live here three in san francisco, this is "bloomberg west." i am cory johnson. just ahead, oracle buying microsystems for $5.3 billion which is their largest acquisition since the 2010 purchase of sun microsystems. they make software and hardware for the hospitality industry. they are hoping to boost the oracle sales growth which is been rough for a living quarters. google glasses going high style to bid -- to attract more customers. a-porter are selling eyewear

that is designed by diane von furstenberg. cost $1800 which is more than the standard version. the roar of the harley davidson and you will be more like a hum with the first electric harley. the company will be taking a few dozen of these on a tour of the u.s. and riders will test drive the bikes and get some feedback back to the company so harley will create something new. to buystrikes a deal microsystems. the software giant is under pressure to boost sales growth. oracle paid $5.3 billion for the maryland-based company. it's a point-of-sale system for hotels and restaurants and retailers. oracle has been talking to these

guys along times, six years. that deal fell through but this one is a big deal, the biggest purchase in 2010. -- the microtem sun system fell through -- was that for oracle. deal.s an interesting it's not just a software company. isexactly right, about 2/3 services and 20% is hardware and 10% is software. it's really about the push into the retail market. oracle had an interest in the vertical market and here is the deal. >> what do you make of why they are looking at this business right now? oracle ands like microsoft, all of them are trying to take their code applications and move it to the cloud. stuff like this only helps the

oracle portfolio of applications they can move to the cloud and also they already have a retail suite out there and was probably missing some of the front-end systems. when you take a full and solution for vertical and move it to the cloud, were actually being more aggressive as you compete with the likes of other companies. that this isesting will make asracle a creative right off, adding to their revenues. >> when you look at the company, it is definitely creative. when you look at revenue, it's about $1.3 billion per year in revenue. the margins are more like 20% so not 45-50% like oracle but i'm assuming oracle will move those up owing forward. -- going forward.

the customer base is pretty significant could be an opportunity for oracle. >> do you think when they look at this deal that they see a particular type of information they will be getting from the retail applications like restaurants and the hotels/ it ie way oracle looks at think -- the three verticals are financials, it's an important vertical am a telecom, we have seen for deals in that area, and now retail. i want someone with relationships in that area, some type of proprietary technology in that area and they can sell their existing solutions. this withat a lot of competitors in the retail area. this looks like a cheap way for oracle to get into that business. >> one of the things that is being talked about now is big data and analytics.

retail vertical is one of the most prime candidates to be primed for big data and analytics. if oracle is going to make sure to tell the world they will be good about the cloud and big data analytics, retail vertical is a good way to start. it struck me that there is something more to this than just software, just finding a vertical in software. is the hardware critical here? business require the hardware to get into the restaurants and hotels? >> the most important is sass in this particular can -- transaction. software as a service. business ised important because oracle is making a big push. it is growing double digits. it's a billion-dollar business. i hope to get half their

customer base on engineered systems and today is less than 3000. it could be 200,000 systems. >> what is engineered systems? youou got a database and want hardware to support that for the lowest cost. it's accommodation of server, storage network that operates forms of the database with big data. oracle is making a big push in this market. once you get someone interested in your database and applications come you can start to sell them engineered systems and i think that's a big opportunity. >> so you've got thios sun offering as the back of the system and the software in the middle of it and now with micros you have a front and for hotels and restaurants and other retailers so they can sell straight through a company like a retailer to their product line? >> exactly, it's something you would never have an microtechnology and you start to

sell your existing technology into it and that's the opportunity and that's why the focus on verticals. also meanuld probably lower margins on the front and end the deep backend. things is we look at they don't care what happens in the short term on the margins. they bought sun and that damaged the margins. if you're going to win this fight for application and sas applications, you need a full suitehether it is in retail, financls or other verticals. where ever you find the holes, you need to plug them in go out for it. >> maybe it did not bother them but it might bother other stores. thank you very much to both of you. google is addingdropcam to its

portfolio and we will have a board member with us what they are planning to do next with this acquisition and you can catch us on bloomberg television, streaming on your phone, your tablet, and bloomberg.com and now available on apple tv and amazon fire. ♪

