Softbank raises $1bn from Sharp for $100bn Vision Fund

Japanese electronics company Sharp has become the latest firm to back the enormous $100bn Softbank Vision Fund, with a $1bn investment on May 18. Announced last October as the technology investment arm of Japanese telecommunications corporation Softbank, the Softbank Vision Fund will be the world’s largest private equity fund.

The main backers of the fund are Softbank, with a $25bn investment, and the Saudi Arabian Government, with a commitment of $45bn. The fund is integral to Saudi Arabia’s new 2030 economic plan to reduce reliance on fossil fuels over the coming years as resources run low and people switch to greener means of energy production. Earlier this year, Apple also pledged $1bn to the fund. In a statement in October, Softbank CEO Masayoshi Son said the Softbank Vision Fund would be “the biggest investor in technology” over the next decade.

The main backers of the fund are Softbank, with a $25bn investment, and the Saudi Arabian Government, with a commitment of $45bn

Son has ambitious plans to match or beat the 44 percent rate of return that he claims Softbank has delivered internally through investment in internet companies over the past 18 years. To meet this aim while avoiding the bloated unicorns the tech industry is known for, the fund will seek to invest in technologies with the biggest potential for widespread commercial application.

Reuters has reported that sources close to Son say he is attempting to staff the Vision Fund with investors who have industry specific expertise and will be able to spot potential disruptive technologies. Rajeev Misra, Softbank’s head of strategic investment, will lead the fund.

While many of the rest of the world’s largest technology funds are based in Silicon Valley, Son has chosen the rather unlikely site of London’s Mayfair district for the firm’s headquarters, opening offices at 69 Grosvenor Street last December. Despite choosing a UK base, Son has not turned his back on the US tech industry. In December, Son told President-elect Donald Trump he would create 50,000 new jobs in the US through a $50bn investment in start-ups and new companies over the next five years. Son is expected to announce the close of the first round of funding for the Softbank Vision Fund imminently.

Microsoft announces South African data centres

On May 19, computing giant Microsoft unveiled plans to open two huge cloud storage facilities in South Africa in its first data centre expansion into the continent. The facilities will be located in Johannesburg and Cape Town, and will be used to deliver Microsoft Azure, Office 365 and Dynamics 365 services when they come online in 2018.

The centres will serve all Microsoft customers, yet could be particularly useful for start-ups and NGOs. Since Microsoft has no substantial data centres in the region, its cloud-based customers presently have to store their data in European facilities, which take a long time to process information because they are so far away.

Last year, total cloud revenues in South Africa were about $243m, yet are now set to grow by roughly 20 percent per year until 2021

“This new investment is [a] major milestone in our mission to empower every person and every organisation on the planet to achieve more, part of our ongoing effort to create a cloud for global good and an extension of the efforts we have put in place to invest in Africa”, said Scott Guthrie, Executive Vice President of Microsoft’s Cloud and Enterprise Group.

Last year, total cloud revenues in South Africa were about $243m, yet are now set to grow by roughly 20 percent per year until 2021. With more digital data these days, South Africans need better storage solutions. This trend has largely been fuelled by the forward march of vital web infrastructure such as electricity and wi-fi services in the country, as well as the rise of internet-connected devices such as laptops and Huawei smartphones.

With similar stories unfolding in other emerging markets, rival tech firms Amazon and Google have also been scrambling to establish data centres across the world. Although Microsoft claims to be in front, with 40 ‘cloud regions’ worldwide, Amazon says that its Web Services Cloud division has 42 ‘availability zones’ in 16 countries. Meanwhile, Google has just 23, mainly in Europe, North America and the Asia Pacific region.

“This is a significant announcement, as none of the top-tier cloud providers has traditionally had a data centre footprint in Africa. It therefore gives Microsoft an enormous first mover advantage on the African continent”, said Jon Tullett, an IT research manager at IDC Africa.

Microsoft presently offers cloud services to big corporate clients, including Standard Bank of South Africa and the South African State Information Technology Agency. It has also brought web connectivity to some 728,000 SMEs in Africa more broadly, where the Microsoft Cloud is also being used to provide training and education to 775,000 people. Data centres like those in Johannesburg and Cape Town will be vital in extending these efforts, and could be an excellent foothold for future growth as the region’s web connectivity grows.

Catalonia is the ICT hub Europe’s modern start-up sector needs

Catalonia, with Barcelona playing a key role, has always looked beyond its own borders to build a creative society and to foster a dynamic, entrepreneurial attitude, with innovation as a key driver of progress. Today, more than 7,000 international companies run operations in Catalonia. Together with local firms and tech centres, they create a diverse and dynamic business ecosystem.

