Nadella Takes the Stage: Bloomberg West (03/27)

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March 27 (Bloomberg) -- Full episode of "Bloomberg West." Guests: AOL CEO Tim Armstrong, Cloudera CEO Tom Reilly, Intel's Diane Bryant and Tibco CEO Vivek Ranadive. (Source: Bloomberg)

Live from pier three in san francisco, welcome to "bloomberg west" where we cover innovation, technology, and the future of business.

A big day at microsoft.

Satya nadella takes the stage for the first time as ceo.

We speak to tim armstrong about his plans to shake up the online ad business.

But first, your bloomberg headlines.

Turkey has blocked access to youtube a week after blocking access to twitter.

They claim it is for national security purposes.

A video about officials talking about military intervention was posted online.

So far, there is no indication when twitter access will resume.

The price tag for softbank is three point $2 billion.

They are going to start a new service called why mobile.

The softbank ceo owns 40% of yahoo!

Japan.

Bitcoin fell on fears of a china crackdown.

Chinese media reported that it had ordered banks to stop doing business with bitcoin exchanges.

An executive tells bloomberg they're waiting to see what happens.

First to our lead story.

A big day for satya nadella.

Microsoft's ceo holding his first major event as head of the company.

He unveiled software for the ipad for the very first time.

Cory johnson was outside the event.

Despite all the people on the streets and the buses arriving, they are not here to see me.

They are here to see satya nadella.

This is his vision of the world of computing.

The world in the next five years, next 10 years, will not be defined by what you know and love today, but by the form factors that will come to be over the coming years.

If you think about the core evolution of hardware systems and software, the there are many new form factors at a pretty rapid pace and that will make computing ubiquitous.

A kind of gives you an idea.

The ceo with a real clear vision of what the future might be, although not quite sure where microsoft is in that.

This is about getting people on all operating systems to subscribe to the microsoft cloud.

Listen to what he had to say when talking about the cloud and devices and how they are working hand and hand with devices.

Icloud that is not connected to devices is latent potential.

How does the cloud interact with the world?

It is through devices.

It could be mobile, tablet, a big screen in a conference room or living room.

Likewise, a device cannot complete the scenarios.

I think it gives you an idea of what they're trying to think about here.

The hundreds of millions of dollars in extra revenues this could mean for apple with this product.

Cory johnson at large.

So, just to is satya nadella and what are his qualifications to run one of the world's largest tech companies?

Take a look at his background.

How would you like to follow this act?

We're developers.

We're developers.

We're developers.

The good news for satya nadella is no one expects him to be steve ballmer or for that matter wants him to be.

In fact, ned dela is now having to deal with the tug-of-war over strategy that hovers over microsoft's ceo.

It did not help that microsoft surface tablet was a dud.

In satya nadella, microsoft promoted a manager who has proven himself on both the business and tech side of the company.

He is an electrical engineer from india who got his mba at the university of chicago.

He has spent 22 years at microsoft.

He ran rmb before he was named head of the server group.

He reengineered that business known -- into the unit known today as cloud and enterprise.

Under his leadership, it has risen to number two worldwide behind amazon.

He is seen as someone who can help microsoft innovate faster as it tries to navigate the post-pc world.

In the meantime, he can still count on windows and office, microsoft's two biggest money makers.

So, just how much will his move onto apple's platform -- what impact will that make?

For more, i am joined by adam, who covers apple for bloomberg.

This sounds good.

This shows kind of an acknowledgment by microsoft that their platform is winning here.

They have come out with their own surface tablet that really was kind of a flop.

And now they are putting one of their most valuable pieces of software onto to the ipad.

Apples does -- apple does have its own technologies we.

Is this a threat?

It does have its own types of processing the come preloaded onto an iphone or nicad, but this is different.

This will be really geared toward business.

That is something where apple has tried to get more and more ipads sold.

So, wbc is coming up.

There is no date yet, but it is normally in june.

What are we expecting?

It is a developer conference.

These are the people who build the thousands of apps that are on the iphone and ipad.

It's typically where you get enough aid on the ios operating system.

They had a big overall last year -- overhaul last year, so there will be an update there.

Several years back, they would introduce new hardware products to go along with it, but in the last few years, they have not done that.

What about a phone?

Analysts say to phones may be coming out this year, one with the screen we all know and one with a bigger screen.

There have been reports -- and we reported as well the development of some bigger screen phones.

That would be helpful for apple particularly in markets like asia where bigger screen phones are much more popular.

It's hard to say.

We will have to wait and see what they do and that is what makes this fun.

What about the watch?

