♪ selina: i'm selina wang in for emily chang. this is "the best of bloomberg technology." coming up, another big week for big tech earnings. apple and facebook reported. plus, big blue's big deal, ibm looks to the cloud with a $33 billion acquisition of red hat. plus, a hotly debated about issue here in san francisco,

funding for homeless services has had tech and the city divided. we speak to marc benioff. this week, we had a slew of earnings out of big tech. that includes apple on these thursday. numbers provided the first real insights into the company's new iphones. the real focus was on apple's fiscal first-quarter forecast covering the first holiday season when the 10 next is suspected to be a popular gift. we caught up with an analyst two analysts right after the numbers were announced. >> we had a great third-quarter. we are a little disappointed on the guidance a little bit. it looks to be perhaps indicating emerging-market or china slowdowns, and frankly, it is flat considering the

product mix they have. it is a flat forecast with zero growth in the iphone. >> a big change of focus is less on the number of iphones sold, than the average selling price which has continued to increase, but how much further can we juice the price from consumers? >> so far, there do not seem to be that many limits. if we look at their opportunities, they either find more customers, and most of the growth in the smartphone market is coming out of markets like indonesia, nigeria, and india, where the percentage of the population that can afford a device is high. you can increase revenue or you can sell more products. and certainly while the wearables and other devices are doing well, there is no other it product like a smartphone the consumers feel they have to have. >> horace, these numbers only show about two weeks of the nearest iphone sales. what do we know about how those

have performed so far? horace: the signals are good as far as what we are seeing in a sampling on the retail side, but the problem is we do not know if there will be some kind of structural issue in china. we also, as far as the pricing is concerned, yes, it has gone up, but there is quite a bit of mix out there. the iphone -- the newest 10r has not yet really shown us a lot of data. is the driver for china and other emerging markets. we are puzzle to me why not seeing this enthusiasm from guidance. >> we are seeing most of the faang stocks are down and apple was the last hope. report. the hope was that it might lift the tech sector.

what do you think now? we are seeing stocks down and investors seem underwhelmed. will this change later in the day? horace: it is hard to say on the whole market. through looking at apple alone, we are seeing a little less enthusiasm. we just had two days ago, new products, meat and potatoes products. these are middle of the market. the new air is a little pricier , but there is certainly a nice boost in terms of functionality, and not to see that reflected in guidance is disappointing. selina: tim cook gave an interview earlier with reuters citing some macroeconomic weakness in emerging markets. in china, there are obviously concerns the trade tensions could be leading to a dampening consumer sentiment. are we seeing that at all in the numbers? is there concern about this? julie: i think when you look at apple and their target audience , which does tend to be more affluent, even in markets like

china and india, which are some of the larger markets, i think even over the past 10-15 years, luxury goods have continued to do well. i would not expect to see much there,impact especially when you target an audience as fluid as those are. does not tend to have much of an impact. selina: cook just now on the call citing how strong the year was. best quarter. 10th anniversary of the app store. overall the quarter had the biggest quarterly growth spurt since 2016. i want to talk about the 10r. there seems to be a lot of investor sentiment around this. why all of the excitement when it could be potentially cannibalizing its more expensive products? horace: it is still a $750 minimum price. it is a significant rise over the $600 to $700 price point in the past for the leading products. we are seeing an uplift in the overall asp. product is also not

necessarily cannibalizing. it is interestingly positioned as a middle product in terms of screen size, which is what most people respond to with the initial impression. it is a very solid product. that is what surprises me a little bit. i'm saying there is a little disappointment, but let's not forget we are talking about projecting here about 77 million to units sold at an average of 78 million $800. so it is still going to be a great quarter, it is just not the growth we saw, 20% plus, in the top line. we see a flat top line going forward. again, i'm actually penciling in a little bit of growth on the ipad, a little growth on the mac as well. single digits, low single digits, but the big growth are services and other in the 30-20% range doing well and are continuing to do well, but those are based off and install base

which is based off of 1.3 billion devices out there. that is where the services growth is coming from. it is just that there is a question whether the 10r would be a home run or not. selina: julie, what is your take on that? excitement justified? will people upgrade for this cheaper-ish phone? julie: a lot of consumers still may have a six or seven or eight that have been waiting to upgrade to something more affordable to them. i think that is some of the target market we see them chasing. selina: i just want to point out, tim cook talking about the new iphones being the most advanced ever. they have seven nanometer chips and are ahead of the competition in technology. they are quoting reviews on how good some folks think they are. you were talking about services earlier. they actually came in under expectations. what is your take on that? is services not growing as much as expected? horace: it is doing pretty well, actually. my expectations were in line