ICT, smart activities and mobile innovation play a significant role in Catalan economic vitality. With around 12,800 ICT firms and 84,600 highly skilled workers, the number of ICT companies in Catalonia has been constantly growing since 2008. In fact, from 2010 to 2016, Catalonia has consistently ranked second in southern Europe in terms of FDI projects and job creation in the ICT sector.

Barcelona is the 2012-23 Mobile World Capital, hosting the GSMA Mobile World Congress – the international flagship mobile event – on an annual basis

On the map
Barcelona is the 2012-23 Mobile World Capital, hosting the GSMA Mobile World Congress – the international flagship mobile event – on an annual basis. The city is also the most trusted Internet of Things (IoT) hub in Europe; the IoT Solutions World Congress in the Catalan capital is the sector’s leading industry event. Barcelona is also the world’s second smart city (after Singapore) and hosts the Smart City Expo World Congress – the top global smart cities event.

This technological prowess is being harnessed by a range of businesses. In the smart technology industry, top companies such as Oracle and Seat (part of the Volkswagen Group) are implementing Industry 4.0 solutions in Barcelona. In the 3D printing sphere, HP’s largest facilities outside the US are in Catalonia. In terms of smart cars, the Catalan ecosystem is home to numerous testing centres and industry hubs. In the big data sector, Catalonia is a leading European player, with Barcelona’s Big Data Centre of Excellence offering support and expertise to companies.

Robotics, cybersecurity, videogames, drones and e-commerce are all thriving in the region too. What’s more, Catalonia boasts a number of industry-leading ICT transfer centres, including the Eurecat Technology Centre of Catalonia, different research groups in universities such as BarcelonaTech, and scientific and technological infrastructure such as the Barcelona Supercomputing Centre.

Talent attracts talent
With over 1,100 start-ups in the city, Barcelona is one of Europe’s most dynamic business ecosystems, especially in the field of new technologies, which attracts venture capital interest from a range of international investors. Barcelona is Europe’s fifth-largest start-up region, behind London, Paris, Berlin and Amsterdam, while the CITIE’s 2015 report listed Barcelona as the fourth-best city for digital entrepreneurship.

An outstanding academic system generates top-level talent in engineering and ICT, with Barcelona a competitive city in terms of IT salaries across Europe. Excellent career prospects and attractive business and leisure opportunities attract those skilled professionals from across the world who share Catalan professionals’ talent, commitment, energy, know-how, curiosity and work ethic.

Support structure
Catalonia Trade & Investment is your ideal project manager. With over 30 years’ expertise in international investment, 39 trade and investment offices around the world, and over 5,000 investment projects managed, we offer fully tailored support to set up your ICT business in Catalonia.

Working with your specific business needs in mind, we provide you with all the relevant information on moving or setting up your business in Barcelona, a city that ranks extremely well in terms of living costs and office costs. Furthermore, we help to increase the viability of your ICT projects with expert, in-depth support on financing possibilities and recruitment, as well as information on mobility procedures for executives. Our deep local business knowledge and unique access to key institutional players help ICT companies find technology and business partners, supplier sourcing, and long-term growth support throughout their lifespans.

Facebook fined €110m over 2014 WhatsApp merger

On May 18, the European Commission announced that Facebook has been fined €110m ($122m) by EU antitrust regulators for providing misleading information during a 2014 investigation into its $19bn acquisition of messaging service WhatsApp.

In a statement, the European Commission said Facebook had informed the Commission it would not be able to automatically match user profiles between WhatsApp and Facebook. However, in August 2016, WhatsApp announced updates to its service that entailed doing exactly that.

The Commission found that the technical capacity to match users across platforms had existed in 2014, and highlighted that “Facebook staff were aware of such a possibility” in its statement.

Facebook can add data from WhatsApp conversations to detailed user profiles, enabling it to target very specific groups of users

Access to users’ WhatsApp data potentially gives Facebook an unfair advantage in selling targeted advertising; Facebook can add data from WhatsApp conversations to detailed user profiles, enabling it to target very specific groups of users. Competitors have no access to the vast mine of personal data for WhatsApp’s billion-strong user base.

European Commissioner for Competition Margrethe Vestager described the fine as “proportionate and deterrent”. ”The Commission must be able to take decisions about mergers’ effects on competition in full knowledge of accurate facts”, she added.

The Commission ruled that the findings would not impact on its decision to authorise the 2014 merger, stating that “albeit relevant, the incorrect or misleading information provided by Facebook did not have an impact on the outcome of the clearance decision”.

Facebook echoed this statement, adding: “The errors we made in our 2014 filings were not intentional.”

