I took a brief break from journalism to work for a couple of startups. That meant getting some stock options, which gave me the right to buy shares of a new company at low prices, before it went public or got acquired.

But when I left these firms I found myself wrestling with the typical dilemma faced by startup employees. I didn't have the cash to exercise my vested options. And once I left the company, I had roughly 90 days to do so — or give them up.

That's what happened at the first startup. I was about to walk away from my options with the second startup when I came across a Silicon Valley firm that helps employees of venture-backed startups exercise their options.

The Employee Stock Option, or ESO, Fund, which is based in Foster City, gives startup employees access to funds they need to exercise vested options, in exchange for a percentage of their shares plus fees and interest.

Exercising options is risky business

Other firms, such as Shares Post and Nasdaq Private Market, also offer ways for startup employees to sell their exercised options, typically through the companies that issued them. But these firms do not offer individual financing for exercising options.

What made ESO Fund compelling to me was that it offers what is a essentially a non-recourse loan, which is a fancy way of saying it takes on all the risk. If your options end up not being worth much because of a disappointing IPO or if they turn out to be worthless because the startup goes out of business, you wouldn't have to pay back the money.

"Because we're non-recourse, we're essentially free leverage," ESO Fund co-founder Scott Chou told Business Insider.

Zero leverage was exactly what I was looking for. Now, I wasn't a hotshot executive, manager or engineer so we're not talking about options that would have made me a millionaire. But I thought the proceeds certainly could help offset my kids' college costs and pay down some credit card debt.

But I didn't have the extra cash and was not willing to go deeper into debt to exercise my options. Also, I didn't really have any appetite for the risk involved.

With ESO Fund, I didn't have to dip into our family savings or take out a personal loan to cover the options and the taxes I'd have to pay for exercising them. And I wouldn't have to worry about the risk that the investment might fail.

The tradeoff

But it's a tradeoff. 

I'd still have to wait for the startup to go public or be acquired, but if it ends up with a gangbusters IPO or gets acquired at a hefty price tag, I'd have to share a sizeable chunk of the proceeds with ESO Fund. Which is fine with me since ESO Fund did take on all the risk.

Typically, ESO takes roughly 30% of the proceeds, though it can vary depending on the startup.

It was an alternative that paid off handsomely for Shariq Minhas, an engineer who once was employed by a ride-sharing startup that went public recently. He had left before the company's IPO.

"I didn't have money to do the early exercise of the stock options," he said. "There was significant money on the table." He found it hard to accept that he may just have to simply walk away, he said: "You're screwed. You'd have nothing to show for all those years of work."

He decided to sign with ESO Fund which provided him with the roughly $400,000 he needed to exercise his options and to cover the sizeable tax burden related to the exercise. 

"It was a no-risk proposition," he said. "ESO Fund was taking all the risk over here by fronting the money. They have no recourse. If the company goes under, they don't get any of the money back."

But ESO Fund did get its money back — and more.

The ride-sharing company went on to have a solid IPO which was great news for Minhas — and for ESO Fund. Minhas estimated that ESO Fund made roughly $800,000 on the transaction.

In a way, that's money Minhas gave up because he opted to work with ESO Fund, he said. But then again, he didn't have to come up with the dough for the options and the taxes.

"If you think about it, they could have lost that very easily and never gotten it back," Minhas, who has launched his own startup, a Silicon Valley engineering recruiting service called JetCake, said. "Or I could have lost the 400K and never got anything for it."

Chou came up with the idea during the dot-com era

ESO Fund, which started in 2012, has funded more than 1,000 individuals from more than 400 companies, Chou said. He said he came up with the idea for the fund in the early 2000s after the dot-com boom when stock options became one of the principal ways to compensate employees.

Chou found out that many people were simply walking away from options because they didn't have the funds to exercise them. That led him and other investors to set up the fund.

ESO Fund has helped clients exercise stock options worth as little as $1,500, and has funded much bigger deals worth a few million, Chou said. "A median transaction is probably $55,000," he said. 

Chou said ESO Fund is ideal for young people working for startups who do not have the resources to exercise stock options.

"Younger people have less money saved to do this," he said. "And younger people are less likely to be connected to the alternative sources of capital, you know, like wealthy friends or, or something like that."

Of course, ESO Fund will not offer funding to any startup employee. The biggest challenge for ESO Fund is figuring out which startups are worth the risk -- and which ones may be bad news.

"What we're doing is effectively investing," he said. "Granted, these are small-scale numbers, but it all adds up. We have to do due diligence just like a regular VC. Since we don't have access to all of that information, the  formal presentations of the company and stuff like that, we sort of have to infer the health of the company through public sources."

'Cycles are part of doing business.'

They do the due diligence with the help of cutting-edge AI and Machine Learning technology. ESO Fund has a data team that is "constantly gathering lots and lots of information," Chou said. He would not elaborate on their methods, but he said their data team considers all kinds of information, from the age of the startup's CEO to "whether their street address ends in an even number."

"When I run the machine learning it will identify attributes that do matter," Chou said.

The system isn't perfect. ESO Fund has worked with clients from startups that turned out to be in bad shape. One prominent example is WeWork, the once hot startup whose public offering got shelved amid serious questions about its financials and business projections.

"Yes we have some WeWork but the fund is highly diversified so no one company makes us or breaks us," Chou said. 

In fact, he sees the WeWork fiasco as a reminder of the cycles that VC investing typically goes through. "A WeWork-like disaster becomes the poster child for every VC-industry correction," he said.

Chou has seen his share of corrections and downturns, including the tech dot-com bust in 2000 and the great recession a decade ago. "Cycles are just a part of doing business and will never end," he said.

