so why didn't we do this earlier? life line screening. the power of prevention. call now to learn more. ♪ i'm emily chang in san francisco and this is "bloomberg technology." a $34 billion deal with red hat. plus, ibm isn't the only one making deal headlines. buy. agreed to facebook unveils new diversity

goals aiming to double the amount of female employees globally over the next five years. my diversity seems to be the next -- why diversity seems to be the next problem big tex can solve. ibm purchases redhat. withas once synonymous mainframe computing. the company is playing catch-up market leaders and offering software and services over the internet. bloomberg's david westin spoke to the leaders of both ibm and red hat earlier. >> i think, a lot of times people think everything is going to move to one public cloud. that is not what we see clients need, want, or are targeted to. estate, like a house,

i want to modernize it. i'm going to put it where i want and i'm going to manage and secure all. betweenthem a platform red hat and ibm, that runs on it and manageure it. that is a distinct capability and that is what i mean by the hyper cloud. others talk it but they may just have a connection between their public cloud and private cloud. >> you've got some other competitors out there in the cloud that are pretty darn big, like amazon and google. an evenoal is to be better partner with those clouds. our software runs on those

clouds. m, thosese, on ib clouds. greatill continue to be partners with us. that is more workload that those clouds can go address and run. my conversations have been positive because they see this as an opportunity to get more workloads out of their data center. >> our clients want us to be able to take our software and run it anywhere. david: you have ram the percentage of your revenue from the cloud dramatically. what is the ultimate goal? anni: not that there is ultimate goal, 80% of their work will move to the hyper cloud.

these platforms, it will be on other clouds included in our services revenue. it is to move with the same journey that our client needed to move with. david: what about moving with the overall size of the cloud expanding. how much will it be growing that or taking market share from other providers? points of basis revenue growth over a five-year period. our own cloud, the ibm public cloud and our private cloud together, should be the very best. a client already said, i have 15 clouds already. we want our platform running anywhere else. jim: to emphasize that, this is all about allowing our clients to provide more value to their

customers. when a client build a new application, a new website, a new local application, the opportunities for us to help them build the application, integrate it with data, run on our platform, on our cloud, all of those are areas of which we can participate in as our customers create more value for their customers. emily: joining us to discuss further, bloomberg tech's olivia carnival in new york. will this really give ibm a competitive advantage? olivia: i think that is the big question, what does the red hat acquisition actually do for ibm? 108-year-old american icon

mainly known for main -- known for mainframes. trying to reenter the clouds based as a different company, trying to transform what it has provided so far and change the game. we heard the ip -- the ibm ceo earlier call this a game changer for ibm. we have to figure out why this will be so significant. not just for ibm but for the cloud space. for other providers like microsoft and google who see ibm thats as partners partners with ibm rather than rivals. emily: what is the biggest risk and what could go wrong? olivia: whether or not red hat can really fold into ibm. this company has a staunch and old-school corporate work

culture. can this company red hat, which bit --n to be a little the ceo talking about, within willacquisition, red hat remain a distinct unit within ibm. its own consulting services, its own sales, its own terms and conditions. the red hat leadership team including the ceo will remain within red hat. they hope that enable to maintain red hat's independence, this integration will work seamlessly. ginni: we have heard rometty talk about the hyper cloud before. how is what ibm is trying to do different from what amazon web

services, microsoft, google do? olivia: they all provide different public cloud networks with particular strengths. iszon's strength infrastructure services. cloud's strength is its customer management platform . when you see companies buying and using these clouds for different reason. ibm is trying to become the glue that will stick together or connect all of those different clouds onto one platform. you may be a company that has to use salesforce for a particular reason. up to 15 different cloud providers that all operate independently, and you have no way to bring them all together. theis hoping it can become

connective tissue that aligns all of these clouds under 154 -- under one platform. the strategic move to become partners with their former competitors is what ibm actually did in the 1990's regarding the global services platform. it kind of partnered up with software providers, and allowed hardware, weour will partner with you instead of run against you. emily: a potentially huge technological transition underway if they can execute. olivia bloomberg's carville. backlash related to facebook's libra

cryptocurrency project. next week's hearings. this is bloomberg. ♪

emily: facebook is seeking to mitigate concerns around its crypto currency project libra amidst growing backlash from regulators. facebook's cocreator of libra, david marcus, wrote, "we know that big ideas take time and we know this won't -- we know we can't do this alone. people at the table." this, after members of the house committee told facebook last week that they should halt the project based on national security and monetary policy concerns.

