What does Meta/Facebook’s favorite new phrase to bandy around in awkward earnings calls — as it warns of “regulatory headwinds” cutting into its future growth — actually mean when you unpack it?

It’s starting to look like this breezy wording means the law is finally catching up with murky adtech practices which have been operating under the radar for years — tracking and profiling web users without their knowledge or consent, and using that surveillance-gleaned intel to manipulate and exploit at scale regardless of individual objections or the privacy people have a legal right to expect.

This week a major decision in Europe found that a flagship ad industry tool which — since April 2018 — has claimed to be gathering people’s “consent” for tracking to run behavioral advertising has not in fact been doing so lawfully.

The IAB Europe was given two months to come up with a reform plan for its erroneously named Transparency and Consent Framework (TCF) — and a hard deadline of six months to clean up the associated parade of bogus pop-ups and consent mismanagement which force, manipulate or simply steal (“legitimate interest”) web users’ permission to microtarget them with ads.

The implications of the decision against the IAB and its TCF are that major ad industry reforms must come — and fast.

This is not just a little sail realignment as Facebook’s investor-soothing phrase suggests. And investors are perhaps cottoning on to the scale of the challenges facing the adtech giant’s business — given the 20% drop in its share price as it reported Q4 earnings this week.

Facebook’s ad business is certainly heavily exposed to any regulatory hurricane of enforcement against permission-less Internet tracking since it doesn’t offer its own users any opt out from behavioral targeting.

When asked about this the tech giant typically points to its “data policies” — where it instructs users it will track them and use their data for personalized ads but doesn’t actually ask for their permission. (It also claims any user data it sucks into its platform from third parties for ad targeting has been lawfully gathered by those partners in one long chain of immaculate adtech compliance!)

Fb also typically points to some very limited “controls” it provides users over the type of personalized ads they will be exposed to via its ad tools — instead of actually giving people genuine control over what’s done with their information which would, y’know, actually enable them to protect their privacy.

The problem is Meta can’t offer people a choice over what it does with their data because people’s data is the fuel that its ad targeting empire runs on.

Indeed, in Europe — where people do have a legal right to privacy — the adtech giant claims users of its social media services are actually in a contract with it to receive advertising! An argument that the majority of the EU’s data protection agencies look minded to laugh right out of the room, per documents revealed last year by local privacy advocacy group noyb which has been filing complaints about Facebook’s practices for years. So watch that space for thunderous regulatory “headwinds”.

(noyb’s founder, Max Schrems, is also the driving force behind another Meta earnings call caveat, vis-a-vis the little matter of “the viability of transatlantic data transfers and their potential impact on our European operations“, as its CFO Dave Wehner put it. That knotty issue may actually require Meta to federate its entire service if, as expected, an order comes to stop transferring EU users’ data over the pond, with all the operational cost and complexity that would entail… So that’s quite another stormy breeze on the horizon.)

While regulatory enforcement in Europe against adtech has been a very slow burn there is now movement that could create momentum for a cleansing reboot.

For one thing, given the interconnectedness of the tracking industry, a decision against a strategic component like the TCF (or indeed adtech kingpin Facebook) has implications for scores of data players and publishers who are plugged into this ecosystem. So knock-on effects will rattle down (and up) the entire adtech ‘value chain’. Which could create the sort of tipping point of mass disruption and flux that enables a whole system to flip to a new alignment. 

European legislators frustrated at the lack of enforcement are also piling further pressure on by backing limits on behavioral advertising being explicitly written into new digital rules that are fast coming down the pipe — making the case for contextual ad targeting to replace tracking. So the demands for privacy are getting louder, not going away.

Of course Meta/Facebook is not alone in being especially prone to regulatory headwinds; the other half of the adtech duopoly — Alphabet/Google — is also heavily exposed here.

As Bloomberg reported this week, digital advertising accounts for 98% of Meta’s revenue, and a still very chunky 81% of Alphabet’s — meaning the pair are especially sensitive to any regulatory reset to how ad data flows.

Bloomberg suggested the two giants may yet have a few more years’ grace before regulatory enforcement and increased competition could bite into their non-diversified ad businesses in a way that flips the fortunes of these data-fuelled growth engines.

But one factor that has the potential to accelerate that timeline is increased transparency.

Follow the data…

Even the most complex data trail leaves a trace. Adtech’s approach to staying under the radar has also, historically, been more one of hiding its people-tracking ops in plain sight all over the mainstream web vs robustly encrypting everything it does. (Likely as a result of how tracking grew on top of and sprawled all over web infrastructure at a time when regulators were even less interested in figuring out what was going on.)

Turns out, pulling on these threads can draw out a very revealing picture — as a comprehensive piece of research into digital profiling in the gambling industry, carried out by researcher Cracked Labs and just published last week, shows.

The report was commissioned by UK based gambling reform advocacy group, Clean Up Gambling, and quickly got picked up by the Daily Mail — in a report headlined: “Suicidal gambling addict groomed by Sky Bet to keep him hooked, investigation reveals”.

What Cracked Labs’ research report details — in unprecedented detail — is the scale and speed of the tracking which underlies an obviously non-compliant cookie banner presented to users of a number of gambling sites whose data flows it analyzed, offering the usual adtech fig-leaf mockery of (‘Accept-only’) compliance.

The report also explodes the notion that individuals being subject to this kind of pervasive, background surveillance could practically exercise their data rights.

Firstly, the effort asymmetry that would be required to go SARing such a long string of third parties is just ridiculous. But, more basically, the lack of transparency inherent to this kind of tracking means it’s inherently unclear who has been passed (or otherwise obtained) your information — so how can you ask what’s being done if you don’t even know who’s doing it?

If that is a system ‘functioning’ then it’s clear evidence of systemic dysfunction. Aka, the systemic lawlessness that the UK’s own data protection regulator already warned the adtech industry in a report of its own all the way back in 2019.

The individual impact of adtech’s “data-driven” marketing, meanwhile, is writ large in a quote in the Daily Mail’s report — from one of the “high value” gamblers the study worked with, who accuses the gambling service in question of turning him into an addict — and tells the newspaper: “It got to a point where if I didn’t stop, it was going to kill me. I had suicidal ideation. I feel violated. I should have been protected.”

“It was going to kill me” is an exceptionally understandable articulation of data-driven harms.

Here’s a brief overview of the scale of tracking Cracked Lab’s analysis unearthed, clipped from the executive summary:

“The investigation shows that gambling platforms do not operate in a silo. Rather, gambling platforms operate in conjunction with a wider network of third parties. The investigation shows that even limited browsing of 37 visits to gambling websites led to 2,154 data transmissions to 83 domains controlled by 44 different companies that range from well-known platforms like Facebook and Google to lesser known surveillance technology companies like Signal and Iovation, enabling these actors to embed imperceptible monitoring software during a user’s browsing experience. The investigation further shows that a number of these third-party companies receive behavioural data from gambling platforms in realtime, including information on how often individuals gambled, how much they were spending, and their value to the company if they returned to gambling after lapsing.”

A detailed picture of consentless ad tracking in a context with very clear and well understood links to harm (gambling) should be exceedingly hard for regulators to ignore.

But any enforcement of consent and privacy must and will be universal, as the law around personal data is clear.

Which in turn means that nothing short of a systemic adtech reboot will do. Root and branch reform.