But in a time of growing economic uncertainty, the process of picking winners can certainly be trickier for ESO Fund. Chou said that in the event of a downturn "more companies will struggle to raise capital, investors are going to concentrate capital only on their best assets and the probability of companies dying will be higher."

"So, that means we will probably say 'No' more often," he said.

But Chou said he remains upbeat about the future.

"I've been in this business for a long time and the doors have been slammed many times and it always comes back because of the fundamentals of the country and the economy are still there," he said. "Just because the market's not super warm and receptive, it doesn't mean it doesn't exist. So I'm not concerned. We'll still deploy capital. The venture community will still deploy capital. I'm positive of all these things."

Got a tip about ESO Fund or another tech company? Contact this reporter via email at This email address is being protected from spambots. You need JavaScript enabled to view it., message him on Twitter @benpimentel or send him a secure message through Signal at (510) 731-8429. You can also contact Business Insider securely via SecureDrop.

Following is a transcript of the video.

Narrator: Apple stores were the most profitable retail stores per square foot in 2017, beating out brands like Tiffany and Lululemon.

Other stores have tried to copy the formula, but these feel like imitation rather than innovation. Apple stores are a core part of Apple's brand and of spreading that brand.

Tim Cook: Our stores are also the best place to go discover, explore, and experience our new products.

Narrator: An Apple store is an Apple paradise, and anyone walking by can see this utopia, because most Apple stores have big glass walls.

Jim Mourey: When they see that other people are inside engaging with the product, there's this general social desire to belong.

Narrator: That's Jim Mourey. He teaches marketing at DePaul University.

Mourey: And so there's this FOMO, like, "fear of missing out" quality of wanting to go inside and see what the new thing happens to be at the store.

Narrator: And once customers get into the store, they tend to stick around, because Apple stores are just plain cool. Each store's design is as sleek and modern as Apple's products. The flagship stores even double as tourist destinations. Each one is like a beacon, with multiple floors, indoor trees, and incredible architecture. Apple stores wow customers with more than just the products.

And the stores are filled with visual cues that get the customer's attention. You can see every shiny new model on display. After using the iPhone 11, you know exactly how much better it is than your old iPhone 7.

Mourey: Once people have their hands on something, they're more likely to purchase it. As soon as they feel some sense of ownership of the product, they actually value it more once it's in their possession.

Narrator: And this adds a reason to go to the store. Even if you're not planning on buying anything. You can go just to play with the new products.

Mourey: The longer you keep people in the store, the more likely they are to buy something.

Angela Ahrendts: They're carefully curated, and they change seasonally to always feature our newest products and services.

Mourey: There's this notion of the pain of paying. When we know we're in an expensive store, the more we can sort of mitigate that feeling of pain, by, like, maybe hiding the price tags and the sticker shock, the better off we are.

Narrator: Mourey explained that when you feel that a price is unfair, you actually have more activity in your amygdala, a part of your brain that processes emotional pain.

Mourey: You can almost imagine it as like a, you know, a plus and a minus, and if the plus outweighs the minus, then I'm more likely to purchase it.

Narrator: In an Apple store, the price tags are very small. So even though the products are expensive, you're not thinking about the price. Good for the amygdala.

There's also an aspirational quality to Apple's products. With Apple devices, loyal customers feel like they're getting the best of the best. There are no giant "sale" or "clearance" stickers that devalue the products, and the staff makes customers feel important by showing individualized attention.

Mourey: We want to make the happy experience and the ease, the convenience as great as possible and minimize that inconvenience or that pain of paying as much as possible.

Narrator: It turns out Apple is really good at this. When it's time to check out, there's no line and no cash register. Painless. The phone you've been playing with for the past 20 minutes is now yours. And you told yourself you weren't planning on buying anything.

In the last few years, Apple has created even more reason to go to an Apple store, adding free classes called Today at Apple on topics like photography and coding. These classes are also a part of Apple's vision for its stores as a part of the community.

Ahrendts: We call them town squares because they're gathering places.

Narrator: But the Apple store utopia might not be as glorious as it looks from the outside. In the past year, there have been reports of customers facing long wait times and overcrowded stores. Customers and reporters have lamented the loss of the seamless Apple store. Apple might have to rethink its retail strategy if it wants to maintain the store's reputation. Ultimately, Apple wants its stores to have a positive impact on its customers. When it gets it right, it makes spending money really easy.

Wall Street's relationship with the public cloud took a big step in 2019.

Other industries have already fully embraced the idea of moving their data and tools off physical servers and to servers managed by the likes of Amazon Web Services, Microsoft Azure and Google Cloud Platform. But thanks to fears and uncertainties around the security and resiliency of the tech, Wall Street's adoption of the public cloud has been a slow burn. 

However, this year proved to be a big one for the duo, as banks showed an increased willingness to move more of their workloads over, culminating in November with one of the industry's longest holdouts announcing its intention to work with a new public cloud provider. 

We've compiled our biggest stories detailing the relationship between Wall Street and the public cloud. 

Some of Wall Street's biggest players discussed big plans around the public cloud

From moving workloads to opening new offices, Wall Street's growing acceptance of the public cloud was evident in the resources it was putting into the tech in 2019. We also spoke to tech executives about their strategy around what parts of their infrastructure they felt most comfortable transitioning. 

PayPal is working to handle a chunk of its transactions on Google's public cloud for the first time. The payment giant's head of tech explains how that cuts costs and helps prepare for the holiday rush.

Goldman Sachs is putting its own Marquee app on Amazon's cloud in a pitch to lure more fintech developers

JPMorgan is building a cloud engineering hub in Seattle minutes away from Amazon and Microsoft, and it's planning to hire 50 staffers this year

TD Ameritrade's CEO explains how it's moving towards the public cloud, and why tech spend is 'the golden dollar'

Deutsche Bank just nabbed AQR's head of technology to help lead a $15 billion push into digital with a focus on the cloud

 

Firms also began considering what was needed to have a multi-cloud strategy

As firms began to feel more at ease using the public cloud, they recognized a need to develop a more nuanced strategy for using the tech. One common goal was to be able to operate across multiple public clouds, often referred to as being "cloud agnostic."