marcus will testify in next week's hearings. --ning us to discuss obviously, you are both in the crypto industry. i'm curious what you are expecting from these hearings. hunter, you also worked at facebook for a long time. >> i think the approach they have taken throughout bringing libra to market has been one of being collaborative and open. i suspect what you will hear is that they want to work with regulators and they want to make sure they protect consumers, that they are developing this out in the public. chosen to share a lot of details of the project before even launching it. in the beginning of june, the unveiling of a white paper well

in advance of when they planned to reduce the protocols. i would predict it will have a collaborative tone. emily: are you optimistic about it, if it actually launches in a year? >> the announcement recently was a little bit more of a pregnancy announcement rather than a birth announcement. i think it is incredibly admirable what they are attempting to do. also, they are competing pretty directly with financial institutions and, frankly, countries. on one hand, that is really interested that they are basically coming out and saying, people who billion spent timeon day --

on facebook all day. potentially, we could better serve these people by providing eventually better financial services, better products. thanhave a lot more data cofo credit scores -- fi credit scores do. it goes back to the same debate we see about facebook, is there too much power and having that extensive data? emily: hunter, can we trust facebook did not take advantage of the power it would have in this situation? which is the concern of lawmakers. hunter: the team working on this have tried to address this head on. the two things. first, they put together this consortium. they said, we are going to have 100 firms involved and be one of

those firms. to build trust that they will be the only people behind the wheel. secondly, people have asked, will you be mining data, looking at what people are doing on this blockchain? what they have communicated, it is an open blockchain so everyone will have access to the ledger but they have no special rights in doing that. i expect they continue to operate as an advertising company but there's nothing about libra particularly that has bad intent. have i think they architected libra has not just their project. they are initially helping to get this off the ground but potentially there are 100 other institutions that you can trust that is bringing transparency and other services to this network. i think that is really what they

are trying to kick off because there aren't many folks who would be able to put together a global consortium of folks like that. it remains to be seen. i think there is obviously a lot of pressure initially from countries. when you issue a currency, that is who you are competing with. india's cultural affairs minister said -- doesn't that undermine sort of the point of having a democratized currency that people can transfer anywhere? fromr: the first reaction a lot of central bankers, policymakers, the bank of england, the same as the response from the senate. i think that makes sense as the default response. another thing people are talking

about with libra, it accidentally is the demonstration of the merits of something like a coin -- like bitcoin, where you don't have a corporation behind the wheel, you don't have a set of directors you have to listen to. i think that is why, in june, bitcoin was up 40% around the time of this news. people looked at, look at the decentralization thing that you can see in practice. emily: bitcoin, a big upswing in the past few weeks but also a lot of volatility. how is this impacting the industry, the companies you are investing in, and your decision to invest in them? bitcoin has been extremely volatile from the beginning. it is known to have these 80%,

90% swings over the course of a couple of years. that will probably continue. bringse price is up, it sort of a huge amount of interest and excitement back into the space because people are happy, they are making money. i have seen a real uptick in sentiment, a lot of excitement, folks coming back into this space, continuing to innovate. a lot of that has been happening over what we call crypto winter. there's just a lot more, a lot happier people, a lot more smiles around. emily: facebook hasn't given birth yet. hunter: it is a good time and crypto. we spend a lot of time with private advisors and institutions and we have gotten phone calls in the past week from people who haven't reached

out in a year. emily: what is the over/under on libra coming to creation -- coming to fruition? lily: i think that something is going to launch. i think it is a question of scope and which countries they will be launching. emily: and will regulators come on side? will lawmakers understand? lily: i think some will but aml willks around kyc have to be in place. a lot of the same rules,, regulations, experiences we have as consumers when using a paypal, event, those will be part of libra as well. i give facebook credit for thinking about the problem of many people having access to financial services.

