BonitaSoft, the business process management (BPM) solutions provider, announced today it has raised $13 million it its third round of funding thus far. This is good news to fans of the company’s open source software, which allows for easy business process modelling and implementation.

Based in Grenoble (Southern France), the company’s open-source software is available for free download from its website and is offered with three optional subscription packs: teamwork, efficiency, and performance. Each subscription package unlocks new product and support features.

The Series C was led by the French National Fund for Digital Society (FSN PME), a French government initiative that invests in technology companies. Returning investors Ventech, Auriga Partners, and Serena Capital were also involved. The company has raised over $28 million since it was founded in June 2009.

According to the company’s press release, it is planning on using the new capital to expand further expand its business into Latin America, the United States, and Europe. It will be targeting mid and large sized businesses as it attempts to increase its number of clients. Part of this expansion will be the addition of 60 new employees at its San Francisco, Paris, and Grenoble offices.

“We are delighted with the support from the FSN PME fund established by the French government,” said Miguel Valdes Faura, BonitaSoft’s chief executive and cofounder, in the press release.

“The vote of confidence shows the value BonitaSoft brings to the BPM market. Customers have made it known that they want innovative, flexible and cost-effective solutions to improve their business processes, and we will continue to deliver solutions that meet this need,” he said.

BonitaSoft saw sales growth of 130 percent and a 390 percent revenue increase in the United States last year. It has over 600 clients worldwide, including Accenture, DirecTV, Old Dominion University, Teach for America, and Michelin. The company’s open-source BPM solution has been downloaded over 2 million times.

Photo credit: BonitaSoft

France isn’t exactly known as being the friendliest country for big businesses, especially when it comes to tech companies.

Now the country is contemplating a new set of taxes on companies like Apple and Google to fund cultural projects, reports Reuters.

What’s the reason for the new “culture tax”? Apparently, France is looking for ways to fund its cultural projects despite its economy being in the dumps. The country thinks that such projects should be shielded from funding cuts across the board due to an economic downturn.

The news comes weeks after French Industry Minister Arnaud Montebourg told Yahoo he didn’t want an American company to buy the “French Internet success story” that is Dailymotion (for which the French government is a partial owner of). France has also fined Google over a breach of privacy due to its maps product and also tried to force the company to pay royalties to local news publications for featuring links to their websites within Google News. These things all paint France as a place that’s anti-big business, and this new tax certainly won’t help.

The report indicates that French president Francois Hollande will make a decision on the new set of culture taxes by July.

French flag image via Shutterstock

Yahoo is apparently no longer interested in purchasing France-based streaming video Dailymotion, according to a Wall Street Journal report today.

The news about Yahoo’s potential deal emerged last month, with the company rumored to be buying as much as 75 percent of Dailymotion for an estimated $300 million. The portion is currently owned by France Telecom SA (of which the French state is a major shareholder of).

However, WSJ’s sources indicate that talks broke down after a April 12 meeting where French Industry Minister Arnaud Montebourg told Yahoo’s chief operating officer Henrique de Castro that he didn’t want an American company to buy the “French Internet success story” that is Dailymotion — one of the country’s few companies with global prominence. (Sacrebleu!)

But seriously at this point, I’m not sure any American company will want to deal with the baggage associated with acquiring a large French tech company, or at least not at the price originally offered. France isn’t exactly a favorite among big tech companies, anyways. The country fined Google for breaching privacy rules over its Google Maps service (as in, because Google provides maps.) And more recently when it fined Google €60 million ($79 million) for providing its Google News service without paying royalties to French media companies.

Yahoo’s strategy with Dailymotion could have turned it into a fierce competitor to rival Google’s streaming user-generated video site YouTube. It would have also helped satisfy Yahoo CEO Marissa Mayer’s long-term goal of relying less on expensive content licensing deals in favor of user generated media.

The report indicates that Montebourg wanted to renew talks with Yahoo for a deal that didn’t let the company have a majority stake in Dailymotion, which Yahoo wisely walked away from.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Since Apple won’t talk directly to it, AppGratis has taken to blogging. Apple did not talk to the French company before pulling its app from the iOS app store, says CEO Simon Dawlat, and it won’t talk now, either.