This fine is the latest in a series of penalties issued against Facebook and WhatsApp by EU authorities, suggesting growing concerns over Facebook’s use of EU citizens’ data.

On Tuesday, Facebook received a €150,000 ($166,000) fine from France’s data protection watchdog for privacy violations relating to the inappropriate use of individuals’ data for advertising. It is still under investigation in the Netherlands, Germany and Spain for similar infringements. Last Friday, Italian antitrust authorities issued WhatsApp with a €3m ($3.3m) fine for compelling users to agree to share personal data with Facebook.

Germany is also considering legislation that would give authorities the power to issue social media sites such as Facebook with fines of up to €50m ($56m) for refusing to clamp down on fake news and hate speech.

Messaging app Symphony receives $1bn valuation

Symphony Communication Services, a company that provides a secure messaging service to some of the world’s biggest investment banks, has raised $63m in a funding round led by French bank BNP Paribas. Reuters reported that, according to a source familiar with the funding, this latest investment gives the company a valuation of $1bn.

Born in 2014, when a group of banks led by Goldman Sachs bought instant messaging software company Perzo, Symphony has been dubbed the ‘Bloomberg killer’. Many of Symphony’s investor/customer banks, including the likes of Bank of America Merrill Lynch, HSBC and JP Morgan regarded the Bloomberg Terminal as an expensive and excessive product, providing data in quantities too large to be useful for traders.

WhatsApp has over a billion regular users, but, at the time it was bought by Facebook for $9.3bn last February, it had never made a profit

Symphony combines an instant messaging service with a heavily pared down alternative to a Bloomberg Terminal’s functionality. It offers voice and video chat and, as with other business messaging services, users can download specific add-on apps they require. Since Symphony is currently only used by investment banks, the list of available apps is small and finance-specific. This streamlined service attempts to do away with the data oversupply deemed problematic with Bloomberg Terminal.

Symphony is pursuing a different business model to other corporate messaging apps, such as Slack. Rather than drawing in millions of users with the lure of a free service, Symphony has built a niche customer base willing to pay. The market for messaging apps is dense and even those with a large user base are hard to monetise. WhatsApp has over a billion regular users, but, at the time it was bought by Facebook for $9.3bn last February, it had never made a profit.

Financial service companies have to meet strict compliance guidelines, such as retaining and scanning all digital communications between staff. In an interview with Bloomberg, David Gurle, Symphony’s CEO, explained that this is where Symphony has an edge on Slack. Symphony is designed to ensure compliance criteria are met using, for example, built in filters and warnings in chat rooms.

Symphony plans to expand its user base beyond financial services by capitalising on its ability to help companies meet compliance requirements in other heavily regulated industries, such as healthcare and law.

Reuters has also reported that Symphony plans to attempt to expand into Asia; a large office has been established in Singapore and Gurle has relocated there. However Asia may prove a more difficult market to penetrate thanks to the ubiquity of WeChat, a hugely popular app used for everything from booking doctors appointments to managing all types of social media.

Boston Scientific redefines healthcare partnerships

Digital technologies are enabling breakthrough research to be carried out at an astounding pace in healthcare – research that’s leading to a more precise understanding of patient needs across a wide spectrum of disease states, and enabling more effective therapies and more comprehensive, tailored care. As a result, new forms of digitally enabled services and solutions are improving, becoming more functionally effective and more cost-effective to deploy at scale. What’s more, governments, providers, payers, and pharmaceutical and medical device companies are leveraging these developments, exploring new approaches, strategies and business models to spark a major improvement in health and healthcare. At the same time, however, this increasing array of treatment paths can be overwhelming for healthcare providers and their patients, particularly for the growing number of people who are suffering from complex and enduring conditions such as chronic heart failure.

Partnership is needed among and across the various healthcare stakeholders to use real-world data and evidence to determine which patients gain the most benefit from which interventions, and how those decisions might change with new forms of post-acute and post-discharge care coordination. It’s critically important that teams of provider systems, payers, and pharmaceutical and medical device companies work together to improve patient care and maximise the opportunities presented by current and evolving technologies.

Organisations such as the International Consortium for Health Outcomes Measurement are on the case; they are committed to unlocking the potential of value-based healthcare. But even with this organisation’s increasing presence and support, change won’t be easy for stakeholders shifting to a value-based healthcare environment.