Wall Street is finally willing to go to Amazon's, Google's, or Microsoft's cloud, but nobody can agree on the best way to do it: 'If you pick a favorite and you're wrong, you're fired'

JPMorgan has tapped buzzy startup Snowflake to help it solve one of the biggest issues firms face when moving to the cloud

Red-hot startup Snowflake is adding support for Google's cloud in an effort to meet Wall Street's demand

 

As always, a big concern for firms centered around how much to invest in the tech

While most banks believe a shift to the public cloud will lead to savings in the long term, short-term investment is still required to make the necessary changes. As a result, the resources put towards the tech has continued to climb.

Wall Street plans to spend nearly half its IT budget on the public cloud in 2020. Here's where firms see the biggest benefits, and what's still holding them back.

 

Exchanges were the early adopters of the public cloud on Wall Street

As the central hub for trading, and home to massive amounts of data, exchanges pose an interesting use case for the public cloud. As a result, providers haven't wasted time trying to recruit them onto their public clouds. 

Nasdaq's CEO just threw her support behind the cloud and said she hopes to eventually move the exchange there

Cboe's CEO is highlighting the limits of the cloud even as Nasdaq says it's on board

Google Cloud and AWS see winning over exchanges as key to pitching Wall Street holdouts on the public cloud

 

However, some of the biggest players have resisted the tech

Despite the fanfare surrounding the public cloud, there have been those that are hesitant to adopt the new tech. Bank of America had arguably been the most notable holdout. However, the big bank announced late this year it had intentions to finally move some tools to the public cloud. 

Bank of America is putting the finishing touches on a 7-year cloud journey its CTO says has saved the bank billions and improved customer interactions

Bank of America's CTO explains what's holding him back from moving to the public cloud, even as the rest of Wall Street gears up for the switch

Bank of America's CEO says that it's saved $2 billion per year by ignoring Amazon and Microsoft and building its own cloud instead

IBM turned Wall Street's public cloud security fears into an opportunity to work with Bank of America on a new product. It's a bid to stand out from AWS, Google, and Microsoft.

The cofounder of a Silicon Valley software startup was fired as CEO earlier this year after he allegedly used his company credit card to expense over $75,000 spent at strip clubs while entertaining clients.

Bloomberg was the first to report on Friday that Eric Gilmore, the cofounder of Turvo, was fired back in May from his position as CEO. Over a three-year period, Gilmore allegedly expensed $76,120 of costs from "adult entertainment venues," according to a legal filing reviewed by Business Insider.

All told, Gilmore allegedly expensed "at least $125,000 in entertainment charges," discovered in May when Turvo's chief financial officer reviewed company credit card expense reports, according to the filing.

That filing is in connection with a lawsuit that Gilmore filed against Turvo in August. In the suit, Gilmore didn't deny the claims regarding his expenses, but argues that the company's board didn't adhere to proper procedure in removing him from his position as CEO. The suit was ultimately settled in September, Bloomberg reports.

"Turvo has no further comment. The matter has been resolved and the company has moved on," said a spokesperson.

Gilmore could not be reached by Business Insider, but declined to comment to Bloomberg. However, Gilmore remains on Turvo's board of directors, and is still its largest shareholder, Bloomberg reports.

Turvo was started back in 2014 as a platform for various pieces of the supply chain, including shippers and carriers, to work together. The three cofounders — Gilmore, Sai Nagboth, and Jeff Dangelo — all took C-suite positions at the startup, which was last valued at $435 million, according to Pitchbook.

According to PitchBook, Turvo has raised $89 million from investors, including prominent figures like former Nest CEO Tony Fadell, Box CEO Aaron Levie, and Square Product Engineering Lead Gokul Rajaram.

Meanwhile, Turvo announced in November it had appointed a new CEO, Scott Lang, to take over for Gilmore. In an interview with Bloomberg, Lang was asked if he has tried to "win over prospective clients at stripper joints."

"Never have. Never will," Lang told Bloomberg.

Read the full legal filing below:

Apple's new Mac Pro costs as much as Tesla's Cybertruck if you outfit it with top-of-the-line specifications. Starting at $6,000 for the base model and going all the way up to just over $52,000, the Mac Pro is tens of thousands of dollars more expensive than your average computer.

And there's a good reason why: it's not meant for the average person. "For that money, you're not buying a PC," Ranjit Atwal, a senior research director at market research firm Gartner, told Business Insider. 

The Mac Pro, which Apple launched on December 10 after announcing it in June, is a computing powerhouse designed for professionals and businesses that regularly manage very heavy workflows. That could include tasks involving large-scale data processing, app and video game development, networking infrastructure, film editing, and music production.

The Mac Pro runs on an Intel Xeon W processor, the line of Intel chips optimized for tasks like 3D rendering, the development of artificial intelligence programs, and running complex 3D CAD software. The $6,000 base model comes with an 8-core processor, 32GB of memory, and Radeon Pro 580X graphics with 8GB of memory and 256GB of storage space.

But the high-end model that will run you more than $50,000 comes with a beefy 28-core processor, 1.5TB of memory, two Radeon Pro Vega II Duo GPUs, and 4TB of storage. You can also add Apple's Afterburner card, which is an accelerator card that can enable playback of three streams of RAW 8K video simultaneously, for an extra $2,000, and wheels for $400.

Atwal sees the Mac Pro, especially the high-end configurations that cost tens of thousands of dollars, as being more of an infrastructure solution than a traditional computer. "That's what you would expect to get for those kinds of price points," Atwal said. "It's almost a portable data center."

