Your daily briefing on the news
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At the Open Infrastructure Summit, which was previously known as the OpenStack Summit, Canonical founder Mark Shuttleworth used his keynote to talk about the state of open-source foundations — and what often feels like the increasing competition between them. “I know for a fact that nobody asked to replace dueling vendors with dueling foundations,” he said. “Nobody asked for that.”
He then put a point on this, saying, “what’s the difference between a vendor that only promotes the ideas that are in its own interest and a foundation that does the same thing. Or worse, a foundation that will only represent projects that it’s paid to represent.”
Somewhat uncharacteristically, Shuttleworth didn’t say which foundations he was talking about, but since there are really only two foundations that fit the bill here, it’s pretty clear that he was talking about the OpenStack Foundation and the Linux Foundation — and maybe more precisely the Cloud Native Computing Foundation, the home of the incredibly popular Kubernetes project.
It turns out, that’s only part of his misgivings about the current state of open-source foundations, though. I sat down with Shuttleworth after his keynote to discuss his comments, as well as Canonical’s announcements around open infrastructure.
One thing that’s worth noting at the outset is that the OpenStack Foundation is using this event to highlight that fact that it has now brought in more new open infrastructure projects outside of the core OpenStack software, with two of them graduating from their pilot phase. Shuttleworth, who has made big bets on OpenStack in the past and is seeing a lot of interest from customers, is not a fan. Canonical, it’s worth noting, is also a major sponsor of the OpenStack Foundation. He, however, believes, the foundation should focus on the core OpenStack project.
“We’re busy deploying 27 OpenStack clouds — that’s more than double the run rate last year,” he said. “OpenStack is important. It’s very complicated and hard. And a lot of our focus has been on making it simpler and cleaner, despite the efforts of those around us in this community. But I believe in it. I think that if you need large-scale, multi-tenant virtualization infrastructure, it’s the best game in town. But it has problems. It needs focus. I’m super committed to that. And I worry about people losing their focus because something newer and shinier has shown up.”
To clarify that, I asked him if he essentially believes that the OpenStack Foundation is making a mistake by trying to be all things infrastructure. “Yes, absolutely,” he said. “At the end of the day, I think there are some projects that this community is famous for. They need focus, they need attention, right? It’s very hard to argue that they will get focus and attention when you’re launching a ton of other things that nobody’s ever heard of, right? Why are you launching those things? Who is behind those decisions? Is it a money question as well? Those are all fair questions to ask.”
He doesn’t believe all of the blame should fall on the Foundation leadership, though. “I think these guys are trying really hard. I think the common characterization that it was hapless isn’t helpful and isn’t accurate. We’re trying to figure stuff out.” Shuttleworth indeed doesn’t believe the leadership is hapless, something he stressed, but he clearly isn’t all that happy with the current path the OpenStack Foundation is on either.
The Foundation, of course, doesn’t agree. As OpenStack Foundation COO Mark Collier told me, the organization remains as committed to OpenStack as ever. “The Foundation, the board, the community, the staff — we’ve never been more committed to OpenStack,” he said. “If you look at the state of OpenStack, it’s one of the top-three most active open-source projects in the world right now […] There’s no wavering in our commitment to OpenStack.” He also noted that the other projects that are now part of the foundation are the kind of software that is helpful to OpenStack users. “These are efforts which are good for OpenStack,” he said. In addition, he stressed that the process of opening up the Foundation has been going on for more than two years, with the vast majority of the community (roughly 97 percent) voting in favor.
OpenStack board member Allison Randal echoed this. “Over the past few years, and a long series of strategic conversations, we realized that OpenStack doesn’t exist in a vacuum. OpenStack’s success depends on the success of a whole network of other open-source projects, including Linux distributions and dependencies like Python and hypervisors, but also on the success of other open infrastructure projects which our users are deploying together. The OpenStack community has learned a few things about successful open collaboration over the years, and we hope that sharing those lessons and offering a little support can help other open infrastructure projects succeed too. The rising tide of open source lifts all boats.”