Collaborative approach
Boston Scientific has had the good fortune to work with some of the world’s leading institutions towards the goal of defining what best practices for the next generation of healthcare might look like. A good example is the care of patients with chronic heart failure, which has been identified as one of the costliest disease states to manage. In Europe, heart failure accounts for about two percent of healthcare spending, and results in average hospital stays of 11 days. Many of these costly stays are readmissions, which raises the question: is there a way to help patients stay out of the hospital after receiving treatment for heart failure? To answer, we embarked on a research project in collaboration with global life sciences service provider Accenture, and some of the leading institutions in Scandinavia and the UK, to assess the current state of care delivery for heart failure patients and to identify opportunities for improvement at each hospital.

The work resulted in the development of a cloud-based, data-driven digital solution that will become part of our growing Advantics portfolio of innovative healthcare solutions. Essentially, the solution gives providers more robust and timely insights into their patient populations, so they can make better and more proactive decisions designed to improve the care patients receive, both while they are in the hospital and after they are discharged. To do this, it relies on Accenture’s analytics insights platform to monitor three key measurements: patient engagement (the content and tools to support patients as they self-manage their condition); care coordination (the technology platform to enroll and consistently follow up with patients post discharge); and pathway analytics (the dashboards to track heart failure patient outcomes and financial impact).

Partnership is needed among and across the various healthcare stakeholders to use real-world data and evidence to determine which patients gain the most benefit from which interventions

Maria Stewart, Vice President for Health Economics and Medical Affairs at Boston Scientific, said of the project: “We know it isn’t good enough for innovative technologies to only improve clinical scenarios; they have to be sustainable in the real world as well. They have to improve patient outcomes and offer economic value to healthcare systems.”

This fundamental outlook drove the project, particularly at Tampere Heart Hospital, a full-service centre with multidisciplinary heart teams providing services throughout Finland and beyond. Dr Kari Niemelä, CEO, noted: “The collaboration with Boston Scientific identified significant opportunities to increase provider collaboration and improve the quality of care that patients experience when coming to our hospital. For example, we found a 25 percent unnecessary heart failure readmission rate, and therefore a definite need for better care coordination, supported by modern technology and processes that can decrease overall costs.”

Dr Jeff Elton, Managing Director of Accenture Strategy and global lead for the predictive health intelligence and patient health practices at Accenture, shares this view: “Realising value is a function of recognising early what is best for a patient, preparing the institution and the patient for what needs to be done, and better equipping and partnering with the patient for self-care and self-management once they are discharged. That’s extremely difficult – if not impossible – for any single organisation to do on its own, especially in this day and age. And so it really has to be a journey undertaken with partners that bring their own capabilities and distinctive talents to the table, and share the relentless perseverance it takes to succeed.”

At Boston Scientific, this initiative has helped advance a patient-care-services approach to our work, in addition to our focus on developing medical devices. We know we can contribute to achieving the best possible clinical and economic outcomes in a variety of ways, with our medical device innovation and with digitally fuelled solutions. This collaboration was less about developing a particular product and more about figuring out how to enable a hospital to treat many more patients in a better way, while being extremely conscious of the current cost structure and the need to reduce costs where possible.

Catheterisation lab innovation
Tampere Heart Hospital has been pursuing other ways to improve patient services, for example through the continuous improvement programme it has implemented in its catheterisation lab for cardiac rhythm management patients.

Tampere has limited resources, a constrained budget, and limited experience with change management initiatives. In 2013, its leaders committed to finding a way to build continuous improvement into its operations. Focusing on the lab, they wanted to be able to treat more patients while improving its outcome/cost ratio at the same time. If their efforts were successful, they could extend this work across other areas over time.

The project began with a complete analysis of the lab’s infrastructure and processes. Here, Boston Scientific was again able to contribute. Working alongside Tampere senior staff as part of a team called Tahti (the Finnish word for ‘pacing’), we began with a workshop to identify opportunities to optimise patient flow.

The workshop generated 29 improvement ideas that Tampere has since pursued, including: redesigning the elective patient process to create a more efficient patient flow (targeted improvements included rigorous on-time procedure starts, preparation of the lab and procedure details the day before, and clearer processes for scheduling elective activity and managing the emergency caseload); improving patient treatment plans (in particular, ensuring named staff are allocated to each treatment, preventing any gaps or uncertainties); and using whiteboards to track employee satisfaction (staff members logged their mood at the end of each day, and started each new day with a ‘huddle’ to review status and discuss improvement ideas).

Tampere also articulated its strategic goals in terms of actionable, measureable activities. Specifically, over a seven-year period, the Heart Hospital determined to: increase the number of pacemaker patients treated by 30 percent; reduce the number of patient follow-up appointments required by 50 percent; and improve procedure process flow, reducing the total time patients spend in the lab by 20 percent.

After six months, the lab had a robust process in place to measure and share performance data. Staff satisfaction levels had also improved, largely as a result of clearer objectives, roles and responsibilities. And, after a year, the number of pacemaker patients treated had increased by nine percent, while those requiring follow-up appointments had decreased by 14 percent.