Asked for its response to the Cracked Labs research, a spokeswoman for the UK’s Information Commissioner’s Office (ICO) told TechCrunch: “In relation to the report from the Clean Up Gambling campaign, I can confirm we are aware of it and we will consider its findings in light of our ongoing work in this area.”

We also asked the ICO why it has failed to take any enforcement action against the adtech industry’s systemic abuse of personal data in real-time bidding ad auctions — following the complaint it received in September 2018, and the issues raised in its own report in 2019.

The watchdog said that after it resumed its “work” in this area — following a pause during the coronavirus pandemic — it has issued “assessment notices” to six organisations. (It did not name these entities.)

“We are currently assessing the outcomes of our audit work. We have also been reviewing the use of cookies and similar technologies of a number of organisations,” the spokeswoman also said, adding: “Our work in this area is vast and complex. We are committed to publishing our final findings once our enquiries are concluded.”

But the ICO’s spokeswoman also pointed to a recent opinion issued by the former information commissioner before she left office last year, in which she urged the industry to reform — warning adtech of the need to purge current practices by moving away from tracking and profiling, cleaning up bogus consent claims and focusing on engineering privacy and data protection into whatever for of targeting it flips to next.

So the reform message at least is strong and clear, even if the UK regulator hasn’t found enough puff to crack out any enforcement yet.

Asked for its response to Cracked Labs’ findings, Flutter — the US-based company that owns Sky Betting & Gaming, the operator of the gambling sites whose data flows the research study tracked and analyzed — sought to deflect blame onto the numerous third parties whose tracking technologies are embedded in its websites (and only referenced generically, not by name, in its ‘Accept & close’ cookie notice).

So that potentially means onto companies like Facebook and Google.

“Protecting our customers’ personal data is of paramount importance to Sky Betting & Gaming, and we expect the same levels of care and vigilance from all of our partners and suppliers,” said the Sky Bet spokesperson.

“The Cracked Labs report references data from both Sky Betting & Gaming and the third parties that we work with. In most cases, we are not — and would never be — privy to the data collected by these parties in order to provide their services,” they added. “Sky Betting & Gaming takes its safer gambling responsibilities very seriously and, while we run marketing campaigns based on our customers’ expressed preferences and behaviours, we would never seek to intentionally advertise to anyone who may potentially be at risk of gambling harm.”

Regulatory inaction in the face of cynical industry buck passing — whereby a first party platform may seek to deny responsibility for tracking carried out by its partners, while third parties which also got data may claim its the publishers’ responsibility to obtain permission — can mire complaints and legal challenges to adtech’s current methods in frustrating circularity.

But this tedious dance should also be running out of floor. A number of rulings by Europe’s top court in recent years have sharpened guidance on exactly these sorts of legal liability issues, for example.

Moreover, as we get a better picture of how the adtech ecosystem ‘functions’ — thanks to forensic research work like this to track and map the tracking industry’s consentless data flows — pressure on regulators to tackle such obvious abuse will only amplify as it becomes increasingly easy to link abusive targeting to tangible harms, whether to vulnerable individuals with ‘sensitive’ interests like gambling; or more broadly — say in relation to tracking that’s being used as a lever for illegal discrimination (racial, sexual, age-based etc), or the democratic threats posed by population scale targeted disinformation which we’ve seen being deployed to try to skew and game elections for years now.

Google and Facebook respond

TechCrunch contacted a number of the third parties listed in the report as receiving behavioral data on the activities of one of the users of the Sky Betting sites a large number of times — to ask them about the legal basis and purposes for the processing — which included seeking comment from Facebook, Google and Microsoft.

Facebook and Google are of course huge players in the online advertising market but Microsoft appears to have ambitions to expand its advertising business. And recently it acquired another of the adtech entities that’s also listed as receiving user data in the report — namely Xandr (formerly AppNexus) — which increases its exposure to these particular gambling-related data flows.

(NB: the full list of companies receiving data on Sky Betting users also includes TechCrunch’s parent entity Verizon Media/Yahoo, along with tens of other companies, but we directed questions to the entities the report named as receiving “detailed behavioral data” and which were found receiving data the highest number of times*, which Cracked Labs suggests points to “extensive behavioural profiling”; although it also caveats its observation with the important point that: “A single request to a host operated by a third-party company that transmits wide-ranging information can also enable problematic data practices”; so just because data was sent fewer times doesn’t necessarily mean it is less significant.)

Of the third parties we contacted, at the time of writing only Google had provided an on-the-record comment.

Microsoft declined to comment.

Facebook provided some background information — pointing to its data and ad policies and referring to the partial user controls it offers around ads. It also confirmed that its ad policies do permit gambling as an targetable interest with what it described as “appropriate” permissions.

Meta/Facebook announced some changes to its ad platform last November — when it expanded what it refers to as its “Ad topic controls” to cover some “sensitive” topics — and it confirmed that gambling is included as a topic people can choose to see fewer ads with related content on.

But note that’s fewer gambling ads, not no gambling ads.

So, in short, Facebook admitted it uses behavioral data inferred from gambling sites for ad targeting — and confirmed that it doesn’t give users any way to completely stop that kind of targeting — nor, indeed, the ability to opt out from tracking-based advertising altogether.

While its legal basis for this tracking is — we must infer — its claim that users are in a contract with it to receive advertising.

Which will probably be news to a lot of users of Meta’s “family of apps”. But it’s certainly an interesting detail to ponder alongside the flat growth it just reported in Q4.

Google’s response did not address any of our questions in any detail, either.

Instead it sent a statement, attributed to a spokesperson, in which it claims it does not use gambling data for profiling — and further asserts it has “strict policies” in place that prevent advertisers from using this data.

Here’s what Google told us:

“Google does not build advertising profiles from sensitive data like gambling, and has strict policies preventing advertisers from using such data to serve personalised ads. Additionally, tags for our ad services are never allowed to transmit personally identifiable information to Google.”

Google’s statement does not specify the legal basis it is relying upon for processing sensitive gambling data in the first place. Nor — if it really isn’t using this data for profiling or ad targeting — why it’s receiving it at all.

We pressed Google on these points but the company did not respond to follow up questions.

Its statement also contains misdirection that’s typical of the adtech industry — when it writes that its tracking technologies “are never allowed to transmit personally identifiable information”.

Setting aside the obvious legalistic caveat — Google doesn’t actually state that it never gets PII; it just says its tags are “never allowed to transmit” PII; ergo it’s not ruling out the possibility of a buggy implementation leaking PII to it — the tech giant’s use of the American legal term “personally identifiable information” is entirely irrelevant in a European legal context.

The law that actually applies here concerns the processing of personal data — and personal data under EU/UK law is very broadly defined, covering not just obvious identifiers (like name or email address) but all sorts of data that can be connected to and used to identify a natural person, from IP address and advertising IDs to a person’s location or their device data and plenty more besides.

In order to process any such personal data Google needs a valid legal basis. And since Google did not respond to our questions about this it’s not clear what legal basis it relies upon for processing the Sky Betting user’s behavioral data.

“When data subject 2 asked Sky Betting & Gaming what personal data they process about them, they did not disclose information about personal data processing activities by Google. And yet, this is what we found in the technical tests,” says research report author Wolfie Christl, when asked for his response to Google’s statement.