As far as open-source foundations in general, he surely also doesn’t believe that it’s a good thing to have numerous foundations compete over projects. He argues that we’re still trying to figure out the role of open-source foundations and that we’re currently in a slightly awkward position because we’re still trying to determine how to best organize these foundations. “Open source in society is really interesting. And how we organize that in society is really interesting,” he said. “How we lead that, how we organize that is really interesting and there will be steps forward and steps backward. Foundations tweeting angrily at each other is not very presidential.”
He also challenged the notion that if you just put a project into a foundation, “everything gets better.” That’s too simplistic, he argues, because so much depends on the leadership of the foundation and how they define being open. “When you see foundations as nonprofit entities effectively arguing over who controls the more important toys, I don’t think that’s serving users.”
When I asked him whether he thinks some foundations are doing a better job than others, he essentially declined to comment. But he did say that he thinks the Linux Foundation is doing a good job with Linux, in large parts because it employs Linus Torvalds . “I think the technical leadership of a complex project that serves the needs of many organizations is best served that way and something that the OpenStack Foundation could learn from the Linux Foundation. I’d be much happier with my membership fees actually paying for thoughtful, independent leadership of the complexity of OpenStack rather than the sort of bizarre bun fights and stuffed ballots that we see today. For all the kumbaya, it flatly doesn’t work.” He believes that projects should have independent leaders who can make long-term plans. “Linus’ finger is a damn useful tool and it’s hard when everybody tries to get reelected. It’s easy to get outraged at Linus, but he’s doing a fucking good job, right?”
OpenStack, he believes, often lacks that kind of decisiveness because it tries to please everybody and attract more sponsors. “That’s perhaps the root cause,” he said, and it leads to too much “behind-the-scenes puppet mastering.”
In addition to our talk about foundations, Shuttleworth also noted that he believes the company is still on the path to an IPO. He’s obviously not committing to a time frame, but after a year of resetting in 2018, he argues that Canonical’s business is looking up. “We want to be north of $200 million in revenue and a decent growth rate and the right set of stories around the data center, around public cloud and IoT.” First, though, Canonical will do a growth equity round.
Rolling coverage of the latest economic and financial news as European businesses grow gloomier, but US growth figures cheer investors
- Latest: S&P 500 hits new record high
- Americans run down savings as spending outstrips income
- Eurozone confidence dips
- Introduction: Asia higher after US stocks hit new record
And finally, shares in Alphabet are dropping in after-hours trading after the owner of Google released its financial results.
Alphabet has missed revenue estimates, posting a 17% rise in sales to $36.3bn, below forecasts of $37.3bn.
Google parent Alphabet missed on revenue last quarter, reporting $36.34 billion vs. $37.33 estimated. It also reported $11.90 per share in Q1 2019, compared to the anticipated $10.61 https://t.co/Mdtt3Yn8mY pic.twitter.com/N5r0ozuXAj
Boom! America’s stock markets have closed at a new record peak, extending recent gains in another solid session.
Earlier today the boss of Boeing faced down questions about his future, following the two fatal 737 Max crashes that claimed 346 lives.
CEO Dennis Muilenburg dismissed calls for him to resign, saying:
“My clear intent is to continue to lead.”
“We know we have work to do to earn and re-earn that trust.”
WATCH: Boeing CEO Dennis Muilenburg holds a press conference, addressing 737 Max concerns. https://t.co/MKRgUkxGTg
Why are the US markets touching record highs again? A few factors are combining to keep shares at elevated levels, reversing last autumn’s sell-off.
1) First-quarter US GDP was stronger than expected, with headline growth of 3.2% per year (data released last Friday showed). That has eased recession fears.
Wall Street continues to head towards another record closing high tonight.