with what we saw. we saw about 10 billion quarter. they are certainly ahead of schedule in terms of hitting their long-term targets at $50 billion per year run rate. that is going to be reached probably next year ahead of schedule. that is not a bad story at all. there were some one off revenues that were not present this year. overall, i do not think there is anything i can see negative about services right now. i think forecast right now, i am looking at about 18% growth, a little bit less than we saw in the past. selina: this week, we some more unrest at snap. the company has lost its vice president of sales after being promoted to chief is officer, but then the ceo evan spiegel changed his mind. we've been told that they went as far as referring the direct promotion, but two days later,

rescinded the offer. instead they hired a person who used to oversee sales at amazon. now, the latest executive to leave the platform is telling colleagues that she is leaving due to changes in team structure. coming up, facebook's user growth is its slowest since at least 2011. and revenue growth rates decline. we will dive into fourth-quarter results. if you like bloomberg, check us out on the radio. you can listen on bloomberg.com and in the u.s. on sirius xm. this is bloomberg. ♪

selina: the other big tech earnings of the week, facebook. the social network reported revenue that missed expectations, suggesting that

problems continue to take its toll on the company. yet mark zuckerberg still seems confident, stating, "our community and businesses grow quickly and now more than 2 billion people use one of our services every day. we are building the best services for private messaging and stories and there are huge opportunities ahead in video and commerce as well." we dug into their earnings report with our guests. >> i think it was pretty much what they predicted, which is reassuring in a sense. i think the question is, is that enough? but that is different question entirely. clearly they are still capable of being an extraordinarily profitable company, but we have to really ask will enthusiasm for using facebook and other properties continue to grow in developed countries like the u.s. and europe? selina: deborah, we have a pretty mixed bag of numbers here, but as david mentioned, profits are better than expected.

can you break down the numbers for us? what were some key highlights? >> for me, although the revenue was a miss, it was not a large miss. partialwas, i guess, a good sign. also, we saw return to a slight amount of growth in monthly active users in the important u.s. and canada market. we saw flatness in daily active users which is a bit more concerning, but on the monthly basis, we saw growth there. on the other hand, there was declines in the european monthly active users. again, probably due to gdpr fallouts. it's a mixed bag. it is about as good as you might have expected for a company under a lot of turmoil this year. selina: you were talking about the user growth. flat. pretty what is the significance to this? is this reassuring to investors

that things are not shrinking? debra: at least on a monthly basis they are not shrinking, and i think that is important. also on a global basis, facebook has been able to maintain that solid 66% ratio of daily active users to monthly active users, something they have had over the past several quarters. so again, they managed to eke that out quarter after quarter. if that number starts to decline, i think that is a bigger red flag. overall, again, i think this is about as good a quarter as you could expect for the position facebook is in. >> as we go live, mark zuckerberg has just started speaking on the call, saying we have had a solid quarter but he i want to point out that costs are rising, up 91% from last year. what does this mean? are they still spending on the content management issues? is that where this 90% increase is coming from? david: i'm sure that is the reason it is going up so much faster than ever before. i think the company wants to

say, simply by spending and hiring, that they understand how serious the problems are and are they are doing something about it, but the proof is in the pudding, as we say. until we see facebook not having the pernicious of fact it is having on elections and social dialogue, which is still manifests in all kinds of ways in our country and the united and around the world, i do not think we will be confident those measures are enough. nonetheless, it is good they are willing to spend money on it. i fault them for not being willing to talk about it bluntly , and maybe on this call zuckerberg will be pressed to explain how he feels and thinks about the extremely negative role facebook has played in certain aspects of modern society, which they have never directly confronted, but i glad am to see them spending money. selina: i'm sure we will hear more about this on the call, but

there are societal concerns hanging over their heads despite some positive numbers. are you seeing brand advertisers holding back because of the brand safety and security issues we have been talking about? debra: you know what, we have not seen any holding back on major advertisers. they are continuing to spend strongly on facebook. they are spending strongly on instagram as well. we are forecasting instagram will have $9 billion in ad revenue this year, amounting to about 25% of facebook's overall ad revenue in the united states. and growingtant part, and advertisers are still enamored with facebook and also instagram. selina: still ahead, ibm's ceo ginni rometty is staking her legacy on a $33 billion red hat deal. we hear from the ceos.