Looking ahead, Tampere plans to broaden responsibility for improvement activity. Teams of doctors and nurses will begin working on various initiatives, guided by experienced Tahti project coaches, who will also pursue training in lean Six Sigma tools and principles.

Device innovation
Partnerships and collaborative relationships are the key to a truly transformed healthcare landscape. However, that doesn’t mean companies like ours should spend any less time focusing on our traditional core: medical devices. This area holds endless promise to improve patient outcomes and deliver cost savings over the longer term.

The Watchman left atrial appendage (LAA) closure device, designed to reduce the risk of strokes in patients with non-valvular atrial fibrillation (AF), provides a good example of delivering value to both patients and healthcare systems. The Watchman device was designed to be an alternative to long-term warfarin therapy. Implanted in a patient’s heart, it works by closing the LAA, which is believed to be the source of a majority of stroke-causing blood clots in people with non-valvular AF. By closing off the LAA to prevent the migration of blood clots, the risk of stroke may be reduced and, over time, patients may be able to stop taking anticoagulants. The Watchman device was demonstrated to be non-inferior to warfarin for ischemic stroke reduction and superior for haemorrhagic stroke and all-cause mortality. Among patients studied, more than 90 percent were able to discontinue warfarin use after 12 months. A recent economic analysis has also demonstrated that the Watchman device can be a cost-effective and cost-saving alternative to warfarin.

“For those high-risk patients with non-valvular AF who are doing well on warfarin or other blood thinners, those drugs can be life-enhancing and life-saving”, said Dr Kenneth Stein, Chief Medical Officer for Rhythm Management at Boston Scientific. “However, for those patients who are poor candidates for long-term blood thinners and who have a rationale to seek an alternative, the Watchman device is the only device-based alternative whose safety and efficacy are proven in multicentre randomised clinical trials. In addition, we expect the device to offer economic value to healthcare systems by avoiding the costly complications of stroke and of bleeding complications due to blood thinning medications.”

Sense of duty
We see it as Boston Scientific’s responsibility to develop more and better disease management solutions that lower the costs of delivering care, reduce readmissions, and support the complicated task of patients self-managing their care. It is also our responsibility to pursue collaborations with these goals in mind. We’re gratified by the successes we have achieved, but this is not a time for complacency. Healthcare systems and people are always more complicated than any analysis will reflect, but there are outcomes we can achieve and there is value accessible to us today that remains unclaimed.

We are continuing to focus on digital medical technologies and solutions, and we’re committed to doing so in close collaboration with our customers and partners. There’s never been a better time to be in the business we’re in. Working together, we can make a positive and sustainable difference for providers and patients around the world.

1. Boston Scientific case study, Performance Optimisation, Tampere University Hospital, Cardio Rhythm Lab Continuous Improvement Programme, Boston Scientific, 2015

Thermo Fisher acquires Patheon for $7.2bn

May 16 saw Thermo Fisher, the world’s largest manufacturer of scientific instruments, acquire drug ingredients maker Patheon for $7.2bn, including $2bn debt. Since the companies’ customers overlap, the move could boost Thermo Fisher’s sales as it offers more holistic solutions and products.

The news caused Patheon shares to jump 33 percent and Thermo Fisher’s to rise by 0.5 percent. Thermo Fisher expects $120m of synergies by 2021, which includes $90m of savings.

“Patheon’s development and manufacturing capabilities are an excellent complement to our industry-leading offering for the biopharma market”, said Marc Casper, CEO of Thermo Fisher. “Patheon’s commitment to quality and service excellence is directly aligned with our focus on helping our biopharma customers accelerate innovation and drive productivity.”

The news caused Patheon shares to jump 33 percent and Thermo Fisher’s to rise by 0.5 percent

Recently, Thermo Fisher has been on a spending spree, buying Affymetrix, a microarrays producer, for $1.3bn last March and FEI, a microscope manufacturer, for $4.2bn in September. In 2014, it also purchased DNA sequencer Life Technologies for $15bn. With its portfolio currently focused on equipment, research and analytics, the shift to drug manufacturing is a relatively unconventional step.

The incentive is that contract drug development is a lucrative, $40bn market that is presently expanding at five percent annually. Whereas Thermo Fisher used to be held back from this area due to the high cost of clinical trials, the acquisition of Patheon should allow it to take big, confident strides toward manufacturing.

This new direction is also a result of Thermo Fisher’s enthusiastic spending spree. Despite causing its shares to roughly triple in value over the past five years, the many buy-ups have also meant that there are fewer good companies left in Thermo Fisher’s regular fields of interest. As such, rather than purchase an overpriced or lower quality firm, Thermo Fisher chose new frontiers with Patheon.