>> i am cory johnson. google glasses trying to expand thebusiness by taking criticized glasses to a stylish direction with new frames designed by diane von furstenberg. shades, fromeight rter fornd net-a-po $1800. google signed a deal with ray-ban and others. thermostats,to

google labs plans to acquire the but theys -- netlabs are acquiringdropcam. how will nest and google and dropcam work together? what does the deal mean for nest and dropcam? it'sr google and nestlabs, the addition of the best-of-breed products in home monitoring and home video that they don't have. googlepcam, nest and bring tremendous resources to help them expand their footprint. wast's sort of like nest the shocker for google. our nest and dropcam

complementary? >> in the sense that both companies have a similar design philosophy. easy tose incredibly use -- think about the smartphone -- easy to use, that kind of design philosophy in the products they build. you can imagine these expanding into a whole set of products for the home consumer that are very poor userthan the old interface products we have a cost -- we have become accustomed to. >> what kind of things can we imagine from this? from home video to home security. think about all the appliances. machine thathing uses water-based on the size how you have in their or dirty your close our and the same for a dishwasher and devices like a hot water heater or a furnace that tell you when they need service before they break, those kind of things. >> made the devices that work

when they want you to instead of complicated interfaces. >> exactly, or devices that learn your habits. one of the things nest has innovated is the idea of the thermostat that saves you energy and understands when you are not home and turns the heat down. >> it can physically tell when you walk into the room. >> precisely. >> to me, that's the interesting thing with google. they want to sell devices in the homes? is a great business and selling devices in the home and one of the most interesting is it's not dropcam just the devices. it's a fantastic hd camera that you can connect with your mobile omsice and easily pans and zo but it in the back into a cloud dvr sarasota there is a continuing stream there. the data from that can be used

for other things. my vision of the connected home as you have these devices that can indicate with cloud services that communicate with each other. when you leave home, your dropcam begins recording and looking for people it does not recognize it might break into your house. your nest thermostat might respond when you leave him by turning the temperature down. all these devices start to work in concert with each other. >> dropcam works on low-power bluetooth. the real secret is built into every new dropcam, there is a otheroth hub that devices can lock your doors and other security systems can all be run off of that thing area >> absolutely, the video sent over wi-fi but there is a bluetooth chip in there. any device in your home which has bluetooth le could communicate and use that dropcam as a central point to transfer data.

>> google has bought their way into any centerpoint of bluetooth le which is a big thing. correct, i think the home will be the next big platform. we have seen smartphones in the last few years become probably the most disruptive new hardware platform. i think the home will become a super important platform as well. >> why now? >> we have these very cheap sensors and we got ubiquitous wi-fi connectivity. i think it was very hard before we had internet connectivity and high-bandwidth connections to have these devices streaming. there will be more connected devices in the internet of things than there are people on the planet. >> when did you invest in the deal? >> at the end of 2011 and closed in early 2012. >> that was a fast turnaround.

i think venture capital is probably the place to the because of the fast turnaround and great leverage in great returns. >> it's a great time right now to be investing. it's not always this way. we plan on being long and patient investors in the company. we have seen a lot of acquisition activity lately. >> let's do monday morning quarterbacking -- what did you see in this deal that represented opportunity? >> this was borne of frustration and trying to set up an ip camera which was very difficult and i said there has to be a better way so when i ran into the founders of dropcam and saw how easy to use the setup was, i said this is the product. i really believe with it being cheap enough and easy enough to people will have the same experience. apple-like of this ease of use that turned me onto it. >> that was the board member

from menlove adventures. we will go inside the home sharing battle for new york city next on "bloomberg west," on bloomberg television, streaming on your phone, your tablet, and bloomberg.com and now available on apple tv and amazon fire. ♪

"bloombergback to west." shares of the controversial

wireless chip division , a federal judge threw out a patent case that they want against qualcomm saying there was not enough evidence to support the jury's verdict. parkervision accuse qualcomm of infringing on patents. this has been going on forever. this is about converting signals to higher frequencies and lower frequencies. it's important stuff for mobile chips and parkervision has tried to assert these rights for a long time. biggest market is one of the most difficult. new york city landlords are waging an intense battle waging -- questioning the legality of them operating in new york. they've countered by spending 100 $20,000 on lobbying groups in new york state and another 176,000 dollars in at space in the city. they recently closed 450 million

dollar round of funding for a $10 billion valuation for the private company. the airbnb fight is subject to the latest addition of an interesting story. i am joined by felix gillette, the author of this piece. there is something about housing in new york city that is so visceral. this gets right at it. >> everything about housing in new york is a totalmess and it's always chaotic. in that sense, it's not too surprising that airbnb's biggest battle has broken out. it's a little awkward for the company because it's happening right here in wall street's backyard at a time when they are presumably preparing for an ipo sometime in the near future. >> does this get to the fundamental value proposition? >> yeah, totally, it will be offered when they have to put in their prospectus the risk factors. they might say that one risk is the whole thing might be a legal in our biggest market -- might