“We observed Google receiving extensive personal data associated with gambling activities during visits to skycasino.com, including the time and exact amount of cash deposits.

“We did not find or claim that Google received ‘personally identifiable’ data, this is a distraction,” he adds. “But Google received personal data as defined in the GDPR, because it processed unique pseudonymous identifiers referring to data subject 2. In addition, Google even received the customer ID that Sky Betting & Gaming assigned to data subject 2 during user registration.

“Because Sky Betting & Gaming did not disclose information about personal data processing by Google, we cannot know how Google, SBG or others may have used personal data Google received during visits to skycasino.com.”

“Without technical tests in the browser, we wouldn’t even know that Google received personal data,” he added.

Christl is critical of Sky Betting for failing to disclose Google’s personal data processing or the purposes it processed data for.

But he also queries why Google received this data at all and what it did with it — zeroing in on another potential obfuscation in its statement.

“Google claims that it does not ‘build advertising profiles from sensitive data like gambling’. Did it build advertising profiles from personal data received during visits to skycasino.com or not? If not, did Google use personal data received from Sky Betting & Gaming for other kinds of profiling?”

Christl’s report includes a screengrab showing the cookie banner Sky Betting uses to force consent on its sites — by presenting users with a short statement at the bottom of the website, containing barely legible small print and which bundles information on multiple uses of cookies (including for partner advertising), next to a single, brilliantly illuminated button to “accept and close” — meaning users have no choice to deny tracking (short of not gambling/using the website at all).

Under EU/UK law, if consent is being relied upon as a legal basis to process personal data it must be informed, specific and freely given to be lawfully obtained. Or, put another way, you must actually offer users a genuine choice to accept or deny — and do so for each use of non-essential (i.e. non-tracking) cookies.

Moreover if the personal data in question is sensitive personal data — and behavioral data linked to gambling could certainly be that, given gambling addiction is a recognized health condition, and health data is classed as “special category personal data” under the law — there is a higher standard of explicit consent required, meaning a user would need to affirm every use of this type of highly sensitive information.

Yet, as the report shows, what actually happened in the case of the users whose visits to these gambling sites were analyzed was that their personal data was tracked and transmitted to at least 44 third party companies hundreds of times over the course of just 37 visits to the websites.

They did not report being asked explicitly for their consent as this tracking was going on. Yet their data kept flowing.

It’s clear that the adtech industry’s response to the tightening of European data protection law since 2018 has been the opposite of reform. It opted for compliance theatre — designing and deploying cynical cookie pop-ups that offer no genuine choice or at best create confusion and friction around opt-outs to drum up consent fatigue and push consumers to give in and ‘agree’ to give over their data so it can keep tracking and profiling.

Legally that should not have been possible of course. If the law was being properly enforced this cynical consent pantomime would have been kicked into touch long ago — so the starkest failure here is regulatory inaction against systemic law breaking.

That failure has left vulnerable web users to be preyed upon by dark pattern design, rampant tracking and profiling, automation and big data analytics and “data-driven” marketers who are plugging into an ecosystem that’s been designed and engineered to quantify individuals’ “value” to all sorts of advertisers — regardless of individuals’ rights and freedoms not to be subject to this kind of manipulation and laws that were intended to protect their privacy by default.

By making Subject Access Requests (SARs), the two data subjects in the report were able to uncover some examples of attributes being attached to profiles of Sky Betting site users — apparently based on inferences made by third parties off of the behavioral data gathered on them — which included things like an overall customer “value” score and product specific “value bands”, and a “winback margin” (aka a “predictive model for how much a customer would be worth if they returned over next 12 months”).

This level of granular, behavioral background surveillance enables advertising and gaming platforms to show gamblers personalized marketing messages and other custom incentives tightly designed to encourage them return to play — to maximize engagement and boost profits.

But at what cost to the individuals involved? Both literally, financially, and to their health and wellbeing — and to their fundamental rights and freedoms?

As the report notes, gambling can be addictive — and can lead to a gambling disorder. But the real-time monitoring of addictive behaviours and gaming “predilections” — which the report’s technical analysis lays out in high dimension detail — looks very much like a system that’s been designed to automate the identification and exploitation of people’s vulnerabilities.

How this can happen in a region with laws intended to prevent this kind of systematic abuse through data misuse is an epic scandal.

While the risks around gambling are clear, the same system of tracking and profiling is of course being systematically applied to websites of all sorts and stripes — whether it contains health information, political news, advice for new parents and so on — where all sorts of other manipulation and exploitation risks can come into play. So what’s going on on a couple of gambling sites is just the tip of the data-mining iceberg.

While regulatory enforcement should have put a stop to abusive targeting in the EU years ago, there is finally movement on this front — with the Belgian DPA’s decision against the IAB Europe’s TCF this week.

However where the UK might go on this front is rather more murky — as the government has been consulting on wide-ranging post-Brexit changes to domestic DP law, and specifically on the issue of consent to data processing, which could end up lowering the level of protection for people’s data and legitimizing the whole rotten system.

Asked about the ICO’s continued inaction on adtech, Rai Naik — a legal director of the data rights agency AWO, which supported the Cracked Labs research, and who has also been personally involved in long running litigation against adtech in the UK — said: “The report and our case work does raise questions about the ICO’s inaction to date. The gambling industry shows the propensity for real world harms from data.”

“The ICO should act proactively to protect individual rights,” he added.

A key part of the reason for Europe’s slow enforcement against adtech is undoubtedly the lack of transparency and obfuscating complexity the industry has used to cloak how it operates so people cannot understand what is being done with their data.

If you can’t see it, how can you object to it? And if there are relatively few voices calling out a problem, regulators (and indeed lawmakers) are less likely to direct their very limited resource at stuff that may seem to be humming along like business as usual — perhaps especially if these practices scale across a whole sector, from small players to tech giants.

But the obfuscating darkness of adtech’s earlier years is long gone — and the disinfecting sunlight is starting to flood in.

Last December the European Commission explicitly warned adtech giants over the use of cynical legal tricks to evade GDPR compliance — at the same time as putting the bloc’s regulators on notice to crack on with enforcement or face having their decentralized powers to order reform taken away.

So, by hook or by crook, those purifying privacy headwinds gonna blow.

*Per the report: “Among the third-party companies who received the greatest number of network requests while visiting skycasino.com, skybet.com, and skyvegas.com, are Adobe (499), Signal (401), Facebook (358), Google (240), Qubit (129), MediaMath (77), Microsoft (71), Ve Interactive (48), Iovation (28) and Xandr (22).”

It’s kind of a broken record at this point, but the cloud infrastructure market continues to grow at an astonishing rate. Over the last year, it added almost $50 billion in business, growing from $129 billion in 2020 to $178 billion last year, according to Synergy Research data. Canalys reports similar numbers.

As for the quarter, Synergy reports the market reached $50 billion, up 36% over the prior year. The big three — Amazon, Microsoft and Google — continue to grow at a remarkable rate, even as the market matures, taking advantage of that growth with their market strength.

Microsoft and Google are growing faster at similar rates, around 45% for the quarter, while Amazon is growing at just under 40%. The quarterly revenue numbers worked out to around $17 billion for Amazon, $10 billion for Microsoft and $5 billion for Google, all healthy and growing businesses.