and later, brazil's hard hit it to the right. the former captains commanding victory. we look at the role technology plays in the poll. this is bloomberg. ♪

selina: the playstation 4 is like the videogame character who cannot be defeated. years after its debut, sony's five console is enjoying one of the strongest product cycles in the business. this is thanks to a steady

stream of popular game titles which has helped the company ship twice as many ps4's as x-box ones. that puts sony's franchise in a good position to counter the console industry's next challenge, games delivered via the web. after years of predictions the that cloud-based gaming would make hardware obsolete, the technology finally appears close to ready. ibm has thrown its hat into the cloud computing ring. on monday, the company announced they would be buying open source pioneer red hat in one of the biggest technology deals ever. both ceos spoke bloomberg after the announcement. >> we have been working with ibm for many, many years. and really over the course of this entire year we started to do more together. we made some big announcements in may at our summit of more work we are doing together. we started speaking more seriously back in april, and so it has been something that has kind of continued to evolve, and it became a natural next step.

in terms of why we see so much value for red hat is we do see tremendous opportunity for open source in the enterprise, and as the leader there, we see a large market and a growing market in front of us. what we lack is scale in our go to market. we have lacked a depth of customer relationships because we are a newer player coming up. we have lacked deep industry vertical expertise, and we lack the overall level of investment we need to meet our full potential. ibm brings all of that. so together, we can dramatically accelerate the red hat business and grow ibm's business as well. able to offer unique offerings that continue to grow ibm's business as well. >> what about from your point of view? a lot of people said ibm needs to make a move. this is a big move. this is going to be coming if not your biggest move, one of your biggest moves during your tenure as ceo. why did you decide this would be

an important part of your legacy? >> well, we have been reshaping ibm for this moment. this is to me all about resetting the entire cloud landscape, and this is the inflection point to do it. because if you look at our clients come a chapter of the one cloud is over. they have moved the first easy 20%. that is done. but the 80% ahead, that is a $1 trillion market, and this is the moment. and to go after it, they need a hybrid cloud. they need what jim and i do together. cloud, a hybrid private cloud and public clouds. they need it based on open standards. they said they are tired of the lock-in. we are the true open source, the portable answer for them. and we need to manage multiple clouds, and they have data now spread everywhere that we can securely pull all together.

this next chapter is a $1 trillion market. 80% of their work loads are going to move. jim just talked about our expertise and services and ability to that. so we catapult ourselves into number one. you have to remember, jim lennox, ibm, open source, we are the biggest contributor to the open source community. we have a long history and legacy of that. and lennox is the starting point for the cloud and it is a destination. so when i say phase two, we own the starting point and the end point now. that is a great move for ibm. and it is why it is so really accelerating all of ibm and good for our high-value model. selina: ibm chairman and ceo. red hat's ceo speaking with daybreak america. let's take a deeper dive with the managing director of equity research at wedbush securities and bloomberg's tech editor. you member the days when i covered this company from 2013

to 2015. she is saying now is the inflection point to cloud. some folks might argue that inflection point has already happened. what do you take of her finally making this admission that they can't build it in house. and they have to buy it? >> they should have done an acquisition when we were talking in those days. they didn't do it. they were hanging their hat on watson. that has not done much for their business. but this, in principle, can reshape a lot of the things they do. it can reshape software practice and their global services practice where they have lacked lagged companies like accenture and others. >> and that global services practices is still a majority of revenue, dan. when you think about how this business does get integrated, ginni rometty made her name on that service side in consulting back in the day. how much pressure is on her to have a seamless integrate with red hat into the broader culture and culture fit for ibm?