be illegal in our biggest market. do --hey are trying to the head of their public policy -- he was based in washington, d.c. and as the fight is materialized in new york, they shifted him to new york city. this is where the fight is being waged. i think it will be tricky. they would like to have everyone believe that it is similar to in on most of the pushback in new york has been coming from incumbent competitors. is it'sound fascinating not really the case that it's the hotel industry that is their primary antagonist. it's people in the real estate industry, the building owners, the landlord's come of the managers that are upset about this. historyork has a long of the abusive landlords, the abuse of some -- of slumlords with so many laws written around

that not just to protect people renting and people who don't have the means to sue but also to protect the nature of the community. they would have people of different incomes and artists living next to people of finance so communities keep their color. is there a notion that the fundamental laws of how rent and rent control works in new york city might change to accommodate airbnb? >> that is there hope. their primary goal in new york is to amend the 2010 law that basically prohibits people from renting out their apartments or homes for less than dirty days unless they are -- for less than 30 days unless they are there. they want to amend it so that people can do that for less than 30 days of its their primary or secondary residence. they have two bills in albany that would amend the law in their favor. there is a lot of people that oppose that amendment. primarily, a lot of the issue comes down to the fact that airbnb has been so good about

establishing trust between the guests and the hosts. it is such a success but it used to be that people thought was crazy. who would trust a stranger to live in a house? the system has been very effective about letting users and hosts review each other. part of the problem is that the landlords and the building owners and co-op people don't have any say in that system. >> this way renters can raise the effective value of their places because new york apartments are not cheap enough. thank you very much. >> my pleasure. >> harley davidson is going electric just like bob dylan did a while back and we will show you the new electric ike next on "bloomberg west." ♪ >> 26 minutes after the hour which means bloomberg tv is "on the markets."

the markets are a little bit lower. chinese manufacturing is at a seven month high. let's get you caught up with where stocks are trading. we are back in 20. ♪

>> you are watching "bloomberg west." the business of solar is increasingly moving away from commercial tort residential. -- toward residential. the nose -- the mosaic founder joins me. the history of your business is interesting because the solar is this is interesting but you have a new model which is -- >> lending for people to go solar on their own home. it is peer-to-peer lending where they can borrow money from other people and get a 20 year loan with a low interest rate and put solar on their home for no money

down. whom does this have the strongest appeal? >> people want to save money on their utility bills. many people across the country now can save money from day one and pay less on their loan payments than they would for the utility bills that they are cutting by going solar. what kind of investment return are we talking about for people providing this? >> we are still seeing in the four percent-seven percent range across the platform. >> risk? >> people can diversify across the range of investment products so before we were just doing commercial solar investments and now people can diversify across a whole rage of individual home loans. you don't new for use know what the profile is that what you imagine it will be? >> it's hard to characterize now. solar city did a securitization recently and they were projecting very low annual

.2%.lts like >> how can you imagine it so low? >> because people are saving on their utility bills of it they stop paying for their solar loan, they are paying more than they would have had to otherwise. it's a net savings on like other consumer lending. >> one of the criticisms of solar city in particular is there was the notion of the duration of the panels themselves and how long they would last and what the warranties would be because some of the providers of the solar go for longer but the warranty goes away when the company those away. you must have figured that out. >> you think about most of the panels have 25 year warranties. the inverters have anywhere from 12-25 you're warranties. many times -- >> the inverters are what the solar panel plugs into?

>> that's right. installers are stepping up and saying we will provide a performance guarantee for the whole system for the life of the loan or the lease. that is increasingly the way it is happening. >> why are they doing that? >> because they need to compete with what people's expectations are for electricity. people don't want to think about if the solar goes down that they need to fix it. they want to sign a contract that says i will get 20 years of solar power no matter what. if it goes down, someone will be there. >> you guys use things like social media -- it's a capitalist venture and you are using interesting things to make this happen. you did a national day of solar action on saturday? what was that about? >> we had hundreds of thousands of tweets and facebook posts. the president treated and posted

on facebook. the president of america pointed out that people should put solar on which has become more accessible. . the president pointed out that the cost of solar has come down 75% in the last six years. >> is it that much? >> it's amazing. >> i bought the stuff about four years ago and the price is 75% lower, i would feel like a rube. the subsidies have come off quite a bit. how do the subsidies work? >> the subsidies have worked. it's important to point out that fossil fuels globally still get 20 five times the subsidies that clean energy technology gets. we are still in the early stages of the clean energy development and we still need that support but it has brought the cost down enormously as we have gotten economy to scale. >> they worked in doing what? >> in getting this technology cost competitive with fossil