The market breakdown by percentage hasn’t changed a ton over the last year, with Amazon leading the way with 33%, followed by Microsoft with 21% and Google with 10%. It’s worth noting that Amazon’s market share has been stubbornly persistent for several years, while Google and Microsoft continue to grow steadily over time, but of course, the market continues to expand and Amazon revenue continues to grow at a decent rate.

In fact, Synergy reports that Microsoft, which was at just 11% share 4.5 years ago, has doubled its position in 18 quarters, an impressive rise. Synergy principal analyst John Dinsdale said that he isn’t too concerned, though, that Amazon’s position hasn’t changed in a while. He calls it a nice problem to have.

“Well, controlling a third of a huge and rapidly growing market is a very nice ‘rut’ to be in,” Dinsdale said. And while he isn’t about to predict the future, he noted it’s hard to keep growing consistently at a rapid rate.

“As a matter of principle, we never project or comment on likely future market share performance — that’s a rubicon that analysts like us should never cross. I will say that math is a powerful force, and the bigger you are, the more difficult it is to maintain aggressive growth. That is just a fact of (corporate) life.”

Image Credits: Synergy Research

Canalys data was pretty darn close to Synergy’s, with the firm reporting just over $53 billion for the quarter, up 34%. For the year, Canalys set the market at $191.7 billion, up 35% year over year from $142 billion in 2020.

For the quarter, it broke down as Amazon with 33%, Microsoft with 22% and Google with 9%. Again, these numbers are close enough to Synergy’s to call it a draw. Both define the market similarly, so it shouldn’t come as a huge surprise.

Canalys looks at service and platform as a service, either on dedicated hosted private infrastructure or shared infrastructure. For Synergy, it’s infrastructure and platform services. Both companies leave out SaaS, which is counted as a separate category.

The fact is that the market continues to grow at a rapid rate, and if analysts and prognosticators are correct, there is still a ton of room for growth in the cloud. We’re certainly seeing that quarter after quarter in recent years, as the largest players, in particular, reap the benefits of this growth with gaudy revenue numbers.

Even at the bottom of the market, there is still plenty of money to be made. While it might not meet the level of Microsoft, Amazon or Google, it can still add up to multibillion-dollar businesses. Chances are, in the coming years,we will continue to see continuing rapid growth. When we reach a point where we don’t, that’ll be the “man bites dog” news event.

More than 80% of the world’s workforce, some 2.7 billion people, do not spend their days in front of computers, and that has led to a strong disparity when it comes to technology, with some 1% of IT investment targeting them as users. That’s been changing very rapidly with the rise of smartphones and apps, and today, one of the startups that’s seen its business boom as a result of that trend is announcing some funding to jump on the opportunity.

Flip, which makes a communications app for frontline workers to chat with each other, to get communications from management, and to carry out HR activities like swapping shifts, has raised $30 million. The startup — based out of Stuttgart, Germany, and used primarily in the German-speaking DACH region — will be using the funding to break into new markets, starting with the UK, CEO and founder Benedikt Ilg said.

Notion Ventures and Berlin-based fund HV Capital are co-leading the round, with previous backers Cavalry Ventures and LEA Partners, along with individual backers including Volkswagen chairman Matthias Müller and many others.

There are a number of other apps in the market targeting the same sector of the world’s workforce, and the same use case around communications: they include Workplace from Meta, Teams from Microsoft, Crew (now owned by Square), Blink, Yoobic, When I Work, Workstream, and many more.

But there are three things to be said about what looks like a crowded field. First, it’s a big and fragmented enough market that there will likely be several strong players in the mix for the long haul. Second, there are still a number of ways that each player might evolve and innovate as the market is still fairly new. (One area that has been notable for Flip, Ilg said, is that his app is strictly compliant with GDPR rules, which has helped it win business over others that might claim that they are too, but are in fact not.) Another area is even more basic: making the app easy to use, not just in terms of user interface and experience but actual app size, the space it takes up on one’s phone and the bandwidth it needs to be used.

“I worked in production at Porche before starting Flip, and I know how it feels, the lack of communication with management,” Ilg said. “We are the most simple application in the field, when it comes to downloading and using it, with the least amount of screens. This is the spirit of what we want to build, doing things for end users.”

And third, if critical mass is important for success, Flip is actually leaping out into the front.

Flip to date has amassed 200 customers, spanning some 1 million users, with the list including McDonald’s, Rossmann, Edeka, Magna, and Mahle. In the pandemic — a moment where frontline workers suddenly did appear front and center in people’s consciousness — its revenues have boomed, shooting up six-fold in the last year, Ilg told me. (The startup is not disclosing actual revenue nor valuation.)

For those following the space, you might have noticed a story we wrote the other week about how Workplace had been hoping to announce McDonalds as a customer but had held off. Flip’s engagement with the company currently totals some 60,000 people. Given that the fast food giant is already working, publicly, with Flip… it will be interesting to see how the Workplace deal pans out. In any case, it underscores just how much there is left to play for here.

The app today is primarily used by employers to communicate to their wider base of employees, people who move around during the day and typically will not be working in a single location. Those people also use the app to communicate with each other, mainly for productivity purposes: to swap shifts or check a payslip, but not to carry out functions directly related to their work. This is an area where rivals like Yoobic have been building features, and Ilg said that Flip is also starting to look at how it might, too.

“Flip offers a chance for every deskless employee to truly participate in their own company’s communication process. There is huge potential in actively integrating these employees. We look forward to supporting Flip with our expertise and experience as it expands in the English-speaking market,” said Jos White of Notion Ventures in a statement.

Video is the beating heart of the most popular content online these days, and it’s not just because it’s entertaining. It’s also because of how accessible it is: it’s become incredibly easy for anyone, whether you’re technical or not, to make, post or watch video. Today, a London-based startup called Veed that’s built an online-only, web-based platform for all those video creators to edit and publish their work is announcing $35 million in funding to double down on strong demand.

The funding is coming from a single investor, Sequoia, and this is Veed’s first outside money since starting out as a bootstrapped business in 2018.

Sequoia has picked a promising horse in the startup race. Veed currently has 1 million users and annual recurring revenues of $7 million, a figure that is growing quickly: ARR was $6 million just two months ago. Veed is sold as a freemium product — “tens of thousands” pay for the service, CEO Sabba Keynejad told me — and it is profitable.

Veed started with basic cutting/cropping/merging editing tools, but today it covers a really wide range of other features that speak to the many ways video is used today: they include the ability to add in music or other media and manipulate the sound; create video effects; subtitles; and a range of editing tools optimised for specific platforms like YouTube; along with enterprise video features such as screen and webcam recording and creating teleprompter text.

Veed will use the funding in part to grow that list with features that will see it lean into content distribution: it plans to add live streaming and hosting tools next.

Video has been an online juggernaut for a while now, with its magnetic pull played out through premium streaming services, user-generated content platforms like YouTube, TikTok, and Instagram, through advertising, and more. Cisco estimates that in 2021, video accounted for 82% of all online traffic.

Video editing tools have gone hand-in-hand with that rise. There are dedicated apps for professional and casual desktop and mobile users, online platforms either specifically focused on video or part of bigger suites of creative tools, and tools embedded directly into social media apps, or offshoots of them, as well as tools available via other video services. Some like Picsart and Canva have raised substantial funding; others like ClipChamp are getting snapped up by bigger platforms (in its case, Microsoft) and getting incorporated into much larger, existing products.