>> there is a lot of heat in the kitchen to integrate this successfully. it comes with risks, but obviously opportunities, as she talked about. right now for cloud, they needed to make a big strategic bet. if you look at it, there is vmware, red hat and a handful of others. if they were going to do it, they needed to do it now. definitely a few years too late, but integration is going to be the key to the street. how does this affect microsoft and amazon, a two-horseracing cloud. can ibm become the number three player? that is the key here. >> who is shaking most in their boots, seeing as acquisition? is it amazon, the number one, or who is most fearful? >> amazon and microsoft are drinking cappuccinos right now. it continues to be their world. everyone else is paying rent in terms of cloud. i think you are seeing a lot of consolidation. cloudflare, i think that is just the start.

you are going to see a lot more m&a in cloud. this is just the tip of the iceberg. the scale, that is really going to be the issue about these two players coming together. >> and that did seem to be what those two executives talked about. red has the growth and the small size, and ibm has the scale. but revenues have fallen by a quarter since ginni rometty took over in 2012. do you look at ibm as a growth story? they are reigning in buy backs and not giving out as much cash? does this change the narrative? >> we talked about the six or seven years ago that they should be buying more companies like this. this gives them a lot of good products to sell to the market. we think it could benefit somebody lying an amazon, microsoft or google, because you could shift more work loads to the cloud. the question for me is are they going to be really open in terms of working with these red hat products to move some of that and notto other clouds,

just go out and say hey, why don't you move this to i.b.m.'s ibm's cloud. that really is a big thing, because if they are not open, that could be an issue. >> red hat is already working with amazon and microsoft. is that a cultural shift for ibm to say look, our products have to be cloud agnostic. do they have to change their dna to make that work? >> they have to. there is no way out. we have seen with microsoft that is the only way to show people that you are agnostic to whoever the end party is. you try to stick your own technology in between, they will be in for a surprise. selina: that was dan ives and bloomberg intelligence's arunag rana. coming up, we hear from marc benioff about san francisco's homeless problem. bloomberg technology is live

streaming on twitter. check us out on technology and follow our global breaking news network on twitter. this is bloomberg. ♪

i am a family man. i am a techie dad. i believe the best technology should feel effortless. like magic. at comcast, it's my job to develop, apps and tools that simplify your experience. my name is mike, i'm in product development at comcast. we're working to make things simple, easy and awesome.

selina: welcome back. just days until the midterms, in san francisco, there's another issue on the ballot. on november 6, voters will decide to boost funding for the homeless services with a special tax, but it only applies to companies with revenue of a -- $50 million. they say it would generate earmarked for tackling $300 million homelessness, but it has split opinion among the city's biggest tech names. we spoke with marc benioff. marc: we have a very serious

homeless crisis in san francisco and it is getting much, much worse. we have 7500 homeless individuals on the streets, 1200 homeless families each with two kids. and how are we going to get them off the streets? it is getting worse, it's a problem. we know it. that is why i'm voting for prop c. selina: what about the unfairness that other companies are citing? you have jack dorsey saying that there is an unfairness i see in my company square which would be , taxed at a significantly larger total contribution. do you see the unfairness? marc: what i see is a crisis of inequality in san francisco. we have 70 billionaires in our city. that is incredible. we have companies that you report on with hundreds of billions of dollars in market capital. salesforce is the largest employer in san francisco.

market a $100 billion cap. you just talked about a few companies. square worth $30 billion, twitter with $20 billion, stripe, $20 billion. the amazing thing is these companies can afford it. for us, it's a $10 million tax. these are immaterial amounts to us. $10 million doesn't mean anything. that is less than the private plane and the jack dorsey flies on. you know that. and i tell you right now it is the money that we need to make a difference here in san francisco. >> jack dorsey says it becomes unsustainable and they will not be able to stay in the city. which, in his words, would be heartbreaking. what do you say to that? marc: that is what i see with the homeless. they are not getting the treatment they need. that is, they need shelter and mental health treatment. they need treatments for their addictions. and kids who are on the street, the most touching part these

, kids have to get into homes, and we have a plan, we know how to do it. we have been running a very successful programs here for the homeless for years. i have been involved, i have personally funded tens of millions of dollars for homeless programs and what i have found is we know how to do it, but we need more funding. i was just on the phone with the mayor. she needs an emergency funding cap $6 million from the to get a shelter open in the tenderloin because she is out of money. if you look at other politicos supporting this, nancy pelosi supporting this, senator dianne feinstein. not just me. chuck robbins who is the ceo of cisco systems we are all , supporting it. you have basically the nation's region's two largest tech employers right here, a quarter trillion dollars of market cap, we are both supporting it. we think this is right for business because homelessness has been so tough on our business.