The Mac Pro could also be well-suited for those interested in best-in-class gaming, says Jeff Fieldhack, research director at Counterpoint Research. "At the price, this is for the hardcore gamer and performance junkies," he said to Business Insider via email. 

Until this week, Apple hadn't launched a new Mac Pro since 2013, when it released the cylindrical model that some likened to a trash can — a design that made the Mac Pro difficult to upgrade. Apple addressed that with the new 2019 model, which features a new build that allows for easy access to internal components. But that didn't prevent some from poking fun at the design yet again, this time comparing it to a cheese grater.

The launch comes after Phil Schiller, Apple's senior vice president of worldwide marketing, said in 2017 when speaking to a group of journalists at BuzzFeed and TechCrunch among others that the company was "completely rethinking the Mac Pro." 

Google started in a garage, but now its employees work in some of the most unusual offices in all of tech. 

The company seems to have a knack for seeing potential in old warehouses, factories, or storage facilities, even if they've been sitting empty for years.

In many cases, architects keep the structure of the building, and add windows and skylights to let in light while knocking down walls and making an open space. Modern architecture gets a classic feel from the original features that remain, and Google offices often keep some signs or pieces that reflect the building's earlier uses.

While this isn't to say every Google office is in a gigantic, renovated factory, the company does have several buildings that are on their second or third lives, with interesting histories. Here are a few of them.

An Instagram influencer has been sentenced to 14 years in prison after going to extreme lengths to obtain a domain name.

Rossi Lothario Adams II, from Cedar Rapids, Iowa, was involved in a complex plot to obtain a domain name, which involved enlisting his cousin to hold the owner of the domain name at gunpoint and force him to transfer ownership.

Adams is the founder of social media company "State Snaps", which operated on a range of social media platforms. He founded the firm as a student at Iowa State University.

The site largely showed images of students engaged in "crude behavior, drunkenness, and nudity," and once had more than 1 million combined followers on its social media platforms, according to the US Justice Department.

Adams then tried to obtain the domain name 'doitforstate.com,' between 2015 and 2017, according to the DoJ, as his followers often used the slogan 'Do it for State!."

But the owner of the domain, Ethan Deyo, would not sell it.

In June 2017, Adams persuaded his cousin, Sherman Hopkins Jr, to hold Deyo owner at gunpoint in an attempt to force him into handing over the domain name.

Adams gave Hopkins Jr a demand note which contained instructions for transferring the domain name over. It was thought to be the first time someone had tried to steal a domain name at gunpoint.

Hopkins Jr, according to the DoJ, entered Deyo's home wearing a disguise of pantyhose on his head and dark glasses. He located Deyo, and held the gun to his head while ordering him to transfer the domain over.

Deyo managed to gain control of the gun after quickly turning to move the gun away from his head, and after a brief struggle in which he was shot in the leg, he shot Hopkins Jr several times in the chest and contacted the authorities.

Both Hopkins Jr and Deyo survived.

Adams has been sentenced to 14 years in federal prison, while Hopkins Jr was last year sentenced to 20 years according to the Cedar Rapids Gazette.

The creators behind "Fortnite" are asking Google to allow the game on the Play Store while simultaneously calling the company monopolistic for exacting a tax on in-app purchases.

As first reported by Google 9to5, "Fortnite" creators Epic Games are planning to submit the game to the Google Play Store, where it has been notably absent since its launch on Android in August 2018.

Previously Android players had to download the game directly from Epic's site, a technique known as sideloading. This was done explicitly to circumvent Google's 30% tax, which CEO Tim Sweeney told Business Insider was "disproportionate to the cost of the services these stores perform."

The method led to some criticism however after it exposed a major security flaw which would allow hackers to gain access to a player's phone.

Epic confirmed to Google 9to5 that not only is it submitting the game to Google, it's asking for an exemption from Google's standard 30% tax on in-app purchases.

"Epic doesn't seek a special exception for ourselves; rather we expect to see a general change to smartphone industry practices in this regard," an Epic spokesperson told Google 9to5.

While "Fortnite" itself is free, there are purchases available in the game which allow the player to buy cosmetic modifications to their character. This is the game's main source of revenue, and it's these purchases which Google taxes.

"We have asked that Google not enforce its publicly stated expectation that products distributed through Google Play use Google's payment service for in-app purchase. We believe this form of tying of a mandatory payment service with a 30% fee is illegal in the case of a distribution platform with over 50% market share."

According to Google 9to5's sources, Epic would sidestep the tax by using "Fortnite's" in-game currency V-Bucks rather than Google payments.

"We note that Google Play's Developer Distribution Agreement does not require developers use Google payments. It merely references a number of non-contractual documents asking developers to do so," the spokesperson said.

"Further, Epic operates a major PC storefront and payment service and we do not force developers using our store to use our payment ecosystem," they added.

This isn't the first time "Fortnite" has gone head-to-head with a tech giant to change its policies, in September last year it strong armed Sony into abandoning its ban on cross-play between Playstation and other consoles. So far Google doesn't seem convinced, as it put out a statement saying it expected Epic to play by the same rules as everybody else on the Play Store.

"Android enables multiple app stores and choices for developers to distribute apps," a spokesperson told Google 9to5. "Google Play has a business model and billing policy that allow us to invest in our platform and tools to help developers build successful businesses while keeping users safe. We welcome any developer that recognizes the value of Google Play and expect them to participate under the same terms as other developers."

Apple also leverages a 30% tax on in-app purchases, but Apple devices don't allow apps to be downloaded from anywhere else other than the app store. Apple has also been criticised for the tax by music-streaming giant Spotify, which filed an antitrust complaint with the European Union in March.