So why does the world need another video platform?

It was a question that investors seemed to ask initially, too: Keynejad said the fact that Veed was bootstrapped until now was not because it wanted to build it that way. It was because he and co-founder Timur Mamedov — a computer scientist who tools around as a graffiti artist in his spare time; his work is the background of the picture illustrating this story — couldn’t raise any money. Their attempts to do so included applying and getting rejected from Y Combinator, multiple times. (The essay Keynejad wrote about their YC experience is funny and charming, worth a read.) And they couldn’t get on the same page with seed funds and angels, either.

However, Keynejad said he arrived at the business of building a video editing startup not strictly as a pragmatic entrepreneur looking for an interesting money-making gap in the market, but as someone working in the industry and finding that the available tools were lacking.

Keynejad studied design and interaction at Central St Martin’s in London and after that moved into a career putting that training to work at design studios, where he was required to do a lot with online video. As he recalls it, everything he encountered in the market to do his job was “clunky and complex.” This was not just about how to get to grips with using a particular package, or it having (or lacking as the case may be) a feature you would like to use, but also how the service existed in the modern world. If you collaborated with someone else, for example, many of the packages required users to transfer huge files to each other.

The non-intuitive nature of a lot of existing video tools was particularly acute, perhaps, for Keynejad himself.

He tells me that he grew up with significant dyslexia and was held back for three years trying to pass his English GCSE (one of a set of intense exams students have to take in year 11, aged 15/16, in England to progress to the next stage of school). But if he was conceiving of Veed for the toughest customer — himself — he was also building for a massive market, with an increasing amount of permutations of what online video online looked and what it ws intended to do.

“I just thought that the range and amount of video content we consume had outpaced the tools we had to make it,” he said.

So he got to making the first version of Veed, with the aim of making something that could be used by anyone, regardless of the video creator’s level of experience. Smart choice, given how online video has evolved as a genuinely democratized medium: you’re just as likely to come across highly produced, professional video as you are something from a regular Joe. Key to Veed was building it entirely online: if you collaborated with someone else, all you need to share your work was a URL.

“It’s a super broad set of use cases,” Keynejad said, noting that people have edited weddings, birthday videos, professional coaching sessions, internal communications, influencers doing their thing, and anything else you might brighten up with a ring light.

The funding will also be used to hire more people for Veed to build out the product further. In keeping with the times, Veed won’t be requiring people to work out of London, not least because its own leadership is not: Keynejad left The Smoke for Lisbon this week on a one-way ticket. He told me he plans to stay there for around a month, and then live the life of a digital nomad, working while hopping from city to city for at least five months — ideally hiring people as he moves along, he added.

Sequoia is an interesting VC to come in as a first investor in Veed.

After many years of backing startups in Europe from afar, the Silicon Valley-based venture capital icon set up shop in London in 2020 to take on more European investments in earnest. Partner Luciana Lixandru, who was poached from Accel, was a key hire for that effort, with a reputation for making prescient bets on startups and founders that others were overlooking. Keynejad said that conversations with Sequoia started some time back, after it started to pick up steam as a business, and felt like the natural choice as a first investor for the company.

“Just as we were early believers in YouTube, at Sequoia we believe Veed is the future of video,” Lixandru said over email. “Sabba, Timur and their team are building the next great platform in this ever expanding space. As artists themselves, they have a deep empathy for the creator community and in turn, creators really love their product. It’s incredible what they have achieved so far and we’re honored to be by their side for this next part of the journey.” 

Google’s public cloud has been chasing competing services from Amazon and Microsoft for so long, you might think it would be getting winded. But the critical Alphabet division keeps on keeping on, yesterday reporting revenues of more than $5.5 billion for the fourth quarter. That was the good news. The bad news was that Google Cloud accrued operating losses worth $890 million at the same time.

It may be hard to understand how a business with a run rate greater than $22 billion is losing money, but chief financial officer Ruth Porate explained it in the earnings call with analysts. It basically comes down to spending money to make money, while also competing with its much more successful rivals. (She refers to Google Cloud as simply Cloud here.)

“While Cloud operating loss and operating margin improved in 2021, we plan to continue to invest aggressively in Cloud given the sizable market opportunity we see. We do remain focused on the longer-term path to profitability and over time, operating loss and operating margin should benefit from increased scale,” she said per a call transcript.

Those investments are expensive and produce lumpy profit results. For example, while Google Cloud’s operating loss narrowed from Q4 2020 when it was over $1 billion, the final quarter of 2021 saw the group lose more money on an operating basis than it did in the sequentially preceding quarter, when the figure had declined to a more modest $644 million. Still a lot of money, but a smaller loss all the same.

It’s also worth remembering that while the progress that Google Cloud has made in revenue terms is impressive, the division still remains smaller than other Alphabet incomes. YouTube ads is a far larger business, for example, with $8.6 billion in Q4 revenues. Sadly, as Alphabet doesn’t break out YouTube profitability, it’s hard to directly compare the two.

Are ongoing losses an issue?

John Dinsdale, chief analyst at Synergy Research, a firm that keeps close tabs on the cloud industry market, says the loss isn’t worrisome at this stage.

“Google Cloud reporting a loss is not a big deal at all. Businesses of this nature require a lot of upfront investment and buildout of infrastructure and often don’t break even for several years,” he told TechCrunch.. “AWS made a loss for many years and was quite clear that it was making a conscious choice to plow cash being generated back into investing in t

Windows 11 is out. And with its sleek design and new features, it’s no wonder that so many people are considering upgrading. But should you switch to the newest Microsoft operating system (OS)? Here are some reasons why you may want to wait.

1. Your computer doesn’t meet Windows 11 minimum system requirements

One of the main reasons that can keep you from upgrading to Windows 11 is that your computer might not be able to run it. Windows 11’s system requirements are quite high: your computer needs 1 gigahertz (GHz) or faster with two or more cores on a compatible 64-bit processor or system on a chip (SoC). It also needs at least 4 gigabytes (GB) of RAM and 64 GB of available storage.

Although these standards aren’t extraordinary, a considerable number of users have outdated hardware that doesn’t meet Microsoft’s requirements for Windows 11. If you are one of them, you may need to purchase a new PC to get the latest OS.

2. Windows 11 has a lot of bugs

Windows 11 is still fresh out of the oven, and it’s far from being bug-free. Users have reported compatibility issues, missing notifications, and some built-in applications not opening or working as expected. The OS is still missing some features available in Windows 10, and issues are constantly being discovered and fixed, but these are to be expected of any newly released OS. So if you want to stick with a stable and reliable OS, it’s better to wait until Windows 11 is more mature.

3. You can’t access Android apps directly from Windows 11 (yet)

The Your Phone app currently lets Android phone users access mobile apps directly from their Windows 10 PC. This is an especially useful feature for remote and hybrid employees, as the ability to access phone apps on a larger desktop or laptop display and use a mouse, pen, or touchscreen helps with multitasking. If you are one of the people who rely on this feature, you’ll have to wait for the next Windows 11 update to get this functionality.