emily the mayor has made this : one of her big issues and she is not supporting it. she thinks there should be a more structured solution. should she have a say in what happens in her city? marc: of course this was created before she became our mayor. this was put together by our cities very top -- city's very top homeless advocates. the people on her staff have been involved in putting this together. our top homeless ngos are putting this together. and really, the experts at ucfs who have worked with other cities have put it together. i have a lot of confidence in the program. i think it is the right thing for our city. look, big business pays. consumers don't pay on this. it's just our top 50 businesses in san francisco that are going to have to pay a very small tax. but it is to deal with our number one issue, that is why i am supporting prop c. emily: i know you have tried to

raise money for many issues privately. how much of this comes from your frustration that other leaders are not doing their part? marc: thank you for opening that door. we are constantly raising money here in san francisco. you help me out quite a bit, so thank you for everything you and mike bloomberg are doing. mike bloomberg is probably one of the most generous people in the whole country. he has given over $6 billion of his fortune away. incredible. in san francisco we have our own philanthropic needs. one we have the fires last year we raised when people were $40 million. complaining about this, they didn't give us money for that. we have just raised 40 million -- to get children off the $40 million streets, and we have now got hundreds of families off the streets and san francisco with this program. they didn't give us any money for that. and we had our sf gives program with tipping point, where we raised tens of millions of dollars to help those most in need in san francisco. so the only thing these guys are giving money to is the opposition to this proposition,

that is the first time they've ever given any money to san francisco. i guess it is good they are giving. emily the country cannot seem to : catch its breath ahead of the midterm elections in you have got the pipe bombs, the visceral debate on social media. shootings. what do you think can be done? would you like to see twitter go back to real names? marc: i would like for people to open their hearts and look when their walking down the streets. you see homeless adults with children on the street, saying there through the grace of god go i. one of the things i love about san francisco, we are built on the patron saint, st. francis. he had a great phrase, he said in giving it is that we receive. in giving that we receive, that is how i look at proposition c. the 'c' is for compassion. the 'c' is for charity. this is the heart of what we do

in the city. if you want to make the world better, it is time to start giving. that is the best way to let people know that we are caring about them. emily you have taken a hard line : on other companies. in the past, he said this has caused you some troubles in your friendships. own -- in your own friendships. i wonder if this has done the same. how are your relationships being affected by this? marc: hopefully, our relationship is all right. the most important thing is i feel like i need to speak my truth. sometimes, that means speaking truth to power. i have had a lot of tough phone calls from executives to get very unhappy when i say something like facebook is the new cigarettes. it's not good for you, it's addictive. it is being manipulated. others are trying to get you to use it in ways you do not even understand. all of that has turned out to be true and much worse than i ever imagined. that was a tough conversation. and this is a tough conversation where i say business is the greatest platform for change. we can fix the homeless situation in san francisco right now. all we have to do is vote for proposition c.

it is immaterial to our business right now, the financial numbers but homelessness is material to , my business. selina: that was salesforce ceo marc benioff. still ahead, sweeping to power in brazil's election. we discuss the role social media played and what countries should take from it. plus, tech companies recoil. the debate over free speech is on the internet once again and it is front and center. that is next. this is bloomberg. ♪

selina: bolsonaro marked a hard pivot to the right. he campaigned on a right-wing platform of privatization, liberal gun laws, and security.

his rise to power is notable, in that like president trump, it benefited greatly from social media. whatsapp is one of the main tools resilience used to keep in touch with friends and family and increasingly to do business. it is also a part of politics. it's spread alarming amounts of misinformation and false news. cris co-authored a report from brazil about what at -- whatsapp's role in it. bloomberg reporter david miller also joins us from the bureau. >> what we see is a big, big amount of misinformation going back and forth on the whatsapp system. we have analyzed about 50 images, for example, and out of those 50 images we got actually to analyze, we only found that four of them were totally true.

that is like a very little amount of good information being around in brazil. that is very low amount of good information. emily four out of 50? : that is very low. when it comes to where we have been concerned about disinformation, a lot of focus has been put on facebook and twitter, but it seems like these more private conversations is where it is at. cris, how concerning is this, that these are a little more out of the public eye, not on a public message board like facebook or twitter. >> what we have noticed here in brazil, we just finished the election, is we have spent about two years analyzing and trying to figure out how to fight misinformation on facebook, twitter and google, the social media that we usually read every day. now we have this whole new world being opened up. how do we fight misinformation on encrypted platforms?