SoftBank is selling back its nearly 50% stake in Wag to the embattled dog-walking startup, while the startup struggles to turn around its performance.

Wag CEO Garrret Smallwood circulated a memo around the company on Monday, informing employees that it was cutting jobs and it was was "amicably parting ways" with SoftBank. SoftBank was also giving up two seats on the board.

The news was first reported by the Wall Street Journal's Cara Lombardo,who wrote that SoftBank was selling the shares back at a price "well below" the $650 million valuation that Wag commanded when SoftBank bought the shares last year.  

"Today, we said goodbye to a number of our friends and colleagues as we align our organization with the needs of our business," Smallwood wrote in the internal memo, reviewed by Business Insider. "This was an extremely painful and difficult step. But it was also an important one for our future." Wag declined to comment on how many employees were laid off, or disclose any further financial details. 

SoftBank's Vision Fund first invested in the dog-walking startup last year in January, pushing up the company's valuation to around $650 million. But the startup has struggled to compete, and sought to sell itself beginning this fall. Smallwood only became the Wag's CEO last month, after the company's former CEO Hilary Schneider left to join another firm. 

SoftBank's Vision Fund investments have drawn close scrutiny over the past few months, after a series of high-profile investments flopped and left the company reeling, like WeWork's pre-IPO implosion this fall. SoftBank's Masayoshi Son seemed to express concern about Wag in his latest investor presentation, as he referred to a dog-walking company as one of Vision Fund's more troubled investments. 

SoftBank's sale of its stake followed a disagreement within the company's board on its path to future profitability, one person familiar with the talks told Business Insider. 

SoftBank's Vision Fund did not respond immediately to a request for comment. 

When Amazon executives are asked to compare their offerings with those of their competitors, they typically dodge the question by saying the company is focused on customers, not competitors.

But in its formal protest over Microsoft winning the $10 billion winner-take-all JEDI cloud contract, Amazon was forced to do exactly that.

In the redacted protest documents that became public on Monday, Amazon asserted that its cloud technology was "objectively superior" to Microsoft's and therefore that the Pentagon awarded the contract to Microsoft only to please President Donald Trump.

Amazon then gave the enterprise world a rare glimpse at the ways Amazon's believes its cloud to be superior. The top way is a technology called Amazon Nitro. The document repeatedly mentions it, for instance:

"AWS offered advanced cloud capabilities that Microsoft could not match. These capabilities included AWS's leading Nitro architecture - AWS's purpose-built, hardware-based virtualization tool that provides exceptional security and performance for DoD users."

Nitro is a custom computer chip, computer card, and software. It originally came from Amazon's $350 million acquisition of a secretive Israeli company called Annapurna Labs back in 2015.

Nitro is a hardware method that essentially lets each computer program running in AWS think it has the underlying computer server all to itself when in fact it's sharing that server with lots of other programs. That kind of technology is known as virtualization, and it isn't new. Microsoft has had its own virtualization software for decades. In the document, Amazon compares Nitro with Microsoft's software and, as you might expect, finds Microsoft's software lacking.

While Nitro is proprietary to Amazon's cloud, the industry considers Nitro a member of a cloud-computing trend known as "smart cards." Microsoft also uses smart cards in its cloud, albeit in a different form. Microsoft's form is known as Microsoft Azure's FPGA, Data Center Knowledge reports.

Amazon also feels that the people who awarded the contract failed to give AWS enough credit for its work with another secretive government agency. The name of that contract and the organization is redacted, but the industry knows Amazon is running the CIA's cloud, a contract it won in 2013.

Amazon wants credit for working with the CIA

"DoD could not have reasonably concluded that Microsoft, which lacks experience operating classified cloud environments and hosting classified data, proposed a more effective performance approach than AWS," the document says.

In 2018, however, as the two companies were crafting their bids for the JEDI contract, Microsoft did win a smaller cloud contract from the CIA and other intelligent agencies. As Geekwire reported at the time, while this smaller contract might not rival what Amazon is doing for the CIA, it did mean Microsoft's cloud met government security standards.

Amazon also argues that the Department of Defense made errors in evaluating the technical merits of its clouds and that it changed the original list of requirements in ways that harmed Amazon's chances and increased Microsoft's.

That's an interesting take because, during the 2017-2019 period when the enormous cloud contract was out to bid, Amazon's competitors bitterly complained that Amazon had found ways to stack the deck in its favor.

Oracle even sued over it and lost, with the court ruling that the Department of Defense did not demonstrate any conflict of interest in the RFP process. (Oracle is appealing.)

Amazon mentions these perceptions of its competitors in the protest, writing:

"Indeed, AWS's performance [... redacted words] was one of the primary drivers of industry concerns that DoD designed the JEDI Contract specifically for AWS because the industry believed AWS, [... redacted words], was ahead of the rest of the industry with respect to hosting classified data."

Microsoft's bid for the initial phase may have been lower than Amazon's

But despite Amazon's claims that the contract award was based on pleasing Trump, it's not clear whether Amazon was actually the lowest-cost bidder for the initial contract period. The document redacted Amazon's bid amount, though it did say Amazon was forced to increase its price as the Pentagon refined its list of requirements. The document revealed that Microsoft's evaluation bid came in at $678,517,417.38.

It's worth pointing out that would-be government contractors commonly file protests when they lose out on contracts with this much money at stake. It's also worth pointing out that Microsoft already has decades of federal contracts with the US government, including the Department of Defense.

Time will tell whether Amazon's arguments will work. At least one Wall Street analyst, the Wedbush Securities analyst Daniel Ives, believes the protest will be futile.

At the same time, Microsoft disputes Amazon's claims that AWS is a technically superior cloud.