Apple controversially pulled AppGratis from the app store days after approving its updated iPad version and just months after AppGratis raised $13.5 million in funding to build its app-discovery business. Some reports of the situation have claimed that there was significant back-and-forthing between Apple and AppGratis before the app was pulled, but Dawlat says there was no conversation and no communication.

In fact, he was flying on an airplane to South America when Apple pulled the app. So today, he clarified the situation via the company blog:

“It is important to me and my team that we clarify what happened. It is absolutely untrue that there were discussions between AppGratis and Apple in advance of our App being removed from Apple’s platform. The first communication from Apple we received was an email sent to us after our App had been removed.

Since our App was removed, we have had one telephone conversation with an Apple employee who repeated the content of Apple’s email to us, and refused to discuss the matter further. Since then Apple has not returned any of our calls. It goes without saying that I am still very keen to speak to them.”

If Apple thinks this company will go quietly into the night after having its business model essentially blown up, that is apparently not going to happen. Most CEOs are very fearful of saying anything publicly in clashes with Apple, and Dawlat was measured in his words, but very clear: He wants to talk, and Apple isn’t listening.

In related news, The French digital industry minister has blasted Apple for the decision, and he says he plans to take the issue to the EU to examine the takedown.

“I recall that the French are the world’s second largest developers of software applications behind the United States for mobile devices,” Pellerin told LeMonde Informatique. “What is the sense of investing if, overnight, the economic model is jeopardized by a unilateral decision. … There is an issue of fairness in commercial relations. …”

Obviously, Apple wishes this whole situation would just go away, but my guess is that it’s just beginning.

photo credit: hottholler via photopin cc

Today, Google and its hardware partners Acer, HP, and Samsung will begin selling Chromebooks in six new countries: Australia, Canada, France, Germany, Ireland, and the Netherlands. And in the U.S., Chromebooks will now be available at over 1,000 Best Buy stores nationally, which doubles the number of physical stores that Google’s  the-browser-is-the-operating-system laptops are sold in.

International pricing will be roughly similar to the U.S., with Canada getting Chromebooks at $250-330, and $300-350 in Australia. But expect to pay a little more in Europe — in France and Germany, they’ll start at around 300 euros, which is close to $400 U.S.

It’s not exactly $99 education pricing, but it’s still fairly cheap.

Google’s first international expansion with Chromebooks to the UK appears to have been a success. Google reported that Chromebook accounts for more than 10 percent of laptop sales in leading UK electronics retailers Currys and PC World.

Google recently released a high-end touchscreen Chromebook for $1,299, which is not being released internationally, and with HP the biggest Chromebook yet, a 14″ model.

French president François Hollande has just issued a massive challenge to get high-speed Internet access to every home in France within the next three to 10 years.

In a talk on “the ambition [of] digital France and its willingness to develop very high speed [Internet access] throughout” the country, Hollande told citizens this initiative will cost the equivalent of $26.3 billion, which will come from a mix of public and private-sector sources.

The necessary investments will be coordinated by a governmental group set up specifically for that purpose. Telecommunications firms may face a relatively small tax to help fund the project.

The bulk of the job — including half of France’s homes and infrastructure in densely populated areas — costs $9.2 billion and should be finished by late 2014.

As recently as 2007, France outstripped the U.S. in terms of high-speed Internet infrastructure. And as of 2009, France was the second-largest ADSL (asymmetric digital subscriber line) market in Europe.

Increasing the availability and speed of Internet access has been a priority for many governments around the world. Leading up to the U.S. presidential election last fall, our own President Barack Obama told Americans, “Building a nationwide broadband network will strengthen our economy and put more Americans back to work. … By connecting every corner of our country to the digital age, we can help our businesses become more competitive, our students become more informed, and our citizens become more engaged.”

Job creation and business competition were two key points in Hollande’s presentation as well.

Nicolas Colin is the author of a controversial new report commissioned by the French Government about the tax system and the digital economy. 

Last July, the French Government asked Pierre Collin, a member of the French Conseil d’Etat, and myself to draft a report on the taxation of the digital economy. As an independent task force, our role was to recommend changes to national and international tax rules to take better account of value creation by digital firms. The report was published a few days ago, in the context of fiscal austerity and attacks on companies that avoid paying their fair share of tax.