that is something that we in brazil didn't figure out very much and someone else may need to figure out. >> david, put this in context in terms of the election. bolsonaro was not necessarily in the public eye before this candidate cycle. how much did this kind of ground swell of social media actually change his ascent to power? >> it is tough to know for sure. whatsapp, it is not so popular in the u.s., but it is encrypted from end to end, so you really don't know what the impact is. he built a very big social media following both on facebook and twitter, and a lot of the stuff goes through whatsapp but you , really don't know how much. certainly, there was much more concerned about the use of whatsapp and how it influenced in the first round. cris could probably speak better

to that, but it seems as though it came down a bit in the second round after the courts began reacting to this. it was a big bombshell report saying a company or companies were financing mass whatsapp messaging to people, the brazilian electorate, and that really had a big impact on the first round, but we don't know how much. we won't know how much. it doesn't seem. >> what we do know is that tough talking does make for viral content, david. in terms of what he is kind of pushing out there in terms of the messaging how much is it , tough talk, and how much is there actually policy behind some of the ideas around security, gun laws and privatization that he has been really pushing? >> well, i would say that is an issue not just regarding bolsonaro, but a lot of the candidates in this race entirely. it wasn't about policy proposals. this wasn't a race where everyone is saying i am going to

do x, y and z and he was the only one with bluster. there was a lot of that on all sides. i think that he has made clear where he stands in terms of traditional family values, and liberalizing gun ownership, policies like that. others say he has always been fixated on the idea of leveraging brazil's economic growth by mining the amazon. that is something you didn't see much of during this campaign but is nevertheless one of his big policy focuses, as well as privatization as we mentioned earlier. that is something we didn't see as much in the race, but is a cornerstone of the economic model they are going forward with. selina: meantime, gab.com is now

under scrutiny in the u.s. it is a two-year-old network that billed itself as a free speech alternative. in the u.s. it has been a haven for neo nazis, nationalists and others. now it has been linked to the pittsburgh synagogue shooter. robert bowers has been charged with a federal hate crime for the murder of 11 people. before he allegedly barged into the synagogue and opened fire, he posted one last anti-semitic message on gab. gab has now gone off-line. the gab home page currently has a statement, part of which states, "we are the most censored, smeared and no platform start up in history, which means we are a threat to the media and to the silicon valley oligarchy. gab isn't going anywhere." we had a panel to discuss it on monday. josh christine -- josh greenstein and david kirkpatrick. >> there is no question that we have seen some of the most hateful dialogue moving to these more specialized platforms.

as your previous guests were saying, whatsapp facebook , messengers, telegram, these are all new platforms for political distortion. there is no easy answer to what we do. i think we need facebook, and twitter, youtube and other major sites to continue their efforts to essentially ensure that hate speech is kept off, particularly threats of violence. one of the things i worry about is a site like gab with no resources, which attracts people with fringe views. it doesn't have the financial capability to really do the moderation if they were to, for example, say you cannot make threats of violence here. they clearly haven't been doing that, and that is why this got through. emily i can't help but ask : myself if this is what gab would be like if -- what facebook would be like if there was no moderation. they would look like a gab. facebook has dragged its feet on calling itself a media company

and slow ticket into the moderation game. is this fuel for them to take a closer look at what is going on, on the site and use the resources folks have been calling for keep an eye on two things? >> i think all of the larger social media platforms are really trying to say the right things about this. over the last year or two, they have increasingly owned up to it, at least rhetorically, and said we are going to do something different. they are not quite sure what to do. that is why you are seeing it be difficult. meanwhile, with gab, you are seeing how these companies talked before they realized they were important. saying hey, people are going to say what they are going to say and we are a conduit. >> the idea of being a haven fee -- haven for free speech seems like a noble statement for gab. again how are folks in the , world, users who are reading supposed to parse through what is real and what is not? >> i think with gab in particular it is worthwhile to point out that they have two sort of conflicting messages

they will make. the first is they will say we are a free speech platform. how can you possibly be against that? at the same time, their ceo andrew torba is very familiar with the standard, angry right wing rhetoric. he is very comfortable in those worlds. he will say -- he will sort of say those things while getting distance from those things, saying you can put anything you want on gab, so you can't really hold me accountable. selina: that was david kirkpatrick and josh brustein. still ahead, europe wants in on the crowded cloud space. that is up next. this is bloomberg. ♪

