Ibm is reselling technology. Theyre trying to steer customers to ibm products. That is according to an internal memo. This is a big blow to net apps. The founder and ceo is worth one point 6 billion after his company went public. All sorts of products directly to consumers. It is the biggest Chinese Internet Company in the u. S. For now. It is a massive deal expected later this year. The Number One Company for pay and benefit in a new Glassdoor Survey will stop Tech Companies dominated. Intuit at number six. The survey found that the average base salary is 128,000. That is slightly lower than apple. Stopr lead story will hewlettpackard is facing a critical time in its history will stop sales fell 1 in the Second Quarter will stop this was the 11th straight quarter that sales have declined. The company did post a higher profit. Stock is gaining today. There were new cost cuts. The total number of cuts is nearly 50,000. For meg whitman, cutting costs is one thing was stop boosting sales is more difficult. They may have a tough time in the game. There is a big slowdown in pcs and printers. Jon erlichman is in los angeles with more. Death by 1000 cuts. It is amazing when you look at the ballooning number of cuts at each the over the last couple of years. Meg whitman had unveiled a huge number of cut. Lucky 7000. It did not stay at that number for very long will not this year they were talking about 34,000 job cuts by the end of 2014 will stop we have seen a number clean. If this was aked confidence issue and she said, no, it is not. I am getting deeper into what hp is all about. The more you see the observations, the more you can see a potential to cut costs. Very of businesses feel fine. They are ok with the idea of not having clunky hardware in our offices will theyre taking advantage of the cloud will stop you have hp competing with the likes of google and amazon will stop i ensure that as you look through the operations and you see one business and another business and they are not necessarily getting the sales they once did, do you need the same sales staff . Is a great chart that you showed us. It seems like that is a place to be, not knowing who will be next. Profits were up all stop where were the bright spots . What i find interesting is that for all of the knots against the pc business, Business Sales of pcs is relatively a bright bot for hp. We are not talking about big growth, but there is a need for companies to buy pcs and that brings cash into the company. The bigger thing is that no one is expecting that to fuel hp Going Forward. It does not even that much mentioned. It is a story about how hp can transition. Jon erlichman, thank you very much. Challenges, is want to bring in the chief Research Officer from boston was stop this was not the worst quarter ever. I have been following this story for 10 years. Hps putting out one crummy quarter after another. It was an interesting quarter. Pc showed some growth. They showed nice growth will stop that is indicative of a better front. As well as the cessation of support. When you get beyond that, you see some interesting weakness and some areas where they are challenged. It is a big part of that. They are not contribute into growth. One area that was traveling was this pod around storage. And spent a lot of money they have been getting results. It has been growing and contributing continuously to the growth. Let me back up and sent that out. Company wherea there was a big battle an acquisition battle between dell and hp will stop hp spent a couple billion dollars on an acquisition. Thats right. They had an aging storage product line will stop they need a platform where you can bring different storage types together. They got it. It has been growing. Like the rest of the industry, the whole Storage Market is slowed. They need to get that market growing. They needed to grow fast. They cannot continue to caps on commodity servers being a longterm engine of growth. We are seeing so much commoditization. And the move to a cloud is a headwind that they face. We hear about companies that are working at amazon will stop they are designing their own servers with their own components. They are bypassing the need for hp. And intelthat hp would be beneficiaries from the move to the cloud will stop they seem to be in this weird space where they are competing with the cloud. Hp is on this. They are aware of it all stop that is why they announced a deal with foxconn. They are really going to focus on trying to take advantage of a lot of these tales that foxconn hp and bring an hb brand. Servers,using standard but they do not want to pay the same length. What we need to figure out is, what does that business look like . Will they get any Technology Services for some of these emerging suppliers. How much can they lower the cost Going Forward . A way for them to participate in a fastgrowing segment all stop i remember doing a model on these guys. I realized that almost all the profits wasnt selling papers and ink. It did not occur to me that that would decline. What is the problem with the printer business . What is happening in printing is that a couple things happened. They underinvested in the product line will stop it took them longer than they would like to stop they had to push their laser line longer than they they are notop seeing a significant demand on the inc. Side to offset the deceleration they are seeing in toner all stop that is the oldschool current market. They also released the print Management Services game. They come into companies and they help them consolidate their printing so that they can have 50 people using the same printer. Now the product line is stronger. They are consolidating and they have the Services Growth earning to happen. When they get that engine going, they will have higher margin inc. Sales as opposed to toner sales. That, they had too much inventory and supply. It is still a little bit of a problem. I believe that print can reemerge and be a area for growth Going Forward will stop it all comes down to ink and toner all stop thank you very much. We appreciate it. You cannot, why