Drug manufacturing is a relatively open field, with its 10 biggest companies constituting just 35 percent of the market. As such, there is plenty of room for further expansion, and regulatory hurdles should be surmountable as Thermo Fisher moves to close the Patheon deal by the end of the year.

London-based virtual reality start-up receives $502m investment

On May 12, London-based start-up Improbable announced that it had raised $502m in a Series B funding round led by Japanese technology conglomerate Softbank. This makes Improbable, which has also received investment from venture capital firms Horizons and Andreessen Horowitz, the newest addition to the small but growing group of UK technology ‘unicorns’ – start-ups that are valued at over $1bn.

Improbable specialises in making virtual reality and large-scale simulations. While start-ups focusing on automation or communications continue to dominate the media, investor interest in virtual reality has been steadily growing. Emerging start-ups have started to rival more established companies like Oculus VR. Just last February, MindMaze, based in Switzerland, became the first VR-focused start-up to achieve unicorn status.

While start-ups focusing on automation or communications continue to dominate the media, investor interest in virtual reality has been steadily growing

Founded by Cambridge computer science graduates Herman Narula and Rob Whitehead to build detailed computer gaming environments, Improbable’s ambitions have since widened. The company’s SpatialOS platform allows clients to build and operate large-scale simulations in the cloud, enabling them to build virtual environments of massive scale and complexity. One use for this is enabling multiplayer games, but another is to solve complex problems in the real world. Improbable aims to provide a framework for overcoming challenges in infrastructure or complex ecosystems by building detailed simulations of those systems. Clients already include the US and UK defence departments.

In a statement discussing the investment, CEO Narula said: “We intend to fully dedicate this investment to building our business and technology… we are working towards a future in which participatory virtual worlds and simulations of unimaginable scale become ubiquitous. We think this is potentially as exciting and important a technical development as work on AI or the Internet of Things.”

This is one of the biggest investments in an early stage European technology company, but despite the large investment Softbank has not gained a majority stake in the company, demonstrating the growth of the European technology sector. A report by Tech.EU found that European technology start-ups raised €16.2bn last year, the highest figure ever recorded. In a statement to the BBC, Narula said: “I’d like to see a British company – maybe us – get to the level where we could be a world-leading platform.”

Huge cyber-attack spreads worldwide

On May 12, a huge cyber-attack spread rapidly across the globe, crippling over 200,000 computers in 150 countries. The so-called WannaCry ransomware virus caused an error message to appear on users’ computer monitors, encrypting their files and locking them out of their machines. The virus threatened to destroy saved data unless a ransom of $300 was paid to the attackers in bitcoins.

The virus brought 47 trusts in the UK’s National Health Service to a standstill by making digitised patient records inaccessible. Meanwhile, over 2,000 computers were affected in Japan, along with 30,000 in China and 1,000 in Russia’s Interior Ministry. By May 15, other major victims included Deutsche Bahn in Germany, Renault in France, FedEx in the US and Telefonica in Spain. Symantec, a security company, urged computer users to update both their security software and operating systems, particularly on Windows, in anticipation of a second, stronger attack this week.

An anonymous security analyst blogging under the name MalwareTech was hailed as a hero when they managed to halt the spread of the virus

“The global reach is unprecedented. The latest count is over 200,000 victims in at least 150 countries, and those victims, many of those will be businesses, including large corporations”, said Europol Director Rob Wainwright on May 14. “At the moment, we are in the face of an escalating threat. The numbers are going up; I am worried about how the numbers will continue to grow when people go to work and turn on their machines on Monday morning.”

The virus was spread through a self-replicating worm. It affected Windows operating systems, prompting Microsoft to release a patch to defend against the threat. Just hours after the attack began, an anonymous security analyst blogging under the name MalwareTech was hailed as a hero when they managed to halt the spread of the virus ”completely by accident” after finding a kill switch. Even so, a new version of the virus, without the kill switch, emerged the next day.

“I’ve never seen anything like this with ransomware”, said MalwareTech. “The last worm of this degree that I can remember is Conficker.” Conficker was a Windows virus that became prolific in 2008, infecting nine million machines in 200 countries.

A group called the Shadow Brokers is believed to have played a role in the current attack, since it stole a cache of cyber weapons from the US Government and leaked it online last year. The WannaCry attack reportedly used a piece of NSA software called Eternal Blue that was stolen in that hack. On May 14, Brad Smith, Microsoft’s President and Chief Legal Officer, said: “The governments of the world should treat this attack as a wake-up call. We need governments to consider the damage to civilians that comes from hoarding these vulnerabilities and the use of these exploits. An equivalent scenario with conventional weapons would be the US military having some of its Tomahawk missiles stolen.”