Since then, some of our recommendations, including the idea of an “Internet tax” based on data collection, have stirred a controversy both in France and abroad. This article explains how we came up with our conclusion and why we urgently need to reform our tax system so that it finally fits the way value is created in the digital economy.

The digital revolution is old news now, yet only lately have most people begun to get a feel of its full implications. As it becomes mainstream, the digital economy gets everywhere in our lives. It permeates our days and nights. Inspiring startups or global corporations disrupt entire industries with their intensive use of IT, innovative business models, iterative design, and a powerful leveraging of data originated by user activity.

And yet official statistics utterly fail to measure all this. Multi-sided business models with a predominance of free services are one reason for this failure. Our inability to add data as a primary economic category, just like goods and services, is another. The reality may be that much of the value generated by the digital economy is not captured by official statistics, and therefore leaves our countries unnoticed and ends up in the accounts of offshore companies.

User data creates value

To better grasp this economy, we must revise many assumptions. A first step is to reconsider the role of data in value creation. In the digital economy, regular and systematic monitoring of user activity allows companies to make intensive use of data in all sorts of ways. Indeed, user data is not exploited only to target advertising. It can also be leveraged to customize a product, make purchase recommendations, maximize producer surplus by adjusting the price, better match supply and demand based on trust and reputation, measure and improve the performances of an application through A/B testing and growth hacking, fuel innovation efforts to ship new applications, and nurture entire ecosystems with platform-as-a-service business models. In short, the digital economy turns business into a Moneyball game, in which leveraging data leads to global scale development and higher profitability.

Because data can be stored, aggregated and reused in many ways, user data is in effect put back into the supply chain where it creates value on the long term. As the value flowing from user data has a ripple effect on all the sides of business models, users become part of business operations, thereby blurring the line that used to separate consumption from production. As with content creation or customer support, users tend to replace employees and contractors in the supply chain. And because users are not paid like employees (and they do not want to be for fear of corrupting the product), their “free work” allows tech companies to reach the highest economies of scale and massive profitability.

In our common effort to reduce public deficits and invest in the future, giant tech companies do not pay much. User activity is sustained, even enhanced, by massive public investments in education, social insurance, or broadband networks. And they didn’t build that.

On the contrary, every big company in the digital economy has a very low global taxation rate. The value of their intangible assets soars because of network effects, but those assets are located in tax havens where they attract most of the profits (since these companies don’t pay dividends, they can locate their profits anywhere). Also, in multi-sided business models, it’s easy to spread the side that collects data on every domestic market while concentrating the side that makes money in a single country from where the profits are easier to transfer towards tax havens. Finally, unlike old companies, young tech companies were designed from the very beginning to play with international tax competition and bring down their taxes to the lowest level, thus making painful and risky business restructuring unnecessary.

Meanwhile, the tax law has not kept up. According to international tax laws, corporate profits should be taxed where corporations have their headquarters. In the digital economy, it’s easy to choose a headquarters’ location based on where the taxation rate is the lowest. Only when there’s a permanent establishment can a country without a headquarters levy a corporate tax. But the definition of a permanent establishment is gravely out-dated and completely misses the digital economy.

The need to tackle this problem has become urgent. The data-driven economy generates lower prices for consumers, yet does not translate into net job creation. In our global economy, the massive consumer surplus generated by free services is primarily spent on the consumption of imported goods. This is one reason, among many others, why the digital economy means fewer job creations than the optimistic views of the nineties led us to expect. Maybe it’s because governments need the additional revenue to implement policies designed to stir job creation in the digital age (or levying taxes on the digital economy would allow cutting them for other taxpayers).

We have to act even faster because, as Marc Andreessen so accurately put it, the digital economy is eating the world. In every sector, innovative tech companies make their way into the value chain, focus on the most strategic point (usually client or user relationship), collect data, and leverage it to siphon off the profit margins from entire industries. The Internet of things only accelerates this process, as it enables tech companies to grow beyond pure-playing business models and enter new markets, like payment, cars or energy.