4. Windows 11 is very similar to Windows 10

Windows 11 wasn’t intended to be a new version of the OS. It was meant to be a substantial update to Windows 10, initially called the Sun Valley Update. That’s why save for a few features, many apps and functions look and work the same in Windows 11 as they do in Windows 10. So unless you’re looking for something radically different from what you have now, it may not be worth upgrading.

5. Microsoft will continue to support Windows 10 until 2025

If you are comfortable with your current setup and don’t have any urgent need to upgrade, you might as well stick with Windows 10. Microsoft has stated that it will continue to support the OS until October 14, 2025. This means that Windows 10 won’t become obsolete in the near future, so you can still enjoy bug fixes, security updates, and new features for this OS version for a few more years.

These are just some of the reasons why you may want to stick with Windows 10. If you decide that upgrading to Windows 11 is right for you, go ahead! But if not, there’s no need to worry — Windows 10 will still be here for a while. Either way, our experts can help you make the most out of your Windows setup. Give us a call today to learn more.

Windows 11 is the new kid on the block. It looks sleek and modern, and many users are tempted to upgrade to the latest Microsoft operating system (OS). But should you make the switch? Here are five reasons why you may want to stick with Windows 10 for now.

1. Your computer doesn’t meet Windows 11 minimum system requirements

One of the main reasons that can keep you from upgrading to Windows 11 is that your computer might not be able to run it. Windows 11’s system requirements are quite high: your computer needs 1 gigahertz (GHz) or faster with two or more cores on a compatible 64-bit processor or system on a chip (SoC). It also needs at least 4 gigabytes (GB) of RAM and 64 GB of available storage.

Although these standards aren’t extraordinary, a considerable number of users have outdated hardware that doesn’t meet Microsoft’s requirements for Windows 11. If you are one of them, you may need to purchase a new PC to get the latest OS.

2. Windows 11 has a lot of bugs

Windows 11 is still fresh out of the oven, and it’s far from being bug-free. Users have reported compatibility issues, missing notifications, and some built-in applications not opening or working as expected. The OS is still missing some features available in Windows 10, and issues are constantly being discovered and fixed, but these are to be expected of any newly released OS. So if you want to stick with a stable and reliable OS, it’s better to wait until Windows 11 is more mature.

3. You can’t access Android apps directly from Windows 11 (yet)

The Your Phone app currently lets Android phone users access mobile apps directly from their Windows 10 PC. This is an especially useful feature for remote and hybrid employees, as the ability to access phone apps on a larger desktop or laptop display and use a mouse, pen, or touchscreen helps with multitasking. If you are one of the people who rely on this feature, you’ll have to wait for the next Windows 11 update to get this functionality.

4. Windows 11 is very similar to Windows 10

Windows 11 wasn’t intended to be a new version of the OS. It was meant to be a substantial update to Windows 10, initially called the Sun Valley Update. That’s why save for a few features, many apps and functions look and work the same in Windows 11 as they do in Windows 10. So unless you’re looking for something radically different from what you have now, it may not be worth upgrading.

5. Microsoft will continue to support Windows 10 until 2025

If you are comfortable with your current setup and don’t have any urgent need to upgrade, you might as well stick with Windows 10. Microsoft has stated that it will continue to support the OS until October 14, 2025. This means that Windows 10 won’t become obsolete in the near future, so you can still enjoy bug fixes, security updates, and new features for this OS version for a few more years.

These are just some of the reasons why you may want to stick with Windows 10. If you decide that upgrading to Windows 11 is right for you, go ahead! But if not, there’s no need to worry — Windows 10 will still be here for a while. Either way, our experts can help you make the most out of your Windows setup. Give us a call today to learn more.

Private equity firms Vista Equity Partners and Evergreen Coast Capital have finally found a suitable match for Tibco: the firms will buy Citrix for $16.5 billion.

The deal, which represents a roughly 30% premium on Citrix’s value, aims to combine the two companies to create a legacy enterprise tech powerhouse. But will the combination produce something more useful for customers, or a conglomeration that doesn’t really fit well together?

Citrix is best known for its desktop virtualization products, and it’d be fair to presume it did pretty well when the pandemic hit and companies had to shift employees to remote work. Having the ability to deliver work desktops in one package to at-home workers would seem to be a good feature to have these past couple of years.

But it’s not been tearing up the scoreboard with growth recently. Its status as a public company gives us visibility into its financial performance (including its mediocre earnings report released today), and as we’ll see, its lackluster growth likely makes it more of a takeover target.

Citrix’s new partner Tibco provides tools and infrastructure to manage and analyze data. But it launched in 1997, and the analytics market has evolved dramatically since then. There’s also way more competition and more data to manage thanks to the market-shift towards machine learning. Tibco has had to find a way to change with its market, having been born in the era of free AOL CDs.

Citrix was itself founded in 1989, long before the cloud changed the way companies deliver software, and many years before companies shifted to subscription-based revenue models. Both companies had to change their approach to the way they do business dramatically in recent years.

We don’t have much data on Tibco, but we do know that Vista was looking for a buyer for the company, which it bought for $4.3 billion in 2014.

It’s hard to know what became of that, but we do know now that Vista has decided to create a much larger enterprise company to deliver two seemingly different sets of services — virtualization and data analytics.

Can these two companies combine to make something better?

A look at Citrix’s financials

While we no longer have windows into Tibco’s financials, Citrix’s latest earnings results show a somewhat slow-growing company in the midst of a transition towards subscription-pricing and away from support incomes.

In the fourth quarter of fiscal 2021, Citrix generated revenue of $851 million, but that top line was up just 5% from a year earlier. The company’s profit fell slightly, though, to $112.1 million, but as the quarter included restructuring charges, and a huge tax benefit, it’s hard to compare the results directly.

Private equity firms Vista Equity Partners and Evergreen Coast Capital have finally found a suitable match for Tibco: the firms will buy Citrix for $16.5 billion.

The deal, which represents a roughly 30% premium on Citrix’s value, aims to combine the two companies to create a legacy enterprise tech powerhouse. But will the combination produce something more useful for customers, or a conglomeration that doesn’t really fit well together?

Citrix is best known for its desktop virtualization products, and it’d be fair to presume it did pretty well when the pandemic hit and companies had to shift employees to remote work. Having the ability to deliver work desktops in one package to at-home workers would seem to be a good feature to have these past couple of years.

But it’s not been tearing up the scoreboard with growth recently. Its status as a public company gives us visibility into its financial performance (including its mediocre earnings report released today), and as we’ll see, its lackluster growth likely makes it more of a takeover target.

Citrix’s new partner Tibco provides tools and infrastructure to manage and analyze data. But it launched in 1997, and the analytics market has evolved dramatically since then. There’s also way more competition and more data to manage thanks to the market-shift towards machine learning. Tibco has had to find a way to change with its market, having been born in the era of free AOL CDs.

Citrix was itself founded in 1989, long before the cloud changed the way companies deliver software, and many years before companies shifted to subscription-based revenue models. Both companies had to change their approach to the way they do business dramatically in recent years.

We don’t have much data on Tibco, but we do know that Vista was looking for a buyer for the company, which it bought for $4.3 billion in 2014.

It’s hard to know what became of that, but we do know now that Vista has decided to create a much larger enterprise company to deliver two seemingly different sets of services — virtualization and data analytics.

Can these two companies combine to make something better?