"We have confidence in the qualified staff at the Department of Defense, and we believe the facts will show they ran a detailed, thorough, and fair process in determining the needs of the warfighter were best met by Microsoft," a Microsoft representative told Business Insider's Ashley Stewart in a statement. "We've worked hard to continually innovate over the past two years to create better, differentiated offerings for our customer."

A former Oracle product manager has accused the tech giant of selling phantom or broken products, and then forcing him out when he complained to federal authorities.

Tayo Daramola said he had uncovered problems with an Oracle cloud-based project geared to universities, including products that did not work or didn't even exist, according to a federal lawsuit filed in San Francisco. He said Oracle retaliated against him for "reporting what was in fact a pattern of criminal acts," the suit said.

"Oracle demoted Daramola, stripped him of meaningful responsibility … because Daramola recognized fraudulent behavior, refused to engage in it and reported it internally as such," the suit said.

Oracle rejected Daramola's claims. "We don't agree with the allegations and intend to vigorously defend the matter," spokesperson Deborah Hellinger said in a statement emailed to Business Insider.

Daramola, who lives in Montreal, worked for Oracle-owned NetSuite from November 2016 to October 2017 as a project manager for "University Book Store," a cloud service used by several educational institutions, including the University of Washington and University of Texas in Austin.

According to the suit, which was first reported by The Register, Daramola found out that Oracle sold products "it could not deliver and that were not functional."

"Daramola came to understand that the products sold to US customers in many cases did not exist, were not functional, and/or had not been developed at the time of the sale to the customer," the suit said.  But he also realized that part of his job was to "ratify and promote Oracle's repeated misrepresentations to the customer," the suit said.

"This project management strategy was intended to gain Oracle 'runway' (time) to develop and obtain functionality for the non-existent software products Oracle had already sold to the customer while representing their existence and deliverability as of the time of sale," the suit said.

But Daramola resisted being part of what he called "misrepresentation and likely fraud," the suit said. His managers retaliated against him and he was eventually forced to leave after he filed a whistleblower complaint with the SEC, the suit said.

The complaint is seeking general and punitive damages.

You can read the Daramola Complaint vs. Oracle here.

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A shooting at the Glendale, Arizona office of Amazon contractor Integrity Staffing Solutions has left one man dead, Fox 10's Linda Williams reported Monday. Max Gorden, a reporter for KTVK 3TV and KPHO CBS 5, has also reported that police said the man has died.

While a representative for the Glendale Police Department was not immediately available for comment, the department's official Twitter account posted on Monday evening that a suspect had been shot. "One suspect shot, officers are okay," the tweet states. "PIO will be enroute. Thanks for your patience. We will update as soon as possible." 

In a statement to Business Insider, an Amazon spokesperson confirmed an incident had occurred and shared well wishes to the victim. No additional information was provided.

"The incident that occurred today at the office of our staffing partner is a terrible tragedy," the Amazon spokesperson said. "Our thoughts are with the victim and everyone who has been impacted by this incident."

According to a local Fox 10 news report, the suspect is believed to be a former employee who "entered the business and was involved in a disagreement with another man." Police at the scene told Fox 10 reporter Linda Williams that the suspect shot the victim inside building located 95th Avenue and Camelback Road and fled in his vehicle. Police later told Fox 10 that the victim had died.

 

Integrity Staffing Solutions works with Amazon to place employees in warehouses and fulfillment centers around the nation. Amazon currently employees more than 250,000 full-time fulfillment workers.

In 2014, Integrity Staffing Solutions was at the center of a Supreme Court case involving workers seeking compensation for lost wages due to time spent undergoing Amazon's extensive security protocols. In a unanimous 9-0 reversal of a previous holding denying compensation, the court voted in favor of paying employees for time spent going through security. 

A representative for Integrity Staffing Solutions was not immediately available for comment.

For the person who has everything, maybe a $5,000 League of Legends Louis Vuitton leather jacket is the perfect gift this holiday season. 

The fashion house Louis Vuitton released a capsule collection on Monday in collaboration with Riot Games' "League of Legends." The collection, branded as LVxLOL, was designed by Nicolas Ghesquière, the fashion label's artistic director of women's collections. The pieces range in price from a $170 bandeau to a $5,600 leather jacket. 

The companies have collaborated in the past. The partnership was first announced in September, and in October, "League of Legends" released Louis Vuitton skins also designed by Ghesquière. Players could purchase the outfits for their characters for around $10.

The collaboration is no doubt niche. Riot Games refers to it as the "first-ever collaboration between a global eSport and a luxury fashion house." 

Louis Vuitton says products will ship in February or March of 2020. Even if you can't purchase any pieces from the collection, you can take a look here.

Apple on Monday told a federal court it has "deep concerns" that two Chinese-born former employees accused of stealing trade secrets from the company will try to flee before their trials if their locations are not monitored.

At a hearing in US District Court for the Northern District of California, prosecutors argued that Xiaolang Zhang and Jizhong Chen should continue to be monitored because they present flight risks.

Federal prosecutors alleged Zhang worked on Apple's secretive self-driving car program Project Titan and took files related to the project before disclosing that he was going to work for a Chinese competitor. Federal agents arrested Zhang last year at the San Jose airport as he was about to board a flight for China.

Prosecutors allege Chen took from Apple more than 2,000 files containing "manuals, schematics, diagrams and photographs of computer screens showing pages in Apple's secure databases" — also from Project Titan – with intent to share them. Agents arrested him in January at a train station on his way to San Francisco International Airport for a trip to China.

The men were each charged with one count of criminal trade secrets theft and pleaded not guilty. They were released on bail shortly after their arrests and have been monitored since then.

Attorney Daniel Olmos, who represents the men, said Monday that both had family reasons to visit China and had shown no signs of violating their pre-trial conditions so far.