As the digital economy keeps growing, every sector’s margin will be relocated abroad, disappearing from our GDP and depriving the government from additional revenue that should normally ensue from higher productivity. Now, productivity growth without job creation and more fiscal revenue is unprecedented in economic history. And the digital economy will not create jobs without public policies designed both to support its development and to help productivity spread across the entire economy. Tax policy is part of what it takes to complete Schumpeter’s process of creative destruction.

Corporate tax 2.0

The report I wrote with Pierre Collin mainly recommends that developed countries recover the power to tax profits made by giant tech companies. Corporate tax is the best way to tax corporations. It’s neutral and gets revenue only from profitable companies. Yet tax laws ignore the very fact that each time data is involved, users become part of the operations.

Therefore, corporate tax must be reformed to adapt to the digital economy. A new definition of a permanent establishment must be introduced, grounded in the fact that users play a key role in digital value creation. Through user data, value is created where applications are used by people, not only in Bermuda or in the Cayman Islands. Accordingly, the goal should be to have a permanent establishment each time data is collected on a domestic market to fuel a business targeted on that same market. The amount of profits that should be declared to the local tax authority would diminish profits transferred to pay for intangible assets located abroad, depending on the number of users and the intensity of data collection.

Obviously, no country can reach this goal alone. Negotiations must begin at both the EU and OECD level to obtain new rules on the allocation of taxation power and change bilateral tax treaties. A new definition of a permanent establishment, specifically introduced for the data-driven economy, should be based on the notion of users as co-creators of value. Ambitions to tackle tax base erosion and profit shifting have been voiced by many governments, the OECD, and the G20. Negotiations could begin as soon as this year.

As a secondary proposal, Pierre and I also propose that, while we negotiate in the OECD, France gain leverage by taxing certain data collection practices. Data is in effect the only tax base that ensures neutrality across the whole digital economy. But as the value of data is not yet mastered, the goal should not be to tax data collection per se. Instead it should be to create an incentive for businesses that rely on regular and systematic monitoring to adopt compliant practices in favor of user empowerment and innovation.

This tax can be compared to the concept of a carbon tax, which grew out of the 1997 Kyoto Protocol on climate change. It would tax 1) any company 2) that collects data through regular and systematic monitoring 3) from lots of users based in France and 4) that refuse to comply with stronger privacy and user empowerment requirements. In the end, it provides incentives to firms that better inform their users and open up APIs to enable smart disclosure, as defined by Cass Sunstein (the “timely release of complex information and data in standardized, machine-readable format in ways that enable consumers to make informed decisions”).

It should come as no surprise that tech companies take advantage of out-dated tax rules: it is in their interest as well as in their shareholders’. The issue is not to force corporations to comply with rules that do not exist. Rather, the goal should be to change the rules, allocate the power to tax profits to every country where these companies have operations, and acknowledge that in the data-driven economy, users themselves have become part of these operations.

I think this reform will be a relief for these corporations, as it will allow them to focus on creating value instead of dealing with the growing anger of politicians, public opinion, frustrated competitors, and the media. Above all, I’m convinced that including user data collection in the definition of a permanent establishment and the determination of arm’s length transfer prices would be a major step forward in our common efforts to open up a global debate on the real value of big data. In the meantime, that the reform of international corporate taxation could be achieved through the advanced promotion of smart disclosure should be welcomed as good news by all those who are in favor of innovation and user empowerment.

This post is part of a series produced for VentureBeat by Singularity University. It represents the views of the author and not necessarily those of Singularity University. Just like the report about the taxation of the digital economy, this article has not been endorsed by the French Government, who hasn’t yet taken a position on our recommendations. Clyde Long de Lugo and Laetitia Vitaud helped draft the article.

Photo credit: kenteegardin/SeniorLiving.org via photopin cc

Believe it or not, comics are big business on the iPad. Digital comic book startup ComiXology’s iPad app ranked No. 3 in Apple’s top 10 grossing list in 2012, and was among the top 10 highest grossing apps in 2011.

Now, with its usage in the U.S. at an all-time high, ComiXology has plans to launch the service into Europe, the company tells VentureBeat.