A look at Citrix’s financials

While we no longer have windows into Tibco’s financials, Citrix’s latest earnings results show a somewhat slow-growing company in the midst of a transition towards subscription-pricing and away from support incomes.

In the fourth quarter of fiscal 2021, Citrix generated revenue of $851 million, but that top line was up just 5% from a year earlier. The company’s profit fell slightly, though, to $112.1 million, but as the quarter included restructuring charges, and a huge tax benefit, it’s hard to compare the results directly.

One of the most popular applications of artificial intelligence to date has been to use it to predict things, using algorithms trained with historical data to determine a future outcome. But popularity doesn’t always mean success: predictive AI leaves out a lot of the nuance, context and cause-and-effect reasoning that goes into an outcome; and as some have pointed out (and as we have seen), this means that sometimes the “logical” answers produced by predictive AI can prove disastrous. A startup called causaLens has developed causal inference technology — presented as a no-code tool that doesn’t require a data scientist to use to introduce more nuance, reasoning and cause-and-effect sensibility into an AI-based system — which it believes can solve this problem.

CausaLens’s aim, CEO and co-founder Darko Matovski said, is for AI “to start to understand the world as humans understand it.”

Today the startup is announcing $45 million in funding after seeing some early success with its approach, growing revenues 500% since coming out of stealth a year ago. This is being described as a “first close” of the round, meaning it’s still open and potentially going to grow in size.

Dorilton Ventures and Molten Ventures (the VC that rebranded from Draper Esprit) led the round, with previous backers Generation Ventures and IQ Capital, and new backer GP Bullhound also participating. Sources tell us the round values London-based causaLens at around $250 million.

CausaLens’s customers currently include organizations in healthcare, financial services and government, among a number of other verticals, where its technology is used not just for AI-based decision making but to bring in more cause-and-effect nuance when arriving at outcomes. Critically, the

An illustrative example of how this works can be found in the Mayo Clinic, one of the startup’s customers, which has been using causaLens to identify biomarkers for cancer.

“Human bodies are complex systems, and so applying basic AI paradigms you can find any pattern you want, correlations of any sort, and you are not getting anywhere,” Darko Matovski, the CEO and founder of the startup, said in an interview. “But if you apply cause and effect techniques to understand the mechanics of how different bodies work, you can understand more of the true nature, of how one part has an impact on another.”

Considering all of the variables that might be involved, it’s the kind of big data problem that’s nearly impossible for a human, or even a team of humans, to compute, but is table stakes for a computer to work through. While it is not a cure for cancer, this kind of work is a significant step towards starting to consider different treatments tailored to the many permutations involved.

CausaLens’s tech has also been applied in a less clinical way in healthcare. A public health agency from one of the world’s biggest economies (causaLens cannot disclose publicly which one) used its causal AI engine to determine why certain adults have been holding back from getting Covid-19 vaccinations, so that the agency could devise better strategies to get them on board (plural “strategies” is the operative detail here: the whole point is that it’s a complex issue involving a number of reasons depending on the individuals in question).

Other customers in areas like financial services have been using causaLens to inform automated decision-making algorithms in areas like loan evaluations, where previous AI systems were introducing bias into its decisions when using historical data alone. Hedge funds, meanwhile, use causaLens to gain better understandings how a market trend might develop to inform their investment strategies.

And interestingly, one new wave of customers might be cropping up in the world of autonomous transportation. This is one area where the lack of human reasoning has held back progress in the field.

“No matter how much data is fed into autonomous systems, it’s still just historical correlations,” Matovski said of the challenge. He said that causaLens is in conversations now with two major automotive companies, with “many use cases” for its tech, but on in particular on autonomous driving “to help the systems understand how the world works. It’s not just correlated pixels related to a red light and a car stopping, but also what the effect will be of that car slowing down at a red light. We are bringing reasoning into the AI. Causal AI is the only hope for autonomous driving.”

It seems like a no-brainer that those using AI in their work would want the system to be as accurate as possible, which begs the question of why the brilliant improvement of causal AI hasn’t been built into AI algorithms and machine learning in the first place.

It’s not that more reasoning and answering “why” weren’t priorities early on, Matovski explained — “People have been exploring cause and effect relationships in science for a long time. You could even argue Newton’s equations are causal. It is super fundamental in science,” he said — but it’s that AI specialists couldn’t understand how to teach machines to do this. “It was just too difficult,” he said. “The algorithms and technology didn’t exist.”

That started to change around 2017, he said, as academics started to publish initial approaches considering how to represent “reasoning” and cause and effect in AI based on finding signals that contributed to existing outcomes (rather than using historical data to determine outcomes), and building models based on that. Interestingly, it’s an approach that Matovski says does not need to ingest huge volumes of training data to work. CausaLens’ team is very heavy on PhDs (you could say that the startup really ate its dogfood here: it considered 50,000 resumes while assembling its team). And this team has taken that baton and run with it. “Since then, it’s been an exponential growth curve” in terms of discovery, he said. (You can read more about it here.)

As you might expect, causaLens is not the only player out there looking at how to leverage advances in causal inference in bigger projects that rely on AI. Microsoft, Facebook, Amazon, Google and other big tech players with substantial AI investments are also working on the field. Among startups, there is also Causalis focusing specifically on the opportunity of using causal AI in medicine and healthcare, and Oogway appears to be building a causal AI platform geared at consumers, a “personalised AI decision assistant” as it describes itself. All of this speaks to the opportunity to develop more and a pretty massive market for the technology, covering both specific commercial and more general use cases.

“AI must take the next step towards causal reasoning to meet its potential in the real world. causaLens is the first to leverage Causal AI to model interventions and enable machine-driven introspection,” said Daniel Freeman of Dorilton Ventures, in a statement. “This world-class team has built software with the sophistication to win over serious data scientists and the usability to empower business leaders. Dorilton Ventures is very excited to support causaLens on the next stage of its journey.”

“Every company will adopt AI, not just because they can, but because they must,” added Christoph Hornung, an investment director at Molten Ventures. “We at Molten are convinced that causality is the key ingredient that’s needed to unlock the potential of AI. causaLens is the world’s first causal AI platform with a proven ability to convert data into optimal business decisions.”

Workplace — the app originally built as a version of Facebook for employees to communicate with each other — now has more than 7 million users, carving out a place for itself as an app help companies communicate internally using essentially the same tools that have proven sticky in their lives with friends and family. That traction, it turns out, has been giving Workplace attention of another kind.

We’ve learned that Facebook (before it was rebranded as Meta) was approached by enterprise investors offering the social network a proposition: spin off the organization, they said, and let us back it as a startup. A deal would have valued a newly independent Workplace as a “unicorn” (at least at $1 billion) according to the source.

A source tells us that conversations didn’t progress, primarily because Facebook (and now Meta) saw Workplace as a “strategic asset” — not because Workplace generates sales anywhere close to the billions Meta makes from advertising on platforms like Facebook and Instagram, but important rather for presenting a more diverse face to the market. For regulators, it shows that Facebook/Meta is more than just a too-powerful social network; and for organizations, that Facebook can do more for them than just sell ads.

“It helps make Facebook [and Meta] look like an adult,” the source said.

Spokespeople from Meta and Workplace said that they had nothing to share and declined to comment for this article.

It’s not clear which investors were involved, but a source says that they were among those focused on late-stage, growth round investments with a view to injecting capital specifically in enterprise opportunities.