Ransomware is usually very difficult to get rid of once it has taken control of a computer

The virus stipulates the $300 ransom to unlock the machine will double if it goes unpaid for three days after infection, and that files will be permanently deleted if seven days pass without payment. However, ransomware is usually very difficult to get rid of once it has taken control of a computer, and security experts are urging people not to pay the ransom as it may both waste their money and encourage similar ransomware attacks in future.

“A manual human operator must activate decryption”, said Matthew Hickey, a researcher at UK cybersecurity firm Hacker House. “I very much doubt anyone would return your contact request, bearing in mind the attention that is now on this.”

As such, if the claims made by the WannaCry bug are to be trusted, millions of user files around the world could be at risk of permanent deletion by next weekend. Users who have backed up their files may be able to restore them once their machines have been cleaned, but there is no way to guarantee any result given the uncertainty that accompanies these kinds of attacks.

 

Trump signs executive order to boost US cybersecurity

On May 11, US President Donald Trump signed an executive order to boost the country’s cyber defences in an effort to safeguard data and protect the economy. The order states that government agencies must install better safeguards on information that is held in their computer systems, and that new firewalls should be built around the nation’s critical infrastructure, such as power stations. It also requires federal agencies to adopt a centralised cloud-based framework that is designed by the National Institute of Standards and Technology (NIST) and tasks them with preparing a report on how this can be implemented.

The order was due to be signed on January 31, but was postponed without explanation. It represents the new President’s first major move on digital security, which has been a growing headache for administrators over the past few years in the wake of several huge attacks on flimsy government systems.

By placing the onus of security on the leaders of government agencies, the order may reduce buck-passing between department leaders and their IT staff when breaches occur

“Risk management decisions made by agency heads can affect the risk to the executive branch as a whole… effective risk management requires agency heads to lead integrated teams of senior executives with expertise in IT, security, budgeting, acquisition, law, privacy and human resources”, the order reads.

The new measures are firmer than previous efforts to combat cyber threats. By placing the onus of security on the leaders of government agencies, the order may reduce buck-passing between department leaders and their IT staff when breaches occur.

Although the Obama administration did make moves to boost the government’s resilience to attacks, public systems remain notoriously vulnerable. For example, in June 2015, the Office of Personnel Management disclosed that a year-long security breach had exposed 20 million personnel files to hackers. Under Obama, private firms were also encouraged to voluntarily join the NIST framework in order to bolster their defences, yet the uptake was disappointing. Trump’s new order keeps their membership voluntary, yet makes it mandatory for public agencies.

In part, the measures are a step towards safeguarding the US against attacks from malicious parties, such as last year’s huge DDoS attack that temporarily brought down internet services in parts of the country. More significantly, they are also designed to boost national security amid rising fears of foreign interference. Hostile foreign governments, most notably Russia and China, have long been engaged in cyber warfare against the US. Security agencies recently alleged that Russian hacking had influenced the outcome of the US election last year. As such, the order is part of a wider shift within the US Government to counteract this growing trend. On the same day as the order was introduced, the leaders of five intelligence departments, including the FBI, told the Senate Intelligence Committee that they were reviewing their use of Kaspersky Labs security software, citing a lack of trust in the Russian-made platform.

Sinclair buys Tribune Media for $3.9bn

The acquisition could see Sinclair dominate US local television airwaves
The acquisition could see Sinclair dominate US local television airwaves

On May 8, US television station owner Sinclair Broadcast Group announced its $3.9bn acquisition of fellow broadcaster Tribune Media, in a deal that makes the US’ biggest local television provider even larger. Sinclair, which already owns 173 stations including WGN in Chicago and WPIX in New York, will now expand its balance sheet with all 42 of Tribune’s stations, which currently operate in 33 markets across the US. The combined entity will cover 72 percent of the nation’s television households and generate $4.3bn in annual revenue.

The news prompted Tribune’s shares to rise five percent, while Sinclair’s fell by two. Sinclair will buy all of Tribune’s shares for $43.50 each and will acquire $2.9bn of debt on top of the $3.9bn sale price. The deal is expected to close by the end of 2017.

Competition between broadcasters may be seriously curtailed by the sheer size of the new company under Sinclair

“This is a transformational acquisition for Sinclair that will open up a myriad of opportunities for the company”, said Chris Ripley, Sinclair’s President and CEO. “The Tribune stations are highly complementary to Sinclair’s existing footprint and will create a leading nationwide media platform that includes our country’s largest markets.”