>> bloomberg against second --

india's second biggest wireless carrier is delaying its ipo due to turmoil in stocks. the company was originally aiming to list in london by march. but it has now pushed back the shares fell by half a year and plans to seek an enterprise value of about $8 billion for the african business. that is according to people familiar with the matter. while u.s. tech giants like amazon and microsoft jostle for market share in the cloud europe's largest tech company is , gaining speed. well-known for its enterprise software for managing business and customer relations, sap is pivoting towards a cloud suite. they have seen new club bookings rise 37%, saying it that generates more revenue from that business and from on premise products. now, they hoped his take on salesforce and oracle, raising its substantial revenue forecast for the current quarter to $6 billion. i sat down with ceo bill mcdermott to discuss.

>> you have a major move to the cloud. so if legacy companies have not fully vested themselves in the cloud where they have converted their revenue streams more to cloud than on premise, i think you will see them make bold moves to get cloud ready. no choice. that is where the customer wants us. selina: now, oracle recently launched its autonomous database. it does not need human administrators to function do . you see a lot of competition? are you developing something similar? >> we obviously have taken over the enterprise database market with hana. so, hana has many of the characteristics that you mention but moreover hana can take data from any source. so, everything that is either structured or unstructured and data from any source in the enterprise hana is running the , biggest enterprises with more than 25,000 customers at mass scale. so we like our hana database very much. selina: sticking with the competition with salesforce what

, is the plan to catch up with them in the customer relationship management cloud market? >> we see a fourth-generation of crm where we go beyond the current market participants. basically, they focus on sales , marketing, campaigns. things that essentially take money out of the customer's pocket. what we want to do is focus on an omnichannel, e-commerce world where we connect the demand chain, because that customer is social, mobile on the run, they , shop in every channel, direct to consumer, wholesale and retail. and we want to connect that demand chain to the supply chain so you have a complete end-to-end business. why is this so important? because we are not just talking about crm. we are talking about customer experience. the way ceo's think about their brand, their products, the human capital, their customers. all the people inside a company have to be completely committed to the customers outside the company. this is what we call fourth

generation crm, all about the customer experience. selina: you have met with president trump before. wall street was quick to cite the tax reform as a way of the future profit growth, but now the focus has changed to tariffs. what is your assessment of his performance and what you hearing from clients and partners around this? >> the most important thing is we get paid to run businesses and work in an environment where we let government do what government does. and all government leaders have to do what is best for their country and best for their constituents. and these tariffs are a serious situation. you have the two largest economies in the world, $30 trillion in combined economic firepower right now a little bit at odds with each other. it is good. and then you saw today's tweet when it was stated at the g-20 president xi and president trump , will sit down and talk. that is very encouraging to the markets. markets like certainty. so, certainly, we'd like to see china and the u.s. cooperate. it's good for supply chains and

good for business. selina: china is a very important market to sap. current tensions impacting business? it is a german company. >> in a sense, you could say that. german engineering is highly regarded in china, as it is in the united states and around the world, but we do particularly well in china. china is our fastest-growing market. we think that china is easily regarded as sap's second home in terms of the market receptivity, the ecosystem growth in china, and our long-term prospects. we think china will end up being the biggest market in the world, soon. selina: what is your approach to servicing customers there, given the data privacy concerns? >> well, we have, as you know, or probably do know, the most sophisticated data privacy technology in the world. we acquired a company called giggia, where we have billions and billions of customer records. so we protect your privacy. we do not let customers actually

engage you unless you agree you want to opt in on various offerings from our customers and how they serve their customers. so we follow the same reference architecture, high security standards and cloud standards in china that we do in europe, as well as the united states and every other theater in the world. we are very confident in china in the way enterprises can serve their customers in china with high security standards. we recently announced a very important partnership with alibaba. that is a cloud partnership that will not only impact our growth in china, but also the asean region, one of the most fastest-growing regions in the world. selina: that does it for this edition of "the best of bloomberg technology". we will bring you the latest in tech throughout the week. tune in 5:00 p.m. in new york. we are live streaming on twitter, check us out and follow

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♪ carol: welcome to "bloomberg businessweek." i'm carol massar. jason: i am jason kelly. we are here at bloomberg headquarters in new york. carol: in this week's issue, a special takeover on the new economy. of course, we have to talk about china and india. we are exploring the challenges the world growth engines face as they advance. jason: speaking of trade, the u.s. is raising the stakes.