It’s a fairly quiet session, with the S&P 500 up 7.61 points at 2,947 – beating its previous intra-day high. The Nasdaq is also enjoying new heights, as 2019 continues to be a good year for tech firms.
Entertainment firm Disney is helping to push Wall Street higher, after its new Avengers movie absolutely smashed box office records.
The superhero mega-epic has taken $1.2bn (£929m) in global ticket sales over its first weekend, the first film to ever do a billion dollars so quickly.
European stock markets have ended the day with small gains across the board.
The cautiously optimistic mood we noted before the markets opened managed to last the day, with even Spain’s market closing a little higher despite political uncertainty following yesterday’s inconclusive election.
IMF chief Christine Lagarde is speaking right now at the Milken Global Conference in Los Angeles, on Brexit, trade wars, income inequality and her own future:
Lagarde: #Brexit risks have been handled by Bank of England’s Carney extremely well
Lagarde: CEOs are right to raise concerns about the viability of capitalism, but the question is what are we going to do about it? We can’t continue at these levels of inequality… oh, and without addressing the environment none of it matters anyway. #MIGlobal pic.twitter.com/LniG9ZLZaC
“Capitalism cannot continue without addressing the levels of inequality that we have in the world, @Lagarde” @MilkenInstitute FS Trust Barometer calls income inequality as #1 issue for industry to address. #trustbarometer
IMF’s Lagarde expects U.S. and China to reach agreement on trade issues – https://t.co/uoiI8UTL9J
Senior market analyst Fiona Cincotta of City Index also believes that America’s Federal Reserve is unlikely to raise interest rates soon, given recent economic data:
Wall Street opened modestly higher on Monday, boosted by the improved sentiment as a strong earning season continues and by supportive US inflation data. PCE, the Fed’s preferred measure of inflation showed that prices declined to 1.6% in April, down from a downwardly revised 1.7% in March and below the 1.7% forecast. The data comes following Friday’s mixed GDP data. A GDP release that saw the headline figure demonstrating impressive growth of 3.2%. However, this was driven principally by a large accumulation of unsold merchandise as the inventory component of the report was high and consumer spending noticeably weak.
Weak inflation and “the not quite as impressive as the headline figures suggest” GDP report are unlikely to encourage the Fed to take their finger off the pause button, even though other data across the month, such as retail sales, home sales and manufacturing have all seen improvements. According the CME Fed funds, the market is still pricing in a 65% probability of a rate cut before the end of the year. This is keeping the dollar under pressure ahead of the US Federal Reserve rate announcement on Wednesday. Meanwhile stocks are moving cautiously higher, with the S&P and Nasdaq reaching fresh all-time highs on hopes of lower rates for longer.
Wall Street has now pushed a little bit higher, with the S&P500 gaining 7 points or 0.25% to 2,946, a new all-time peak.
Toymaker Mattel is the top rise, up 6.5% – it posted better-than-expected results late last week. Manufacturing group Ingersoll Rand is close behind, following reports that it will sell a division to rival Gardner Denver.
Another UK mining firm, coal producer Bisichi, has angered one of its major shareholders by handing its managing director a chunky pay rise, despite protests over its pay policies.
Andrew Heller (son of the chairman Sir Michael Heller) picked up £1.073m last year. His basic salary rose from £450,000 to £495,000, while his bonus jumped from £350,000 to £500,000.
If last year’s remuneration package was indecent, this year’s really takes the biscuit. For executives who supposedly subscribe to The Quoted Companies Alliance (QCA) code, the Hellers seem to have gone out of their way to ignore shareholder concerns. Shareholders of 29.28% voted against last year’s package and we still haven’t heard a thing from the directors. Not only have they disregarded the code by not responding, they’ve driven a coach and horses through last year’s vote by increasing their remuneration package this year from £1.63m to £2.16m.