order the latest j. K. Rowling novel on amazon. There is a big battle against the Book Publishing giant. On can watch a streaming your tablet, phone, and bloomberg. Com. This is bloomberg west. Im cory johnson. Amazon is refusing orders from upcoming hachette books. They have been trying to force hachette to accept terms that are better for amazon all stop one author is directly impacted by this. She wrote a letter to amazon saying nina joins us now via skype from seattle. Particularly in seattle, this has to be really upsetting all stop your local company, amazon, will not sell your book. It is painful. Especially because issa poured it in my entire career will stop talk to me about how you found out about this and what the reaction has been. It started leaking out on the internet and through facebook. I believe it was may 9 when i got a letter by email. Is the publisher of little brown stop he published one of my books. I went to the amazon site to look at my book and i saw the evidence on the page. You support what little and brown is doing . These are two big corporations negotiating all stop i support that they both need to do it they are doing a we as authorsat and illustrators were not used as pawns. It seems like the role of amazon is so much greater in the Publishing Industry because we do not have small bookstores over the country, in the way that we use it, but we do not have the same waltons and borders and barnes nobles. That is because of amazon. They have a wide range. I think a lot of people have become more accepting of ordering things online. They have made themselves very popular because of their lower pricing. That is what they are using here tte group ofhache authors and illustrators. I want my readers to know that you can order books online from independent bookstores will stop how are you doing this . I looked for you on twitter. How are you letting your readers know . And what can authors do . That is a business negotiation that i would not even want to does best. Own personal response, i use facebook. I am not on twitter. I do not have enough time to write as it is. I am reaching out to my friends and asking them to share my frustration. I wrote a letter when i was extremely frustrated seeing what is happening to my current books. Young readers. Have you heard from any of them . I have not heard from a Young Readers with regard to this. It is their parents were buying the books. My Young Readers approach me because they love the books. They have questions they want to ask. When they are probably hounding you for your next book. You already finished it. Ironically within the top 100. It had just won awards. It is now ranked at half a million in sales. It is available. I wanted to know that my other books are available and will be available all stop i know that this will pass. I want to reach a read a statement from hachette. They said in what ways has your publisher and author centric . They have approached us from the getgo. They have said what is going on all stop as authors and illustrators, we are not welcome at the negotiating table stop we do not know what is going on. What we know is what we see on our amazon page. That is the only thing that i am going by. I would like it to go back to what it has been. I hope that will happen soon. I wish i could download your book for my daughters kindle. I will find another way to get it to her. I want to thank you for your time and your book. Thank you so much. Bloomberg west will be right back. Im cory johnson and this is bloomberg west. Cisco was the feast of the networks. It was dominant. These days it is much more. I cut out what blair christie, ciscos chief marketing officer full top i asked her to describe the new cisco. You have been warned. This year is really exciting for us. It is our 25th anniversary of stop the first event was held in 989 will stop fast forward 25 years and we have over 25,000 people here in san francisco. Many are joining us online. This is a fantastic event. They come to learn and get certification. There is a 24hour hackathon. We play around with technology and we talk to experts. It is five days of all things i. T. I understand the numbers are different. How does the Customer Base look different . Had a less ago, we significant portfolio. Now we have Network Engineers and routers. We also security buyers. We have application buyers. The amount of buyers has expanded. The portfolios have expanded. This is the last of the. Com technology forp technologists. They reached every consumer. It is different now. Right on. So far she is knocking it out of the park. I was just saying, this is a different area of technology will stop i agree. Are you sure you dont want to jump in . John chambers with the photo bomb. We are seeing this next wave of the internet will stop we call it the internet everything. People, profits, and things are coming together. We are trying to create business outcomes, not just amazing technology. We have a ton of customers sharing with the activities. It is better. Give me an example. Think about retail. For retail to way grow revenue is to improve the customer experience. One of the worst experiences you can have is waiting to check out all stop the numbers are amazing. People do not finish a transaction in the store. They go online and say, more cashiers are needed all stop you put your stuff down and you leave. We are working to put sensors in the parking lot so they know where the traffic is going. They can predict when those lines will get busier. They can get people to the registers a you can have a smooth customer experience. They have reduced the waiting times by 30 will stop every second that they produce reduce the waiting times, they are saving 10 million. That is a position business decision. It is a networking products, software, you have a whole bunch datanversations about the coming in. You have profits. You have to train your employees to understand what to do. There is a whole combination. The same as the chief technology officer. D. C. The role of a network guy coming closer . Absolutely. Theres only one place