Their approach to fund a spun-out Workplace last year would have come at a time when late-stage and private equity investors were (and still are) ramping up their activities to snap up big, mature tech businesses. Thoma Bravo last year was reported to be raising $35 billion to hone in on more acquisition opportunities in the space (and it’s been making a wide number of investments and acquisitions to that end). Bloomberg estimates that private equity acquisitions totaled more some $80 billion in 2021, up more than 140% compared to 2020.

That pace does not look like it is slowing down this year, and it includes PE firms approaching larger technology behemoths to spin out operations as they look to streamline and realise more capital from less core, or possibly unprofitable, or more generally lagging, assets. Just earlier today, Francisco Partners announced a deal to snap up IBM’s Watson Health business, reportedly for around $1 billion.

Building a SaaS beachhead

For Meta, an approach to spin out Workplace highlights developments on two fronts.

On the corporate side, there have been calls to break up the company — the latest development on that front from earlier this month is that the courts ruled that the U.S. Federal Trade Commission can proceed with a lawsuit mandating a sale of WhatsApp and Instagram, alongside, reportedly, a separate probe of its VR division for antitrust violations. It’s a situation that some investors and shareholders will see as an opportunity, a tension that Meta might increasingly need to weigh up as it justifies holding on to its various assets.

For Workplace, the division has found itself at a key crossroads in the last several months.

On one side, Workplace has seen a number of key departures, including no less than its top two executives, Karandeep Anand (who this month was named chief product officer at Brex) and Julien Codorniou, who left to become a partner at London VC Felix Capital. A number of others have also left the building to move on other opportunities elsewhere.

The logic behind some of that movement was described to me, charitably, not as a response to the bad PR that Meta has faced, but natural attrition: here was a group of people assembled to create and build Workplace from the ground up, and now that it’s a more mature product with a clearer focus, it’s the right time for new people to come in and work on the next stage. (My personal opinion: Workplace’s new head, Ujjwal Singh, feels like a solid choice to lead it right now.)

But even if there has been reporting contradicting that workers might feel worn down by Meta constantly being bashed in the court of public opinion, Workplace has not been immune to it, either. We understand that Workplace signed a huge deal with a major chain of restaurants, one of the biggest, but the customer asked to hold off on announcing the win last autumn because of the bad news cycle and “reputation issues.”

“That shit doesn’t happen to other SaaS companies,” one person said.

That, it seems, would have been one argument in favor of distancing Workplace further from its parent, perhaps by way of a spinout, but it seems that Meta has the opposite idea.

Workplace has actually changed a lot over the years since it was first rolled out as a product.

Founded originally as a “work” version of Facebook — expanding how Facebook employees were already using Facebook to communicate to each other in private groups — Workplace was launched as a response to the rise of Slack and other chat apps for the workplace. Workplace’s logic was that it had a natural advantage since billions were already using Facebook. And, bringing in a new service targeting a different kind of user, with a different business model — paid, not ad-supported — opened the door to new business possibilities for the company.

That’s largely remained the strategy for the company even as the focus has changed for Workplace. Originally it introduced a number of integrations with other workplace productivity tools aimed at knowledge workers, part of a bigger effort to compete more directly against the likes of Slack and Teams. But over time, almost on accident, Workplace found an audience with deskless workers who communicated with their employers mainly by mobile. So what has emerged as the sweet spot for Workplace is being a communications app for both categories of workers simultaneously.

“We realised that instead of asking our customers to choose between Teams or Slack and Workplace, you could have both,” a source said. “Others could handle real-time messaging communications for knowledge workers, while Workplace does asynchronous best for everyone.”

And that appears to be the guiding idea for Workplace’s strategy now, which has seen it recently integrate more functionality from Microsoft Teams into its platform to complement Workplace, and yesterday to announce a new integration with WhatsApp, which is already very popular with frontline teams, and will now become a more formal interface for Workplace communications. From what we understand, closer integrations and services involving Meta’s VR business and the Portal are also in the works.

While the company is not due to update on user numbers until later this year, a source told us that there are now closer to 10 million users on Workplace, with key customers including some of the world’s biggest employers like Walmart, Astra Zeneca and others.

While Workplace had in the past been sold to customers as a standalone product, “I don’t think it will be sold as a standalone application ever again,” a source said.

Instead, it will part of a suite, for example selling business messaging plus Workplace, or along with a Facebook login feature, opening up the prospects of how Meta can engage with those businesses. (The wider sales pitch to enterprises is also likely a behind its motivation to acquire Kustomer, the CRM startup, although that deal has yet to close.)

So far from being ready to part with Workplace, it seems that Meta is now positioning it as part of a beachhead comprising a bigger SaaS business. Can it mobilize as an independent company might have done to realize that opportunity? VCs might still be waiting in the wings if it doesn’t.

Microsoft Teams and Google Meet are two of the most popular online communication platforms today, thanks to their robust set of features that make staying connected with clients and colleagues easy and convenient. As the two tools are pretty much the same in terms of functionality, picking just one can be a challenge. Here, we compare the features of each platform to help you decide which is more suited to your needs and goals.

Calling features

Both Microsoft Teams and Google Meet offer enterprise-grade security, HD-quality video, and screen sharing capabilities, but there are some slight differences.

In the free version of Teams, there is no limit to the number of people who can use the chat and document collaboration functions. However, for audio and video calls, the limit is 100 users. Group meetings are also limited to 60 minutes per session.

The paid version of Teams, on the other hand, supports up to 300 participants per meeting, and offers meeting and group call recording capabilities. It even has captions and transcription features, as well as an inline message translation feature that automatically translates messages into the language specified in a user’s settings.

Google Meet’s free version also supports up to 100 participants in a video call. Additionally, it has intelligent built-in features like muting, live closed captions, screen sharing, and auto screen focus, which automatically switches the screen to the person who is currently talking.

Users of the paid version can join meetings even without an internet connection through unique dial-in phone numbers. Other features available in the paid version include breakout rooms, polls, Q&A, and meeting recording.

Integrations and add-ons

Microsoft Teams is, first and foremost, a unified tool that allows users to communicate and collaborate on a single platform. It enables content collaboration on Microsoft 365 apps (e.g., Word, PowerPoint, Excel) and easily integrates with hundreds of other productivity and collaboration platforms.

Meanwhile, Google Meet fully integrates with Google Workspace, which easily enables users to schedule appointments and set call reminders within Google Meet using Google Calendar. Users can even broadcast their presentations live on YouTube.

Pricing

Both Microsoft Teams and Google Meet have free versions, albeit with limited features.

Microsoft Teams’ most affordable subscription is $4 per user per month, and an additional $4 per user is needed for the call-in capabilities. Adding webinar features will also cost users extra.

On the other hand, for as low as $6 per user per month, your organization can get access to Meet along with all the other powerful Google business apps and tools.

Which one is best for you?

Now that you know the similarities and differences between the two platforms, it should be easy for you to decide which suits your business the best. Google Meet is designed for startups and small companies that need a low-cost communications solution, while Microsoft Teams, with its robust features, is suitable for small and large businesses alike.

If you’re still unsure about either product, you can opt for a free trial to help you arrive at a decision. Or you can get in touch with our team of experts today. We’ll be more than happy to help you pick the right video conferencing or VoIP solution for your organization.