Data Sheet—Thursday, February 5, 2015

Good morning, Data Sheet readers. The FCC’s chairman wants to classify and regulate Internet service providers like telecommunications companies. Disaster recovery company Veeam Software just won part one of its patent fight with Symantec. Plus, be careful what you Tweet: a rumored deal between Twitter and Google could add your 140-character anti-manifestos to search results.

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SCUTTLEBUTT

Your Tweets could soon have a much broader audience, thanks to a pending deal between Twitter and search giant Google.

Looks like a date. Microsoft may have shelled out at least $100 million to buy Sunrise, which makes calendar app software.

$1.2 billion shopping spree? Sounds like that’s how much Oracle paid for marketing tech company Datalogix.

Who needs innovation, anyway? The eBay layoffs keep coming, and the new projects division was hit hard. Plus, it looks like its executive lead, Steven Yankovich, is now in charge of eBay Enterprise. Which may or may not be sold or spun out, too. Got that?

3 THINGS TO KNOW ABOUT THE NET NEUTRALITY SAGA

After weeks of telegraphing his intentions, FCC Chairman Tom Wheeler officially confirmed Wednesday the commission’s plan to push for stronger regulation of Internet service providers. Basically, he wants to treat them more like utilities.

The proposed rules (which the full commission will consider and vote on at a Feb. 26 meeting) are meant to discourage policies that would favor certain types of traffic over others—in exchange for payment.

Wheeler explains his decision in a Wired editorial:

“These enforceable, bright-line rules will ban paid prioritization, and the blocking and throttling of lawful content and services. I propose to fully apply—for the first time ever—those bright-line rules to mobile broadband. My proposal assures the rights of internet users to go where they want, when they want, and the rights of innovators to introduce new products without asking anyone’s permission.”

There have been many twists and turns in the “net neutrality” saga, but here are three things to consider regarding this latest development.

Cisco, IBM, and Qualcomm are in “strong opposition.” Back in mid-December, they were among more than 60 companies that flooded every branch of the government with a letter” arguing against Title II regulation. Theirs is an economic argument: “As some have already warned, Title II is going to lead to a slowdown, if not a hold, in broadband buildout, because if you don’t know what you can recover on your investment, you won’t make it.” Interestingly, another topic the FCC intends to discuss later this month is a plan that would make it easier for cities to build their own municipal broadband services.

Verizon is really steamed, and a suit is likely if the rules pass. Michael Glover, the telecommunications company’s principal executive for public policy and government affairs, voiced his company’s displeasure in strong terms:

Heavily regulating the Internet for the first time is unnecessary and counterproductive. It is unnecessary because all participants in the Internet ecosystem support an open Internet, and the FCC can address any harmful behavior without taking this radical step. Moreover, Congress is working on legislation that would codify open Internet rules once and for all. It is counterproductive because heavy regulation of the Internet will create uncertainty and chill investment among the many players—not just Internet service providers—that now will need to consider FCC rules before launching new services.

Expect the requisite Congressional fight. The FCC’s proposal is at odds with Republican-backed legislation calling for a middle ground. The bill calls for “Internet openness” but explicitly prohibits the FCC from using the telecommunications act to regulate service. “Regulating the Internet through ill-suited and antiquated authorities that were designed for the monopoly phone era will ultimately make the Internet more rigid and less innovative,” warned Senator John Thune (R-S.D.), one of the bill’s sponsors, in response to Wheeler’s proposal.

UP-AND-COMERS

Startup Veeam Software fends off one of two Symantec patent challenges. We’ve gotten used to intellectual property challenges pitting innovators against incumbents. We love it when the underdog wins, provided it deserves to.

While it still isn’t out of the woods, disaster recovery tech company Veeam has successfully defended one of two suits brought against it in 2012 by the much-larger Symantec. A second case is still pending; another ruling is expected in April 2015.

Despite the legal threat that has been hanging over its head, the privately held Veeam just reported a 40% increase in booking for 2014, reaching $389 million. OF that amount $101 million came from renewals, according to the company.

Since Veeam shipped its first product in 2007, it has generated $1 billion in sales. When I chatted with CEO Ratmir Timashev late last year, he said the company is signing approximately 3,500 new customers every month: its current total is 135,000. At the time, Timashev told me Veeam should grow another 35% during 2015, to around $450 million in revenue. Incidentally, the company has managed this organically. It hasn’t taken any venture capital, and it isn’t interested in going public. “We don’t need the currency that an IPO provides,” Timashev told me.

Investment banking firm Stifel cites Veeam’s “impressive” growth in a report about CommVault, which is one of its most direct competitors. But it also makes note of its rather small deal size: “well below $10,000.” That means it’s scoring with small and midsize businesses, not necessarily big accounts.

Want a recommendation? Profitable startup Taboola snagged $117 million led by Fidelity Investments. Its technology is used by digital marketers to serve up “related” articles when you click on an Internet-published news story.

New CEO for database disruptor Aerospike. The company has scored some pretty high-profile customers for its “world’s fastest” database technology—travel booking service Kayak uses it to personalize recommendations for site visitors.

As of today, it has a new top executive, former Salesforce.com and Hyperion Solutions CEO John Dillon. His background also includes high-profile positions at Engine Yard and Oracle. So far, Aerospike has raised about $22 million. Its most recent round was a $20 million Series C event led by New Enterprise Associates.

Signed, sealed and delivered. Email service provider Message Systems, which manages more than 2.5 trillion messages annually for the likes of American Express and Facebook, just bought Port25 Solutions, which does much the same thing for smaller companies. Terms of the deal weren’t disclosed. But CEO Phillip Merrick said it positions Message Systems as “the only company capable of serving the email infrastructure needs of companies of all sizes—from developers at startups through the world’s largest senders with both cloud and on-premise solutions.”

Leadership reset for Vidyo. Foudner Ofer Shapiro (who stays as vice chairman) was replaced by the company’s current chief revenue officer Eran Westman. Plus, it hired a new technology leader with a background in wireless technology, Guy Resheff.