The deal comes less than three weeks after the US Federal Communications Commission (FCC) voted to reverse a 2016 decision to limit the number of stations that broadcasting companies could purchase. Ajit Pai, the new FCC chairman who was appointed by US President Donald Trump earlier this year, subsequently announced plans to review an existing federal law that prevents broadcasting companies from expanding their service to more than 39 percent of US television households.

Even though Sinclair’s coverage will, in reality, exceed that federal cap by a factor of two, the new rules that were agreed by the FCC in April entail that regulators will not count most of those households. As such, Sinclair’s coverage will technically fall below the 39 percent limit, meaning it stands a chance of gaining regulatory approval in the coming months.

Even so, competition between broadcasters may be seriously curtailed by the sheer size of the new company under Sinclair. The proposed entity will decisively outpace its closest rival, Nexstar Media Group, which owns just 170 stations nationwide.

“The acquisition will enable Sinclair to build ATSC 3.0 (Next Generation Broadcast Platform) advanced services, scale emerging networks and national sales, and integrate content verticals”, Ripley said. “The acquisition will also create substantial synergistic value through operating efficiencies, revenue streams, programming strategies and digital platforms.”

Meanwhile, the deal effectively puts to an end a decade of turbulence for Tribune. The Chicago-based media company hit problems after being acquired by billionaire mogul Sam Zell. It emerged from bankruptcy in 2012 and was acquired from Zell by private equity firms, eventually selling off its historic newspaper assets in 2014 in order to stabilise.

Sinclair has seen healthy expansion in recent years, having moved into wireless technology via a collaboration deal with Nexstar earlier this year. The companies’ wireless offerings together span 86 percent of the US.

Amazon to build new research hub in Cambridge

Delivery drones are a major research area for Amazon, with the UK one of the destinations of focus for the project
Delivery drones are a major research area for Amazon, with the UK one of the destinations of focus for the project

On May 4, online retailer Amazon announced plans to build a 60,000 sq ft research facility in Cambridge to develop cutting-edge technologies such as web services, video streaming and artificial intelligence. The facility will employ 400 highly skilled workers and will help the company to reach its goal of hiring 5,000 UK staff in 2017. The development centre will open in autumn in the city’s business district.

Staff will include mathematical modellers, data scientists, speech scientists and knowledge engineers. They will work on various existing projects, including Kindle, Echo, Fire TV and the Alexa voice assistant. With these transferred to the new site, Amazon’s existing research base in Cambridge, at Castle Hill, will switch its focus to developing the Prime Air drone delivery service, which achieved its first ever shipment in December and has been advancing rapidly ever since.

Boosting R&D in machine learning and AI will be crucial in keeping Amazon’s Alexa voice assistant competitive

“We are constantly inventing on behalf of our customers, and our development centres in Cambridge, Edinburgh and London play a major role in Amazon’s global innovation story”, said Doug Gurr, Amazon’s UK Country Manager. “By the end of this year, we will have more than 1,500 innovation related roles here in Britain.”

Boosting R&D in machine learning and AI will be crucial in keeping Amazon’s Alexa voice assistant competitive. Rivals, including Google Home and Apple’s Siri, recognise users’ speech patterns and can also be used for searching the internet. As one of the world’s biggest retailers, Amazon is eager to mesh Alexa with its digital shopping department to streamline the purchasing process. Developing this technology in the UK rather than the US is important because it allows developers to add localised touches that UK consumers will appreciate, thereby furthering Amazon’s goal of making Alexa “a more natural voice experience”.

Meanwhile, with an expansion of the Prime Air facility, Amazon could be readying the UK to become the frontline for its development of ‘airborne fulfilment centres’ (AFCs), an idea that the company patented in December. AFCs are massive airborne warehouses modelled on conventional airships that will, Amazon hopes, hover above cities and deliver goods via small shuttle drones.

“The UK is very well placed for developing [drone] technology”, explained Dr Jonathan Aitken, a drone researcher at the University of Sheffield. “We are substantially less restrictive than the FAA in the US. That’s one of the reasons why Amazon has come to the UK to do their research. The Drone Action Group within the Department for Transport are very actively promoting drones for doing business within the UK and the Civil Aviation Authority is part of that.”

In February, Amazon announced plans to expand its UK workforce from 19,000 to 24,000 by the end of the year. Most of this growth will come from new warehouses rather than development centres such as the one in Cambridge. That said, the new investment is a boost for high-skilled UK jobs, which have been a cause for concern over the past several months in light of the developing Brexit process. In this regard, technology companies like Amazon have been among the most comfortable when it comes to investing in British innovation and research.