fuels, that's the key thing that has happened and that's why we reached this tipping point, or most people, it is cheaper to power your lights with clean energy than it is with dirty energy. >> that was not true six years ago? >> not at all. >> very interesting stuff, mosaic resident, thank you for being with us. from solar power to battery power, going electric at harley davidson. they have a test of a battery-powered bike. the electric motorcycle is not for sale but they are available to test drive. harley davidson hopes this will give the company some kind of customer feedback to figure out what kind of electric bike, if any, to bring to market. stephanie ruhle and erik schatzker spoke with the harley-davidson ceo and asked him why make an electric bike? we have a lot of v-twins on

the road and have been in that business for years with when we think about the future and we think about urban riders, we think about riding in cities and those kinds of things, it makes perfect sense. >> somebody will buy this instead of a vespa? >> i don't know about that but it's an alternative. it's a nimble ride. it's a great ride. it's particularly good for urban areas where there is lots of traffic. >> is the goal to bring in a new demographic? when i think about a traditional harley davidson customer, they want the fat , the bold, the loudohg. this is not that so you are you trying to change the taste of the existing customer? >> no, first of all, we love our traditional customers. they are who made our company what it is today. otheris a whole demographic with younger writers and female riders that we are trying to appeal to not only

with electric bike but other bikes we are developing that are more suitable to those outreach demographics. >> so much of what makes harley is the brand. people identify with the brand so whether they are looking at this live wire bike or some of the new street liquid cooled bikes you are making which are quite different from a traditional hog, don't you run the risk of either diluting the alienatingtentially the folks who still make up the very vast majority of your sales? >> we have to be very careful about the brand because of what it stands for. the look, sound, and feel of a harley davidson. the styling, the look, the sound. if you go out on the highway on this bike and ride it, this thing has a very distinct sound to it. it's like a jet engine. we were very careful on how we designed the electrification to make that sound. >> what ultimately stands

between you and making -- expanding the range and making this bike more appealing to a broader number of people? is it the battery technology? >> that is part of it. >> have you talked to elon musk? >> i haven't personally but i think our folks are certainly investigating how we work with folks like tesla and others to make sure we have leading-edge technology and make the very best bike possible. >> tesla and others, interesting. the harley-davidson ceo. is known for animated characters but the studio is also pushing technology boundaries behind the scenes and we will take a look at the software they developed with intel to bring dragons to life on the big screen. maybe not really to life but it looks like they did. you can watch us on bloomberg television, streaming on your phone, your tablet, and bloomberg.com and now available on apple tv and amazon fire. ♪

>> that was dreamworks animation," how to train your dragon2," the film took $25 million this weekend. brings back2 familiar characters, dreamworks animation took a different behind the scenes approach to the sequel. got to check all that out with jeffrey katzenberg. he calls it a game changing technology. they have always been

thinking about the next big thing they can do and technology. they have generated more than 170 million dollars at the box office and would like to talk about the end product. in this case, what happened behind the scenes was fascinating with dreamworks and intel working together. down to breakfast thinking all was right with the world and i get -- >> we need to talk. >> this is the main character in "how to train your dragon2." when bringing hick up to life in the first movie, dreamworks use this software called emo but making changes to that time in rendering the changes took more time. they rolled out new software called apollo. the changes are speedy and rendering happens in real-time. >> the amazing thing is we have built the software so it does not slow us down. it's always up to speed and is the latest and greatest. >> dreamworks is known for its

tech savvy approach for partnering with netflix to its youtube strategy. the animators love pushing limits of technology, the company's aging software was not keeping up with computing power. apollo was created in partnership with intel over a five-year span. the dreamworks chief technology officer says animators are more agile and the studio can reduce production costs. >> we can play all those games and we are in terms of the budgets of the movies saving tens of billions of dollars and the quality which you can see in "how to train your dragon2." >> this movie required 90 million hours of work to render. that's like running a computer for 10,000 273 years. it also required 398 terabytes to 25,742, equivalent mobile phones with 16 gigs of storage. all that technology shows up in complicated characters like the bewilderedbeast. >> the size of the creature on

screen and see it in real time -- a asked if i can change it quickly. it normally would have taken me a couple of days prior. >> as for intel, the engineers walk away from these projects with a boatload of information. >> we can actually take it back and understand how in our own about how ours processors are developed, we can make them better. >> along with using apollo in future films, dreamworks may make the technology available to other industries. >> other business sectors create images for various purposes and design products in a visual way. all of those processes are in harmony. >> that's fairly amazing, more technology than it takes to render me. >> [laughter] there you go.

it's interesting. and ourioned "shrek" expectations of got more dramatic over the years as more players have come into this market, more players have wowed with the cgi technology. dreamworks was getting to a place where they can only go so far as to what the current system allowed them to do. they could not take full advantage of the computing power. as a flylso a story through the clouds. they are about that allowed and redesigning your software to take advantage of that cu can draw these things in real time and have them rendered and make the changes you want to make these phones look better. >> jon erlichman, thank you much. all have our own personal 3-d printed robots in the future? atoubt it but a programmer intel think so, next.

