Roger isn't committing officially, but "we feel that we could be prepared to do this."

MY FORTUNE.COM BOOKMARKS

Destress during the holidays: Tips for 'Type A' professionals By Donna Fenn

The Justice Department is now in your boardroom, in a big way By Chris Matthews

The latest trend in startup names? Regular old human names By Erin Griffith

Exclusive: Data Collective raises $125 million for 'opportunity fund' By Dan Primack

China's Xiaomi is now worth more than Uber By Laura Lorenzetti

FOR YOUR INNER TECHNOPHILE

Google's self-driving car graduates from mockup to prototype. After refining its autonomous vehicle technology with tricked-out Toyota Priuses and Lexus SUVs, the tech giant is building about 100 prototypes of its first model. It will test the two-seater for the next several years. Fortune

ONE MORE THING

Will Woz move to Oz? Apple co-founder Steve Wozniak was just granted permanent resident status in Australia. He's buying a house in Sydney, where he's teaching classes in robotics and computer engineer. Ars Technica