“We’ve come to expect this from a management team that clearly isn’t interested in the shareholders, only themselves. And this goes beyond remuneration. The QCA guidance that the company allegedly follows states that members should sit on the board for a maximum of 9 years. Outside of Sir Michael Heller, two others have been sitting on the board for over 18 years. How can the board claim to be independent when some of the members have been associated with the company for decades? For shareholders of Bisichi, and its parent company London and Associated Properties, this raises serious questions about the company’s management.”
Back in London, Ukranian mining company Ferrexpo has revealed that its chief financial officer cashed in more than £400,000 of shares last week….just before its share price plunged after its auditors quit.
My colleague Jasper Jolly explains:
Chris Mawe sold 150,000 shares worth a total of £402,045 on Thursday, hours before accounting firm Deloitte resigned as auditor following a scandal surrounding potential misappropriation of money paid by Ferrexpo to a charity called Blooming Land, which supports local social and health projects in Ukraine.
Deloitte’s resignation triggered a 28% fall in Ferrexpo’s share price on Friday. At the time of writing Ferrexpo’s share price was £2.07, about 23% below the £2.6803 price at which Mawe sold.
Ferrexpo finance chief sold £400,000 stake on eve of share slump https://t.co/oij7liOn29
But when you’re already at an all-time high, any increase is a new record 🙂
Wall Street has opened extremely cautiously, with shares very slightly higher:
Gregory Daco of Oxford Economics reckons today’s data shows the sugar rush of Donald Trump’s tax cuts has now faded:
Last month’s 0.9% jump in US consumer spending is the biggest increase in almost 10 years, Reuters points out.
Just in: Americans ate heavily into their savings last month to support their spending, as income growth slowed.
The surge in real personal spending in March suggests that consumption growth will be at least 3% annualised in the second quarter, after slowing sharply in the first quarter. But the Fed may be more concerned by the renewed weakness of core inflation, which slipped to only 1.6%…..
That will reinforce the concerns of several officials that inflation is still too low to be consistent with the 2% target and, if we’re right in expecting activity growth to slow over the course of this year, makes it all the more likely that the Fed will be seriously contemplating interest rate cuts before too long.
Happily, the latest eurozone money supply figures pain a more encouraging picture.
Money supply grew by 4.5% year-on-year in March, up from 4.2% in February, indicating a pick- up in activity. It’s the quickest increase since early 2018 – when the eurozone economy started to falter.
A thread on a reliable signal predicting an improvement in the Euro area economy and GDP. This signal has worked well over the past 18 months or so but mostly still gets ignored. (1/3)
ECB “Annual growth rate of narrower monetary aggregate M1, comprising currency in circulation and overnight deposits, increased to 7.4% in March from 6.6% in February. ” Over 2 months this is a 1.2% rise or a third of the previous decline (2/3)
This tends to affect the economy in ~3 months aka this summer. As to how much I would suggest a GDP growth rate of 0.3% to 0.4% replacing the 0.1% and 0.2% we have recently seen. Much more here https://t.co/Nd68YdJIGR (3/3)
It’s been a testing morning for Britain’s new Caledonian Sleeper trains, whose launch today has been punctuated by a battalion of glitches.
There’s really little to cheer in today’s European confidence report. Most of the main indicators worsened, suggesting the economy is still bogged down.
Eleswhere in the markets, music streaming site Spotify has hit a milestone — 100 million paying customers.
This has helped the company, which floated a year ago, to narrow its losses — handy as it embarks on an epic investment splurge in podcasting.
European stocks have now turned negative today, as today’s disappointing fall in industrial confidence disappoints investors.
Bloomberg’s William Horobin is concerned that Europe’s economy is faltering, as companies are buffeted by problems at home and abroad.
Here’s his take on the economic (lack of) confidence data for April:
Economic confidence in the euro area dropped for a 10th month in April to the lowest in more than two years, indicating the region may struggle to pick up from its recent slump.
The European Commission’s monthly survey showed an industrial morass is increasingly entrenched as companies continue to struggle with the global slowdown and homegrown difficulties, notably the upheaval in Germany’s car industry.