We talked to gene munster who said we are seeing smaller screens in the production line.

Apple may be closer to releasing a watch than we know.

Right.

There are all of these pieces of royalty that good pulled out.

That is a piece of the puzzle in trying to figure out what apple is doing.

We do not have concrete information on when that may be coming out.

What it may end up looking like, we don't know.

There was a book out in which a woman said steve jobs never wanted to make a tv.

Tim cook shot the book down saying it was nonsense.

Where are things with the cable industry, time warner cable?

What is the latest?

Apple has been talking to cable companies since 2007. it talked to comcast about doing something.

Those conversations have continued.

Essentially, what apple was thinking they would do was become a set top box that your cable would come through.

There is a very lucrative business now for the cable companies, the media companies.

They move slowly because things are working out just fine right now.

I know you will keep us posted.

Thanks so much.

Facebook is investing in drones and lasers to help deliver internet to underserved regions of the world.

They call it the conductivity lab and it has wrought in an aerospace company to help with the project.

Joining us now to discuss is sarah.

Facebook is on a tear.

Lasers and rounds?

What is going on.

Lucky for investors, this acquisition was less than $20 -- 20 billion dollars.

What is interesting here is this is really a huge product for zuckerberg.

He is looking long term.

He is realizing that facebook already has most of the internet connected world using its apps and they need to find more users.

So google has broadband balloons they are working on to try to bring internet connectivity to remote parts of the planet.

Is this a new turf war between google and facebook?

I think they are not going to work together on it or at least they have not given any indication that they will, that i think it is something they both know they need to do.

They want to be the one that gets it done.

Facebook wants to get this done.

Google wants to get this done.

They both want the credit.

I don't know how much of a competition it's going to be, but i think they will both benefit.

We talk about things like broadband balloons, self driving cars, google glass.

Is this facebook trying to say hey, we can do moon shots to?

I think the virtual reality acquisition was another nod at that.

Facebook has been pretty steady in its mission, right?

It's been pretty obvious what they needed to do and now they are surprising people, saying we are going to use lasers and drones and lanes -- planes.

It is a little like google or elon musk and all the others trying to make something happen here.

Tell me a little bit about the talent they are bringing on.

They have hired some of the worlds leading aerospace experts.

They created the world's longest solar powered unmanned aircraft.

And they need these aircraft to be in the air for long enough to provide connect tivoli.

They are really looking at nasa, boeing.

These people work with the top aerospace industries around the world.

Fascinating.

Thanks so much for that report.

Coming up, we are going to talk about the obama administration and its plans to change the nsa does business.

? quakes i am emily chang and this is bloomberg west.

After publishing reports on data request, yahoo!

[indiscernible] the report says data was disclosed in 83% of cases.

Google also disclose data in 83% of u.s. cases in the second half of last year.

The report comes from google and yahoo!

Just as president obama proposes a major overhaul of nsa surveillance policies.

He wants to end both a phone data collection and require companies to search their records and report results to nsa anti-terrorism programs.

Phil mattingly joining us now from washington.

First of all, break it down for us, what exactly the president is proposing.

What the white house laid out today is they want to end bulk collection, however they want law enforcement to have access to the same kind of data.

What does that mean yeah cap it means the nsa will not be collecting that bulk data.

The phone companies will keep it, which is what they are required to do now.

The federal government would have to get an update from the pfizer court before they could look at the data.

This is being lauded by privacy advocates as a major step forward compared to where we work.

However, some concerns have already been raised.

The general counsel for verizon has already released a statement saying putting this all on the phone companies might be problematic from a couple of different levels.

So, why is the administration getting so involved in what is now likely going to be a congressional debate?

It is very interesting.

Nobody questions right now that legislation is needed to implement whatever is to come.

The white house perspective is this.

We need to get involved on this because there are segments of the house and senate who want to go even further, want to be even more restrictive.

The white house feels they can preempt that.

They can get more of what they want.

Phil mattingly, our white house correspondent in washington.

Thanks for the update.

Coming up, aol content and ceo tim armstrong talking about the move into advertising.

Welcome back.

Four of the top contenders for the 2016 republican presidential nomination are spending the weekend in las vegas where the republican jewish coalition is meeting.

The candidates are hoping to convince billionaire casino mogul sheldon adelson that they are the ones who can win the white house.

National correspondent josh green is in las vegas outside the venetian hotel where this meeting is going down.

Tell us who is there and why.

You have for blue-chip republican candidates, chris christie of new jersey, former governor jeb bush, scott walker, governor of wisconsin and case it, -- john kasich, the governor of ohio.