making that accessible is something that will happen. liu and hunter horsley, thank you both. coming up, uber says it wants to be more than a ridesharing business. one way, uber eats. the man who is running that business in asia. this is bloomberg. ♪

emily: the global food delivery business could be in for a major windfall. according to euromonitor, global spending on food deliveries could rise by double digits by 2022. that seems like good news for uber as it seems to solidify its uber eats business. the head of uber eats in asia spoke about what this means for

their service in japan, india, and beyond. >> overall, the delivery landscape in markets like india and japan is being forward. we are seeing a huge exchange with new customers coming online. days inill very early markets like japan, india. i think it is only like 7% of the markets are doing online from delivery -- online food delivery on a regular basis. for us, we are really focused on moving beyond food delivery and helping the broader food and beverage ecosystem. that is a really exciting chapter. >> in japan, uber has had to adapt its business model to fit in with regulations. in india, they are protective

when it comes to some of these industries. do you expect to have to work regulators there to make it work? raj: what we have seen with uber eats across asia-pacific, we work very closely with stakeholders. restaurants, restaurant association, the safety boards, regulators. in all of our markets, we are operating very well, working in very collaborative relationships with regulators as well as restaurant partners. being a quality partner corporate what we are -- quality partners we work with is a corporate of what we do -- core part of what we do. how can you help think about expansion, integrating to make it more seamless? regulators,ides,

restaurants, policymakers, it has been productive. >> how about grocery delivery? will that be part of your asian strategy going forward? raj: from the customer standpoint, there is a blending of just wanting food that is available seamlessly. some of that may be restaurant delivery. some of that may be grocery. some of that may be convenience stores and alcohol. we do have grocery platforms, convenience stores, alcohol. we are also launching services that get great traction like cap. -- like pick-up. you can order on uber eats and pickup at your favorite restaurant. , the head ofri uber eats in the asia-pacific

region. cisco is spending billions. cisco's corporate makeover, next. this is bloomberg. ♪ xfinity mobile is a wireless network

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emily: this is bloomberg technology. i'm emily chang. fresh off a bullish sales and profit forecast for the quarter, cisco is not standing still. cisco makes up the backbone of the internet and corporate networks and announced it would at $2.6 billion. premium toents a 46% the closing price on monday. that company makes products for cloud infrastructure operators and communication service providers. the deal is excited to close in the second half of fiscal 2020. to tell us more, we have lianna baker in new york and ian king

who covers cisco for us. ian, what is the motivation behind this deal? ian: if you are cisco, you want to be selling the same -- don't want to be selling the same box everyone else is. they are getting technology, optical technology to put in that box and hopefully differentiate what they are offering and make the likes of google and aws come back to them and say we need cisco technology. what: talk to us about this does for cisco competitively in a market where we are seeing somewhat of an uptick in m&a. lianna: there has been a lot of tech consolidation in recent years, but cisco has not been the most th active acquirer. this deal does not really move the needle for them. has beenbins, the ceo, doing both on acquisitions for cisco in many different areas. this has been about the core networking business, but cisco

going to software with the deal two years ago at over $4 billion. they are no stranger to deals but not massive ones. emily: ian, chuck robbins took over who ran the company for two decades and he had a big challenge to make over the company. how well is he doing on that count? ian: he would say it is a work in progress. investors like it. first thing he did was restore growth which had not been the case for a long time. there were a lot of critics who said cisco is finished. cisco is a company, yesterday's networks. what he has done is a lot of small deals, a lot of additional things. recurring revenue for cisco makes cisco more sticky, more of a partner than it was. a company that sold these huge, expensive boxes. now all kinds of things. he's arguing we made the company