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welcome back to "bloomberg west." president obama is about to speak and we will get to those comments right away. he is taking the stage right now, let's listen in. >> thank you, everybody. thank you. [applause] thank you. this crowd looks fired up. [applause] everybody have a seat, have a seat, have a seat. you look like you have been busy. [applause] i know that's right. i know that's right. good afternoon, everybody.

have a seat, have a seat, have a seat. i love you back. [applause] i do. welcome to the white house summit on working families. [applause] and thanks all of you for joining us. you, youat for most of are taking time off work or family or both to be here. and i know that's a sacrifice and i know juggling schedules can be tough. in fact, that's one of the reasons we are here today. cohosts, thank our secretary of labor, tom perez, give him a big round of applause. [applause] in andl as mira pand everyone at the center of american progress for all the work they did. [applause] thanks as well to all the members of congress for participating especially nancy

pelosi and the members of the democratic women's caucus. [applause] and a longtime friend and champion of families, and women and veterans, connie milstein, we could not have pulled this off without her great assistance. [applause] so, i just walked over to ipotle's for lunch. i cause a lot of havoc as you might expect. it had been a while since i had bowleasonable b --urroti and it was good but i went there with four new buddies of mine. is a father of a four-year-old and a two-month-old who has worked with his wife to come up with a flexible plan where he works three or four days per week and

she works three or four days per ,eek and the reason is because as roger put it, he thinks it's toortant that he is able bond with these kids just as much as his wife is. lisa, you just heard from, who had twins who were prematurely company wasause her supportive, she was able to not just thrive and watch her kids grow up but she has also been able to be promoted and continue to succeed in her company without being on a slower track while maintaining that life-family balance. [applause] which is terrific, worth applauding. york worksg from new at a nursing home and she's got older children. she was most interested in talking about the fact that when curvature of the

spine, she had health care she could count on otherwise there was no way she could deal with it. on the job ares good enough that she could use some vacation time when he had to go to the doctor. denver, she'som got a fan club here. [applause] thatalked about the fact on her job, it has been more challenging -- her kids are older and she's going back to school and it's wonderful she is taking some classes with her children. they are helping to explain math to her. [laughter] on the other hand, she's got an aging parent. doctor,had to go to the they don't have a policy of paid family leave and since it's hard making ends meet in the first place, her dad had to end up getting on a bus for i surgery and come back on his own because she could not afford to take the time off. each of these folks come from -- >> that was president obama

talking and we will turn to thebwest byte. we have the intel futurist with us. what is the bwest byte? >> for me, it's zero. >> which is? 2020,we approach the year the size of meaningful computational power, the size of the chip[, starts to approach zero net means we can turn anything into computer. imagine the possibilities when computation gets that small, we can turn my jacket into a computer or this chair into a computer and we can turn my body into a computer. it fundamentally changes all the questions we ask ourselves. >> what is it mean? what is it mean at chair that is a computer? >> it means you can do anything.

for decades in high-tech, we asked if we can do something and make a laptop small enough to fit into somebody's pocket? can i make a desktop to fit into someone's lap but we have to ask ourselves if we can do it but also what we want to do and why? you can turn a chair into the computer but why? it kind of changes our whole mindset around businesses we build out of the effect that technology has and we will essentially be living in a world where we are surrounded by computational power. >> is it about the computation or is it about gathering information to be computed and laid out somewhere else? >> it's about both. it's about making things smart so the moment you can bring competition of power to something, you can make it smart and he can do things for you. >> brian david johnson, cool stuff indeed. you can get the latest headlines all the time on your phone which is a computational power and tablet at bloomberg.com and we

will see you all tomorrow. thanks a lot. ♪

bloomberg world headquarters in new york, i am mark crumpton. ."is is "number bottom line today, john kerry meets with iraqi leaders in baghdad reedit and then a look at puerto rico's tax benefits and how it draws in investors. and a woman who took contact lenses to the moon. ♪ to our viewers here in the united states and those of you joining us from around the world, welcome, we have full coverage of the sto