Adelson has kind of summoned them out there.

He is really putting on kind of a beauty contest to pick one of these guys and back them with his substantial fortune.

In 2012, adelson dropped about $93 million on the presidential election.

Whichever candidate he chooses stands to gain an awful lot of money from his support, and that is why they are out here this weekend.

Let's talk about sheldon adelson.

Internet gambling is something he does not like at all but something we -- some say a direction we are going in.

He made his fortune in casinos like the venetian right behind me.

Internet gambling poses a threat and he does not like it.

He has helped fund a washington group to stop internet gambling.

This is a big issue within the gop.

I think he is going to have trouble finding support.

Being willing to offer $100 million caret -- to a candidate is certainly an incentive.

Chris christie has supported internet gambling in the state of new jersey, so sheldon adelson may wind up having to choose between supporting an electable republican and supporting a republican who would be inclined to ban internet gambling.

The ones who do support a ban tend to be more unelectable like rick santorum.

I think early on, the word among political insiders was that adelson viewed chris christie favorably despite his position on internet gambling.

That was before the george washington bridge scandal.

That is obviously not christie's support ratings down a little bit.

Word is that adelson is concerned.

But chris christie is here and he is going to have a one-on-one conversation with adelson.

Obviously, he is still in the running for support and i think ranks first-tier among potential republican candidates.

Let's talk a little bit about republican candidates and how they are understanding and using technology.

Historically, it seems republicans felt they needed to embrace technology.

Romney never embraced twitter or facebook the same way obama did.

Is that changing with this new crop of candidates?

That's a great question.

It is changing with some of the candidates.

Republicans, most of them know they got some don tech in 2012. i think the smarter segment of gop hopefuls are trying to consciously embrace innovation economy.

I think it is very unlikely that candidates like those would step up and suddenly endorse a ban on internet gambling.

I think one of the questions to watch or keep an ion in the republican primary is due candidates like rubio and paul him are just strong contenders or will it be somebody from the old school party, somebody like santorum.

I am inclined to believe that rubio and paul will be better candidates.

Josh green for us in las vegas at the sheldon adelson primary.

Coming up, we are going to be talking about aol hoping to get a slice of the online advertising market.

. . you are watching "bloomberg west", where we focus on technology and the future of business.

Aol is looking to make the transition from content to online ad powerhouse.

They just introduced a new ad platform called one by aol.

It helps automate the process of buying and selling online ads.

It uses things they have acquired in recent years.

Cory johnson caught up with aol ceo tim armstrong and asked him to explain more about the new platform.

Have a listen.

Basically, the platform will make advertising as easy as e-commerce.

Lex if only.

-- if only.

This is across all of the different businesses you have.

And our networks.

We have 20,000 or 30,000 other publishers who use our ads.

It would go across the entire ecosystem of our network.

It has also built up and open platform like an app store, so if customers want to bring other partners, it is truly like itunes or amazon.

Is the notion that this will be a parallel or is it the way the ad-buying happens?

Our system is an open system.

You can also bring your own data, your own point of sale information, your own crm data.

It is really powerful.

What are the biggest changes in programmatic -- i am trying to get my head around it.

It is rapidly evolving.

Let's take auto, for instance.

The entire supply chain of automotive's, from the time you dig iron ore out of the ground to the time someone on ebay motors can buy a car, the only piece of that that has not been fully automated is advertising.

The product we are announcing and where the industry is going, the basis is to automate it so that machines can tirelessly do, over a big scale, what humans take a long time doing.

Human capacity in advertising will go to the creative and planning side.

It is about placing the ad or finding the right audience.

You do not want it used human knowledge to do spreadsheet work.

You want them doing creative ideas and trying to find an audience and machines will help them.

This area of gravity, is this all of these things coming together?

Does it replace any of those things?

It all comes together.

Three or four years ago, we said that advertising was almost a $1 trillion industry globally.

It is not automated, for the most part.

Where do we think automation is going to go?

It is probably going to get automated.

We started building a technology stack in each one of those areas.

The most recent one is gravity, which personalizes advertising and content for consumers, a big part of the future of the internet.

And then adapting these into the marketplace online for buyers and sellers.

Our theory is that it will trump a lot of things that have happened on the internet upon to this point.

-- up until this point.

And video and mobile.

People ask what our mobile strategy is.

We actually have a two-for-one strategy.

What is your mobile strategy?

Our mobile strategy is video.

We have seen this work well for advertisers.

If you think about screen size and you watch kids these days and even some adults, it does not matter what size screen they are on.