for the cloud. emily: shares are up significantly since the first half of the year. liana, does it complicate cisco's supply chain or put cisco in a position where it is now to some extent competing with its own customers? liana: that was an interesting angle in ian's story. a lot of customers are competitors to cisco. nowo was a cousia customer but nokia, huawei our customers of cisco. they have to decide how much they want cisco to know about their supply chain. cisco has done deals before where the companies they buy, they are a customer of. we will see how it plays out in these business relationships. emily: ian, talk to us about the priority that cisco is placing on hardware versus software. ian: it is interesting because they had added a lot of services, cloud software layers.

now we are seeing a push back to the fundamentals, hardware. i think this is chuck saying boxes still matter. we need to absolutely make sure these things are distinctive. they are something different than anyone else will offer and something people have to have. emily: we were talking about the ibm-red hat deal earlier. in the enterprise world, are we expecting more m&a this year, big m&a? liana: as we reported before, broadcom and symantec are on track to announce a deal over $22 billion that could include the week of july 16. that is one my sources are looking towards as the next the but there could be more in the works. conversations are definitely going on in the industry. emily: what is your take on this broadcom deal given the ceo's ambitions, but his goal to make

this company bigger and bigger? ian: he has a template. his template is a company that has a nice market share, but it is overrun. it has ambitions beyond its capability. run it for cash. symantec fits that move. emily: any deals you are watching out for? [laughter] ian: liana is the expert. emily: i will wait for both of you to keep us posted. ian king and liana baker. coming up, shooting for the stars. our conversation with richard branson and social capital ceo on their plan to list the virgin galactic space business before it even takes a trip into space. what it means for the space race, next. this is bloomberg. ♪

a lift.ouston, we have virgin galactic will become the first ever space tourism venture to hit the public market. this after receiving an $800 million investment from the publicly traded firm social capital. branson and the social capital founder joined bloomberg earlier today. richard: when we couldn't go ahead with the saudis, i decided i would fund virgin galactic myself through the virgin group. then, i got a call from chamath who said he was keen to have a look. he went to see our space people. spent some months looking into it. and, you carry on from there.

chamath: i have been an admirer of the business from afar. we had a bunch of mutual friends that were early customers so i was always wondering what was under the hood. when i got to see the business, i was floored about what they built and the quality of business. it took us nine months but we got here. >> you were chairman of the board with a $900 million personal investment. richard, did you talk to other funds, did you look for other backers in asia or the middle east? richard: no. as i said, we did have the deal from the saudis. that was not possible. we were actually to take this public ourselves -- i think chamath's approach worked very well for us. >> was that the last roll of the dice for you? the fund would have had to

return investment money in september. richard talked about the fact this has been nine months in the just they should. -- gestation. you are coming in a bit fine? chamath: i don't think so. we met over 200 companies in many countries over the last two years. it did take us nine months to do the diligence required to get under the hood and understand, and to feel comfortable. could we have done it in another one? sure. could we have invested in something else? yes. but i think we found the absolute best company that will thrive in the public market. something that will capture an enormous amount of consumer interest. giving the average person a chance to own a bit of space and there is nothing more exciting than that. >> the average person will own a bit of space. when is the first light going to be? let's try to nail that down. richard: now that we are a

public of the, i have to be certain in what i say. we are moving the whole operation to new mexico. that is where the space port is. we are moving our rockets there. we are moving our motherships there. we will do a few final test flights from new mexico and the in the new situation. then, i will go up and then the public will go up. i will not give a specific date because i am told i am not allowed to. we have had two very successful flights into space recently. we have made five, the first five astronauts to be made in america since 2009. we're -- after 14 years of hard work getting this far, we feel we are on the verge of something very special. >> you specialize in suborbital flights. different from jeff bezos'