Europe’s economy doesn’t look in great shape…
This morning’s #eurozone data largely confirming what we already knew – sentiment remains poor & optimism continues to wane with the economy struggling
EURO AREA ECONOMIC CONFIDENCE AT 104 EST 105
EUROZONE APRIL FINAL CONSUMER CONFIDENCE -7.9 VS -7.9 PRELIM$EUR not impacted
#European Commission disappointingly report overall #economic sentiment in #Eurozone fell for 10th month running & markedly in April. #Consumer confidence down; sharp drop in #industrial sentiment & also declines in #retail & #construction. #Services sentiment stable
Analysts at currency firm BP Prime are concerned by the slide in eurozone industrial confidence this month:
Eurozone Industrial Sentiment plunges in April to -4.1 from previous -1.6 and more than expected -2.0, hinting the economic crisis in Europe is still far from being solved. But good news from the Services Sentiment, steady at 11.5, more than expected 11.1 @graemewearden
Across the wider EU, economic confidence fell notably in both the UK and Poland.
The European Commission explains:
The decline of the headline indicator for the EU (−1.5) reflects the strong deterioration of sentiment in the largest non-euro area EU economies, the UK (−1.5) and Poland (−3.7).
In line with the euro area, EU industry confidence took a blow and consumer sentiment weakened. While the deterioration of EU confidence in retail trade was less marked than in the euro area, EU confidence in construction worsened more strongly.
Newsflash: Eurozone economic sentiment has fallen for the 10th month in a row, highlighting the weakness of Europe’s recovery.
Figures from the European Commission show that managers across European industrial firms became more pessimistic this month. Retail bosses also grew more downbeat, dragging the EC’s measure of economic optimism down to a two-year low.
Manufacturers’ assessments of the past production deteriorated significantly, too, whereas there was some relief in the appraisals of export order books.
This reflected households’ more pessimistic expectations about their future financial situation and, in particular, the general economic situation, while their assessments of their past financial situation and their intentions to make major purchases remained broadly stable.
Spain’s stock market is bucking today’s trend, falling after Sunday’s general election delivered a hung parliament.
Shares in online grocery firm Ocado have dropped this morning, after it revealed that a recent serious fire at its Hampshire warehouse was caused by a robot catching fire.
The IMF has also spotted that social unrest is also rising in the Middle East – although we’re not back at Arab Spring levels of anger.
In several countries in the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region, social tensions are rising in the context of lower growth and reform fatigue, threatening macroeconomic stability. Such tensions may also derail much-needed reforms, potentially spilling over into conflict and further regional uncertainty
The International Monetary Fund has published a new report into the Middle East and central Asia, and it doesn’t make cheery reading for Tehran.
“The removal of waiver will affect more the recession.
A negative growth of 6% has an impact on poverty, social protection and also on jobs.”
European stock markets have begun the new week cautiously, led by a bounce in Italy.
Italian bank shares have jumped 1%, after S&P affirmed Italy’s BBB credit rating on Friday night.
#Italy 10y risk spread over Germany plunges to in relief rally after S&P affirms Italy rating at BBB, 2 notches above junk, after mkts closed on Friday. The agency maintained outlook negative. pic.twitter.com/pM92QFiT3o
China’s factories have bolstered confidence in the markets today, by reporting a pick-up in earnings.
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
For stock traders, it seems that the important catalysts are pointing higher: the US sees strong domestic growth, low inflation keeps the Fed at bay and could potentially trigger a rate cut so it seems that equities have nowhere to go but higher – at least in the short term.
Truth be told, we think that investors should employ a more cautious approach, with the US markets near record highs and 10-year yields dropping below 2.5%, suggesting that a selloff may be around the corner. In any case, market participants don’t seem to share our skepticism and equity futures in Europe and the US are pointing towards a positive opening bell.
Forty years ago Mrs Thatcher came to power, is the UK economy at another historic moment of change?