They will watch a movie on the smallest screen they have.

Our ability to serve video throughout the internet is a mobile, over-the-top strategy and we have been successful thus far.

I was talking to a friend the other day and he became addicted to "game of thrones". when he was at home, his preferred way to watch it was on his ipad.

People like personalization in terms of how they use things and when they use things.

If you are in a normal household in america, you have three or four people in the household.

You have multiple people on different screens, watching different things over time.

There will still be the need for the common human element of watching tv together, but you will see things get much more personalized, which will require a lot more content to get produced.

The trends going forward will be a massive increase in production of content.

A massive increase in ad content that needs to be created and you will see the networks and devices get really fast.

We will go from single cast to multicast on those major carriers, which will explode the amount of video usage, which is already exploding.

Is their standardization around the way that ads show up?

If you go back to the early days of the internet, it started with consumers going to the internet, advertisers going, and it took years for the format to get adjusted to what would work well on the web.

Video is at the early stages of that read -- of that.

We are probably in the first inning right now.

In tumors are second or third inning in terms of usage.

-- consumers are second or third inning in terms of usage.

Cory johnson with aol ceo tim armstrong.

Coming up, intel is making its biggest investment in big data centers ever.

We will explain why next.

? welcome back to "bloomberg west". intel is investing big in big data.

The chipmaker is now the largest a quarter in a company that helps customers manage data.

Cory spoke with intel's senior vice president and asked why the companies are partnering up.

This is groundbreaking for the industry.

We are taking these strengths that they have in the data center, their efforts in performance, scalability, and reliability, and they have a greater than 90% share, and combining that with cloudera, a leader in data management.

Together, we have focused on performance and focus on data management.

How will intel's ron scissors if customers better -- is there some technological thing that can happen?

Absolutely.

It is incredibly processing -intensive and memory-intensive.

And you are trying to move that data to distribute it through new platforms.

That technology is what we do best.

We create technology to make that big data platform excel.

We have done optimizations on our technology and we have delivered over 10x performance.

Why would you not get that across all platforms without this kind of partnership?

It is an open source solution.

People are having the distribution from open source.

We want that to be optimized for intel.

We have engineers that have been working for the past two years to optimize the hadoop for intel architecture.

I am trying to unpack that.

I am not very smart.

I am trying to be though.

The notion is to have the software that is written take advantage of the tools already programmed.

And the features that are embedded into the silica and -- silicon.

Once the software is coded around that, anyone can start building.

Then it can become pervasive.

You need a distributor.

Some will pull directly out of the open source, but there is a high degree of technical savvy that you need to have to do that.

That is where cloudera becomes a critical part.

They become the distributor and add additional value.

Does this new partnership add costs for you?

It is not quite a marketing role, but trying to get the word out for what you are doing?

This allows us to have scale.

We already have a two-year roadmap of optimization that we want to do in hadoop.

A lot of that innovation will come from intel.

It is our responsibility to make sure it is in the open source community.

But look at things that intel ring to us.

They are the number one hadoop distribution in china and india.

We have no presence in those markets.

We have been struggling to get there.

Now we have a presence in two of the largest market opportunities.

This will allow us to scale and do it at a more efficient paste.

What we can deliver is inefficiency down to the acceleration of the hardware.

We are looking for enterprise capabilities and that is where cloudera was the first to market with distribution.

Once you get that, you will get more customers because they will see it is more available.

Not just the speed, but intel is focused on the needs of the data center.

Diane is a former cio who understands things like performance, reliability, governance.

That is what we will bring in addressing those needs.

Today, there is tremendous demand for big data solutions.

You can talk to any cio and he would say that if he had big data analytics, he could deliver better days -- better value to his business.

That gap is a huge market opportunity and a tremendous growth opportunity.

What i hear back are the lack of tools, not the lack of computing power.

Once they get the tools, they will need the power.

It is a combination.

Once you have that data platform running well and efficiently on the intel architecture, now you can start adding the analytics tools, the graphics, the visualization of the data, the complex processing.

If this happens, what even do i take question mark today, enterprise i.t. is not deploying big data solutions because they do not know which solution to deploy.

It is a fragmented market.

No one wants to be locked in.

They want a solution that they can count on and it will last.

Intel has a legacy in open source contributions.

The two come together and we give them a solution.

Were you surprised that intel has a deep understanding of software data at that level?

Looking for strategy, they are driving the internet of things.

They are putting their chips into everything.

Cars, lights, homes.

Bracelets.

They are driving that explosion of data in that system.

My wearable -- the world is becoming instrumented and intel is driving that with the internet of things.