outfit, looking at other segments of space. 60 miles above the earth and three times the speed of sound, which you know hit. you said you would go up in 2019. will you? our brave test pilots are ready to say to me they have tested the craft through and through, i will go up when they tell me to go up. whether it is by the end of this year or next year, we will see. >> have any customers have paid a quarter of a million dollars? richard: we closed out booking people five years ago because we had 600 customers. $80 million on deposit. since the test flight, we have had 2500 more people saying they want to come in. indicates there is a very large number of people. chamath: an incredibly capacity

constrained market. just servicing the customers we have will take two, two and a half years. once you convert these 2500 people, the first years of operation is already mostly spoken for. emily: richard branson, virgin group founder and the social capital ceo. for more context, i want to bring it match have to who is here with us in san francisco. it is a little complicated how they actually pulled this off because a publicly traded company associated with social capital, but virgin galactic essentially. max: that is exactly what happened. as we heard in the clip, social capital raise money from investors to acquire a private company and to get public. the pitch we heard from chamath was basically this would be a more efficient way to go public. when he started talk about this a couple years ago, it was the

ipo process is broken. it takes too long, too much regulatory oversight. i think it kind of makes sense for virgin galactic because virgin galactic, you are talking about extremely high potential. this could revolutionize air travel. this could be the new disney world. on the other hand, it is super speculative. it is the kind of thing that i think is hard to value and you can see what it might make sense to go public. emily: on the other hand, it could never happen or not happen for 100 years. how big of a milestone is this that is space company that has never taken a person into space will very soon be a public traded company? max: when branson and his partners darted talking about this 15 years ago and have this test flight in 2004, the idea that private space was going to be a big industry was kind of a joke. elon musk, i think was just at the beginning of spacex. it was very niche.

having this happen, having a privately held space company go up public is a big deal. we should also say virgin galactic has test pilots in space. it is not like they had no humans which is different from the jeff bezos and elon musk companies. it should be said the kind of space travel we are talking about is not like going to the moon. it is like going to space for a few minutes. you are going just to the edge of space, experiencing weightlessness and then coming down. it is in between a trip on the soyuz, which is currently the main option for private space travel and the idea where you take a 747 and they divebomb. emily: the tower of terror at disneyland. does this give virgin galactic an advantage over spacex or blue origin? more flex ability, visibility? max: i don't think so

especially. spacex is a higher valuation. i think it is somewhere around $30 billion. they've got billions and billions of dollars in government contracts. that company is well-positioned. blue origin has the pocketbook of one of the worlds -- the world's richest men. those companies have nothing to worry about. branson obviously is a wonderful marketer. i think being public and having that additional outlet for his sort of doing his thing will probably help the company. emily: look, branson, bezos, musk, they all said they would personally go into space as well. branson had said he is going to space this year and he kind of waffled a little bit, might look into next year, but i don't know. is that going to be the test? max: branson has probably more credibility and that he has done all kinds of weird stunts in his career. you kind of believe at some point he will be the test pilot. although, i think one thing we have learned tracking these

private space companies is timelines always flip. version galactic has been talking about sending tourists into space as of 2009, 10 years ago. it's definitely a moving target. i would not hold your breath. emily: interesting development in the land of silicon valley venture capital with chamath's firm being associated with virgin galactic. chamath has always been a bit of an iconoclast. is this a trend? max: he has sort of been pivoting. social capital was supposed to be kind of that new started bearer, the next kleiner perkins or next sequoia. the company has pivoted away from the traditional image of venture capital. talk about doing automated deals and doing these kind of special-purpose acquisitions. emily: a number of partners have left the firm. max: there have been internal problems. i think for social capital and

for chamath, he's got to feel like this is a positive develop. ment. yeah, it's virgin galactic and it is a risky one, but they have impressive technology. they sent test pilots into outer space before. emily: it will be fascinating to watch and we will be seeing if branson makes good on his promise for 2019. max chafkin, good to have you in town. still ahead, facebook is attempting to drastically increase minority representative -- representation in its workforce. how the social media company is tackling its big diversity problem, next. this is bloomberg. ♪

court a federal appeals says president trump cannot block his critics on twitter. a decision upholds an earlier ruling where trump violated the first amendment where he block users who are critical of his policies. the three judges wrote, the first amendment does not permit a public official who utilizes a social media cap for all purposes to exclude a person to open online dialogue because they expressed views which wish the official disagrees. facebook has unveiled ambitious goals to improve workforce diversity. in its annual diversity report, they announced plans to double the number of female employees globally over the next five years and the number of black and hispanic employees in the u.s. facebook also says it wants half of its u.s. workforce to be from underrepresented groups by 2024. joining us to discuss is kurt wagner.