for all this. That is the network. All of the data goes over the network. Networkan combine analytics with information by the individual, it is pretty powerful. A lot of what you say is engineers in the middle of it all will stop in terms of using acquisitions to get to that place, you guys are more successful. To find event see a way new things . We have an investment pavilion downstairs. It is all of our startups and early investments. The leaders from those organizations are here to share with our engineers. Oftheir giving us all sorts insight. It gives us an idea of what we need to build ourselves or go out and acquire. There was at least one photo bomb. There may have been to. Stopwas the cisco cmo will the market for Management Software is growing quickly will stop one of the dominant companies in that spot, how will they hold it . We will talk to the ceo next. You are watching bloomberg west. Im cory johnson will stop netsuite makes cloudbased internet management programs. As. Work with the oakland they are leveraging their services to grab more market share. Joining me now is my friends, the netsuite ceo. Looking right behind the catcher. They might see you stop you will see the netsuite logo. Tell us about your customers. I mention some of the smaller companies. When you announce earnings, what about your Customer Base . Netsuite was the first Cloud Company established in 1988. It was a small company. You see the next generation companies. Go pro and similar companies. You are starting to see mainstream companies shift their infrastructure to these new cloudbased architectures. Williamssonoma roll this out outside the u. S. The state of texas is using us. We are their primary procurement system all stop they are using it to serve all the agencies within the state of texas. The largest carpet manufacturer in the u. S. , when they move manufacturing to china, they did on that we. Netsuite. Now there are mainstream companies. Grant that is exactly why we created this show will stop we were talking with the cisco cmo. Technology is not just for technologists anymore. It is about this rollout to the broader world of stop when you look at the results from hp, i felt like you can see that struggle happening where they could not figure out the cloud. They have to respond to companies with lower cost in the cloud. Hp has really smart people running it. I know they can respond to the challenge. It is the challenge that every company faces. I would like to say that every company is becoming a Cloud Company will stop they have to figure out how to use this Ubiquitous Network to serve customers in new ways, ways where the customer is defining how they want to interface with a company. They may want to interface through a device. Back. Ar will call order new wiper blades. Those sort of things. When you think about the internet of things, you have to act on behalf of the owner of the thing. All of those things are causing massive disruptions. You have to think about producing products. How do you respond to these types of services and products. A customer you story that is true today for netsuite that may not of been typical five years ago. Things like the carpet company. A Berkshire Hathaway company out of georgia all stop it is a carpet store in western michigan. Becauseory was great they have a big infrastructure based on traditional systems. The pressures that the cloud was putting on their businesses and the opportunities to expand globally. Interestingly, they said, we will not take the old infrastructure. We need a new infrastructure. The industry was being manufactured in massachusetts, often by hands, two machines in north carolina. They are used to that kind of change. Interestingly enough, when they first broke the system, netsuite was not on the list. They looked at traditional systems. Oracle and similar companies. They added netsuite to the list and we ended up winning head to head with all of those traditional systems. On thet mind not being first list. I like being the last name on the list. What can they do with your software that they could not do s . Th other time to value. We were up in my up and running in six months. Is that because the purchases of the software are smaller . You do not need guys to come in and all this . Quite a real benefit of a system like netsuite is how much more flexible it is. You can get it in quickly. People thought these systems were not as flexible as the large systems. They are much more flexible. You can change your business in real time will stop you do not need to take a year to propagate a change to the system. Not to get too arcane, but we were running the software or companies and we knew every customer wants to customize their application all stop we had to include customization. That is a problem. Once you customize, it is hard to change. Some of those systems are sold by hp. All three of those companies. Growthink our revenue has declined. Change. Really seeing a gone to 34 growth will stop to what do you attribute that . I think a lot of it is the move to the cloud. It put a system in place and is the heart of the company. No one does that elected lay. Something is changing and all of these industries. Retail is changing massively. You have to retool the infrastructure to be a modern company will stop it is a necessity. The systems were designed before the cloud existed. They were designed to prevent access. You could not get through the firewall systems. If you are running your system i business like that, you will not have an effective business. You are seeing that move. You can change a fan belt while the engine is running, but it is hard. The ceo of netsuite, thank you. The senate may have just killed tax reform. We will talk about patent trolls. Xt on bloomberg west im cory johnson and this is bloomberg west. We are streaming on your phone, tablet, and who knows where else. Patent trolls. Are these hideous creatures truly innovations worst enemy . Our friends made this video to define patent trolls. Check it out. Theyre called patent trolls. The rights toire a patent but dont sell anything. T