The value is getting all of that data and getting insight out of it.

That is our job, to make the data more accessible and able to be analyzed.

It will make all of us happier.

Cory johnson with the intel senior vice president and cloudera ceo.

Coming up, could immigration reform help find the next satya nadella?

One prominent ceo says yes.

We will ask him how next.

And you can watch a streaming on your tablet, your phone, bloomberg.com, and apple tv.

? welcome back.

I am emily chang and this is "bloomberg west". silicon valley has taken center stage in the immigration debate.

One silicon valley ceo argues that green cards should be attached to u.s. college degrees.

I want to talk about that more with vivek ranadive, also in the studio with cory johnson now.

Tell us your story, your immigration story.

I find it so fascinating.

I left when i was about 17 years old and came to this country with $50 in my pocket.

What was the first thing that you did?

I went to a place called eastern mountain sports and bought myself a parka.

In bombay, it is hot and it was starting to get cold.

Then you had about $10 left.

I had very little money.

They had a special for foreign students and we bought them in bulk and gotten cheap.

Now you find yourself ceo of tipco software, owner of the sacramento kings, which is why i wore purple for you.

When you look at the immigration seen right now -- scene right now, we have the ceo of microsoft and so many prominent indian americans running companies.

Talk to me about what the state of that is right now.

There is no industry that is more fueled by brainpower than the high-tech industry.

Nearly half of the companies that have been founded in the last decade have immigrant founders.

So it is crazy that we send somebody to m.i.t. and spend hundreds of thousands educating them to get a phd and then we say to them, goodbye, go home now.

We should be attaching a green card to their diploma and encouraging them to stay.

Should there be any other requirements other than they have a degree from the u.s.? it is a very competitive world right now.

If you get a degree from a college like m.i.t. or any college in a technical area, then i think we should be encouraging these kids to stay.

Issues holding that up have not been disagreement with either party about certain kinds of immigration.

It is the opposition to lo-skilled workers coming into the country that seems to hold up the passage of these rules.

Are we as a nation or a technology community at a competitive disadvantage because the insistence on comprehensive immigration reform or is it just the moral, right thing to do?

I believe that you have to decouple it.

It is a competitive this advantage -- disadvantage.

All we ask for in silicon valley is to hire the best and the brightest.

We still have to convince them to come and stay at our companies.

We are not forcing them to stay.

They have a choice.

Just make it easier by giving them that green card.

What do you think of mark zuckerberg's approach with all of the tech heavyweights that are backing him?

I think it has been effective.

The people that are backing that initiative.

We have to all do whatever we can so we can keep these kids.

Tell me about culture.

How it is infiltrating or being seen more in silicon valley.

You have an indian night coming up with the kings, something you did for a while when you were part owner of the golden state warriors.

I also think culture is coming more to the forefront than it has in the past.

There are a lot of indian and chinese and asian engineers.

We tried to expand -- at my company, we have indian food, chinese food.

Yum.

We want to make these people as comfortable as possible.

This is what makes silicon valley so special.

We are the most open place on the planet.

We do not care what you come -- where you come from or what you look like, what kind of food you like.

It is an open place.

We want to be the ultimate open system.

If immigration reform does not happen, what is the result?

Just think about it.

Half of the companies that have been founded in the last decade or two have immigrant founders.

There has been $1 trillion of wealth created in silicon valley.

If we do not have access to those immigrants, there is going to be an impact.

Are we seeing that already?

Your company has seen six quarters of single-digit or even negative sales growth.

I wonder if you tie that directly to innovation.

His lack of innovation hurting our ability to make new products ? half of our revenue will come from products that we have not even invented yet.

I need them from all over the world, india, china, south america.

I need that brainpower.

Thank you so much for sharing your story and your views with us.

It is time for the b-west byte, one number that tells a whole lot.

John, what do you got?

It is 7, as in seven days.

On april 2, amazon says they will have an event in new york tied to video.

They sent out an invitation to the press and a lot of evil think this will be the long-anticipated set top box to compete with apple tv, roku, goo gle, chromecast.

In the invitation, there is a little bit of popcorn.

Maybe there is -- maybe it is tied to movie initiatives.

"alpha house", we are hearing it will get a second season.

Indian food, chinese food, popcorn -- [laughter] potentially the elusive amazon set top box.

We will be covering that next week.

All of the different devices and all of the stuff in the cloud.

We cover all of these different companies like tipco and microsoft and amazon.

Thank you for watching.

We will see you later.

?

This text has been automatically generated. It may not be 100% accurate.

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