Assistant US Attorney Marissa Harris argued that if either man fled to China, it would be difficult if not impossible for federal officials to secure their extradition for a trial. Three Apple employees sat in the courtroom to support prosecutors, including Anthony DeMario, a strategic adviser to Apple's global security group and veteran of the US Central Intelligence Agency.

Harris read Apple's statement to US District Judge Edward J. Davila in San Jose, California.

"Apple's intellectual property is at the core of our innovation and growth," the statement said. "The defendants' continued participation in these proceedings is necessary to ensure a final determination of the facts, and we have deep concerns the defendants will not see this through if given the opportunity.

Olmos told Davila GPS monitoring was unnecessary to secure Zhang's appearance at trial.

"This is not an espionage case," Olmos said. The government "is not requesting detention, but they are requesting essentially indefinitely location monitoring."

Harris said Zhang's wife told federal agents that Zhang, who is a permanent US resident, attempted to flee to Canada when agents searched his home.

During that search, agents found a laptop at the bottom of a laundry hamper that they allege contained trade secrets about Ethernet technology from Zhang's prior employer, chip supplier Marvell Technology Group Ltd, according to court documents.

Chen, a US citizen who emigrated from China in 1991, listened to the proceedings through an interpreter. He has been under radiofrequency monitoring, which is less precise than GPS tracking.

Prosecutors allege that Chen is a flight risk in part because they found documents from several other former employers — including General Electric Co and Raytheon Co — at Chen's second residence in Maryland, where his wife and son live. Prosecutors said in court papers they found a 2011 document from Raytheon that they later determined was classified as "confidential," the lowest level of sensitivity in the US government system.

"This document contains information relating to Raytheon's work on the Patriot Missile program and was not (and is not) permitted to be maintained outside of Department of Defense secured locations," prosecutors wrote.

Olmos, the defense attorney, said it was not a file, but a single paper document "sitting in a box somewhere" in Chen's home.

Trial dates have not been scheduled. A hearing is scheduled for February.

Google parent company Alphabet announced in a press release Monday that scientist Frances Arnold would join the company's board of directors effective immediately. In a tweet, Alphabet CEO Sundar Pichai said that "Frances brings incredible academic and industry expertise" and that he looks forward to looking with her.

In the press release, Arnold said: "I've long admired Alphabet's commitment to technology and research, and to improving the lives of people around the world, and I'm excited to be a part of that."

Arnold currently works at the California Institute of Technology and received the Nobel Prize in Chemistry in 2018 for her work developing a novel method of bioengineering that is "used in hundreds of laboratories and companies that make everything from laundry detergents to biofuels to medicines," according to a press release from the school.

The move marks Pichai's first official move as Alphabet CEO, a role he recently stepped into when Google co-founders Larry Page and Sergey Brin announced their resignation as Alphabet CEO and president, respectively. Page and Brin both remain on Alphabet's board and maintain controlling shares of the company.

On Thursday, Bleacher Report is premiering a weekly game show for sports gamblers that will be filmed live at its studio in Caesars Palace's sportsbook in Las Vegas.

Players in the "B/R Betting Game Show" will try to predict the outcome of athletic contests and other challenges for a chance to win cash prizes. It'll be hosted by a rotating cast of pro athletes and influencers, including ex-NFL player Chad Ochocinco, with a goal of creating moments that Bleacher Report can distribute on its app and social accounts throughout each week.

The game show, which is part of Bleacher Report's B/R Betting vertical, is one of the ways the digital sports media brand, geared toward millennials and Generation Z, is trying to get gamblers to spend more time within its app and website, and engaging with its social accounts. 

The plan to woo casual sports bettors — a group that is growing as more US states move to legalize sports gambling — is one piece of a broader strategy to expand Bleacher Report's reach and revenue going in 2020, and close the gap with some of its larger competitors like ESPN, CEO Howard Mittman, who took on the job in February, told Business Insider. 

"We see significant opportunity not only to continue to elevate ourselves up from the broader publishing set, but to really start knocking on the door in terms of becoming a real, true challenger brand unlike anything else that we can see around the landscape of sports media," Mittman said.

The digital media brand, which was acquired by Turner in 2012 and is now part of AT&T's WarnerMedia, will become the main digital hub for all of Turner Sports, beginning in 2020. Bleacher Report's main app will also be combined with its subscription-streaming offshoot, B/R Live, in the next 12 to 18 months.

Sports gamblers are growing opportunity for the broadening Bleacher Report, as well as other sports media brands

At the same time, Bleacher Report is expanding its breadth of gambling content, which is housed in one of its verticals, B/R Betting. It aims to get its audience of young, mostly 21- to 34-year-old sports fans, more engaged with its app and website.

The company found through surveys that 82% of its users are current bettors or interested in betting. Bettors can be lucrative audiences. Gamblers are five times more engaged within Bleacher Report's app than non-bettors, the company said.

That's more eyeballs that Bleacher Report can serve ads to and generate other revenue from, such as fees for referring sports fans to sportsbooks or betting platforms. Affiliate fees are not a significant part of Bleacher Report's revenue today, Mittman said, but the company could explore the opportunity.

The opportunity around sports gambling comes at a time when many digital media startups are consolidating to survive, as Business Insider recently reported.

Bleacher Report isn't the only digital media brand vying to be advertising's gateway to sports gamblers. Other digital media brands like Barstool Sports are making plays for betting audiences, as are traditional media companies like Fox, which partnered with a Canadian bookmaker to launch a sportsbook this year.

Bleacher Report is trying to draw gamblers in with fun, entertaining stories

Mittman said Bleacher Report is taking a slightly different approach from its competitors. It's not pursuing hardcore gamblers, or "sharps." It's interested in the "other 95%" of sports fans of gambling age who bet or might be interested in betting recreationally, Mittman said.