it is no secret that facebook struggles with a diversity problem. they release a diversity report every year but this is new. setting fairly ambitious goals. tell us more about it. kurt: this is the first year they have planted a flag of sorts and said this is where we want to be five years down the road. when you look at the goal around women, i believe it is currently 33% of their company is women. emily: 36.9%. kurt: thank you. i should know that by now. that is about 14,000 people. when you think about doubling that over five years, that is not an insignificant goal. they have routinely made between half a percent to a percentage increase in these categories year-over-year. to do that in five years is going to be interesting. emily: the number of women in technical roles is 22% and people often argue those are the roles are the most important. they have a huge impact on the product.

and, that is harder to change. kurt: it is. black and hispanic employees, only 5% of those technical roles. when i spoke to the company, they were saying it is a sad irony and that is where they spent the most time trying to diversify their workforce, within the technical space. they have at the most trouble doing that. there is not really one answer to why that might be. there is some frustration they have not been able to diversify that specific group. emily: we actually spoke to a former facebook employee last year who came out last year saying facebook has a "black people problem" and it is not a problem that affects the people that work there but also the black users who use facebook. take a listen to what he told us. >> i don't think of the black experience, which is a shame because black users are over performing on the platform. so, it is a missed opportunity, missed financial opportunity for facebook to not engage with those users in a meaningful way.

emily: that is why this is important, not just because it is the right thing to do but because it matters for the business. kurt: and it matters -- one of the examples they gave was portal, a new video chat device. they had an employee of color who was working on it and she found out she was not being picked up by the camera as well as her white colleagues. it was a thing that only white people have been working on the camera, they may have not realized it does not work as well for people with darker skin tones. that is the example facebook likes to use, saying this actually impacts our products and makes them better for people use them. emily: how does facebook intend to do this quickly? kurt: it is not going to happen super quickly. as we have seen over the last six years that they have been unveiling this data, it is a slow-moving process. one thing they said that works really well in the interview process when they have a new position, there is a rule that they have to bring in

underrepresented groups to interview for that position. it is their version of the rooney rule, requiring minority candidates to be brought in for nfl head coaching positions. facebook says that works. by bringing more people through the door to interview with these jobs, shocker, we are now diversifying and hiring lower of those people - - more of those people. if they knew the answer, we would not be talking about it right now. emily: facebook with the leadership of sheryl sandberg has tried to lean on these issues. she has been a leading voice in the world on these issues, but i have to point out this is good timing or is this good timing for an announcement like this? facebook is not looking so good. kurt: normally when we talk, what disaster did facebook have this week? here, it seems like they are trying to do the right thing. they are trying to build a workforce that reflects the people who use their product. that theyink it hurts

view this as a positive announcement. they do this every year. they announce these numbers every year. it is not like the first year they have ever done it but it does not hurt we are giving them a bit of a compliment today. emily: we will hold them to it. kurt: check back in 2024. emily: kurt wagner, thank you. and, that does it for this edition of bloomberg technology. we are always streaming on twitter. find us. you can follow our global breaking news network, tictoc, on twitter. this is bloomberg. ♪

paul: welcome to daybreak australia. i am paul allen in sydney. shery: i am shery ahn in new york. we are counting down to asia's major market open. ♪ here are the top stories we are covering in the next hour. u.s. markets edged up ahead of a wave of central bank headlines this week. fed chief will face a barrage of questions on capitol hill. the prospects for rates.