Bleacher Report is courting them on social media and its own platforms with content, like the "B/R Gaming Show," that is meant to entertain more than gambling shows that are loaded with stats and betting picks. 

"It's part of the evolution of how we see betting content continuing to develop to entertain younger consumers," Mittman said. "There's a fun, interactive element to what we're doing that brings sports betting to life, pulls them into our ecosystem, and then gives us a chance to expose them to all of the different, even sometimes more traditional, kind of content experiences that we offer."

Bleacher Report is also exploring narratives that center on unique characters, celebrities, or talent, like a November video about a man who bet millions on the Houston Astros during the 2019 World Series. The team lost.

In February, around the time that Mittman was promoted to CEO, Bleacher Report announced a partnership with Caesars Palace to launch a studio at its Las Vegas sportsbook, and share betting data that the media brand can use in its content. 

"It was an evolution of the sports betting content that we had already been creating and a significant advancement of it," Mittman said.

Bleacher Report has found some early success with the betting vertical

Bleacher Report has found some early success with its betting vertical.

The company shared a few stats: 

Mittman also said B/R betting has been a "meaningful contributor" to the company's overall revenue.

The company declined to reveal its revenue. Sahil Patel reported for Digiday in June that Bleacher Report, overall, was on track to grow in 2019 its revenue by 50% to $200 million. 

"We are significantly, in terms of revenue, behind ESPN, although we out punch them relative to social scale and engagement," Mittman said of Bleacher Report as a whole.

Next year, for Bleacher Report and Turner Sports, will be about trying to alter that equation as much as possible, with a little help from sports betting.

Away's cofounder Steph Korey is out as CEO of Away, following an explosive report into the company's culture. 

On Monday, the travel brand announced it hired the Lululemon executive Stuart Haselden as the company's new CEO. Korey will assume the role of executive chairman. Haselden will also join Korey and cofounder Jen Rubio on Away's board of directors. 

The news follows an investigation that The Verge published last week. The investigation cited 14 former employees who described a "cutthroat culture" at the company, in which Korey demanded workers work almost constantly and pressured them against taking time off. 

In a press release on Monday, Rubio and Korey framed Haselden's hiring as part of the company's plan for long-term growth. 

"With the immense growth of the Away brand, the complexities of our business have evolved as well," Rubio, Away's president and chief brand officer, said in a statement. 

"Stuart's impressive track record in strategically scaling retail businesses and teams offers invaluable expertise as Away enters its next phase of growth," Korey said in a statement. "I believe Stuart's leadership, supported by other key executives who have joined Away this year, will have an enormous impact on our business, community, and culture, and we look forward to learning from his depth of experience."

Last week, Korey apologized for her behavior while leading Away after the publication of The Verge's investigation.

"I can imagine how people felt reading those messages from the past, because I was appalled to read them myself. I am sincerely sorry for what I said and how I said it," Korey said in a statement emailed to Business Insider. "It was wrong, plain and simple."

Away told The Wall Street Journal that the company has been searching for a new CEO since spring. Haselden will start his role as CEO of Away on January 13. 

It's tough to capture the world's tiniest organisms in photos, but it's even tougher to capture footage them in action. After awarding the best microscope photography of 2019, Nikon has revealed the winners of a second competition, called Nikon Small World in Motion.

The contest was launched in 2012 to showcase time-lapse photography or short clips taken through a microscope. This year's winning videos reveal how life looks beyond what the naked eye can see, giving rare glimpses into the bizarre and fascinating ways microorganisms transform and interact. 

Sometimes, those interactions are vicious, as the 2019 selection shows: The best microscope videos of the year include a parasite emerging from its dead host and two "water bears" eating a member of their own kind.

Take a look. 

Microsoft has finally broken its silence about Amazon's lawsuit challenging the company's victory in a $10 billion cloud computing contract with the Pentagon, saying the bidding process was fair and Microsoft won on its own merits.

"We have confidence in the qualified staff at the Department of Defense, and we believe the facts will show they ran a detailed, thorough and fair process in determining the needs of the warfighter were best met by Microsoft," a Microsoft spokesperson said in a statement. "We've worked hard to continually innovate over the past two years to create better, differentiated offerings for our customer."

The Department of Defense on October 25 selected Microsoft for the controversial contract known as the Joint Enterprise Defense Infrastructure, or JEDI, contract worth as much as $10 billion over the next decade to move the agency's sensitive data to the cloud.

Amazon is challenging the decision in the US Court of Federal Claims and, in documents made public on Monday, said President Donald Trump led "repeated public and behind-the-scenes attacks" to ensure the company didn't get the contract, in order to harm CEO Jeff Bezos, his "perceived political enemy."

Amazon was considered by some to be a shoo-in for the contract because of the company's market-dominant position and high security clearance compared to competitors including Microsoft.

Since the decision, Amazon has repeatedly touted what it believes is its own "technical superiority" over Microsoft, including in a meeting with employees last month during which AWS CEO Andy Jassy said Amazon's technology is at least two years ahead of Microsoft, according to a recording obtained by Business Insider,

Not all analysts agree. Wedbush Securities analyst Dan Ives believes Microsoft won based on its technology and lobbying, and on Monday said Amazon's lawsuit is just "noise" that won't affect Microsoft's win of the contract.

Updates are an important part of keeping your PS4 in working order. They include bug fixes, new features, security updates, and more. In short, you should make sure your console always installs the latest system updates. 

Usually, this happens automatically, but sometimes glitches can prevent that from happening. 

If your PS4 won't update, here's how to fix the issue.

Check out the products mentioned in this article:

PlayStation 4 (From $299.99 at Best Buy)

How to make sure your PS4 updates

Manually install the update

If your PS4 won't install an update automatically, you may be able to force the update to install manually. 

Ideally, that'll also break the cycle of auto-updates not working, and future system updates will install automatically as intended.