ComiXology is currently one of the only digital services to offer a variety of comic book publishers in its store, including DC Comics, Marvel, Image, IDW, and Boom. The store’s single comic issues range in price from $0.99 to $4.99, and new issues come out weekly.

The comic-book app’s success in the App Store is especially impressive given all of the successful mobile iOS apps on the market today that have with their own in-app purchases, from games to magazine publishers and beyond.

While ComiXology is already enjoying success in Europe with its library of American comics, the international expansion will see the company pull in local language comics that are popular in other countries. As I’ve said in the past, pulling in new publishers/creators is one of the easiest ways for ComiXology to grow its business. Once it has content from countries like Spain and France, it’s likely that those comics will  get translated to other languages and boost ComiXology’s sales in all regions.

The push into Europe also makes sense because of the robust comic book reading audience in countries like Germany, Italy, Spain, and the U.K. France’s comic book industry alone is reason enough for the company to set up shop, as its comic book sales are comparable to the U.S.

“ComiXology has already proven to be enormously popular with consumers in many countries around the world — and that’s just in English,” said CEO David Steinberger. “With Europe, comiXology takes the first step in becoming the platform for multi-language graphic literature from all over the world.”

Along with its Europe expansion announcement, ComiXology also announced that it was opening up an office in Paris, France to help facilitate agreements with local-language publishers.

French Spider-Man art via Adam Baker/Thinkbaker.com

According to a number of reports and tweets out of France, at least one retailer, Darty and Auchan has had a logistical SNAFU and released some iPad Minis ahead of schedule … meaning that some Apple fans received the latest iDevice three days earlier than everyone else.

Here’s the tweet:

Les messages laissés par Auchan sur le répondeur de @Toximityx pour lui demander de rendre son iPad mini sont hallucinants. #tweetprecedent

—
Benjamin Ferran (@benjaminferran) October 31, 2012

My high school French is a little rusty, but my best guess is that Ferran is saying: “Auchan [the retailer] has sold an iPad mini before the release date and called its clients asking them to return them. Whatever …”

Source: http://maheinfo.blogspot.com/2012/10/Apple-iPad-mini-release-date-Countries.html

iPad mini release countries

(I was feeling a bit bad about my decaying skills in la belle langue, but apparently Google’s high school French is even rustier, giving me this translation: “Auchan sells a mini iPad before the release date and recalls his client to the surrender. Anything …”)

French Mac blog Macg.co confirmed the story (Google Translate link).

Apple is attempting something very, very ambitious with the iPad mini: releasing it at huge scale in 34 countries simultaneously. That’s the most countries I can remember a brand-new Apple product being released in at once, ever.

Realistically, when you’re trying to coordinate that kind of scale, some mishaps are going to occur.

But the upshot is: If you wanted an iPad mini early, you should have been in Paris.

photo credit: Werner Kunz via photopin cc

Thanks for the tip: Eric Dupin

French music service Deezer has a confirmed $130 million round of funding.

Rumors about this massive raise were circulated over the weekend, when the Parisian Daily Le Figaro reported the investment. Today, the company officially announced the treasure trove that will support the international expansion of its music subscription service.

Deezer’s inventory consists of 20 million tracks, which users can also download and listen to offline. The music is available on a range of devices, as well as more than 100 million member-created playlists. Discovery is a key component of the product, which not only facilitates content sharing, but also provides editorial recommendations.

According to a statement, Deezer’s impressive traction stems from high rates of engagement in international markets:

“Deezer’s sustainability is also the result of a strategy focused on growing markets rather than targeting the US where the competition intensity significantly increases customer acquisition costs.”

The 2 million subscribers actually generate revenue for the company, hence the hefty chunk of change from Access Industries. Partnership with Facebook and telecom companies like Orange and Telenor also contribute to its success. In addition to these paying folks, there are 7 million monthly active users and 26 million fans total.

This funding follows $6.8 million in 2007 and $12.5 million in 2008. It will accelerate Deezer’s 200 country roll out. Read more on VentureBeat.

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Korean electronics powerhouse Samsung on Monday confirmed it has filed a complaint against Apple in French courts on the grounds that the iPhone and iPad maker is violating three of its patents.

Samsung and Apple have been in a worldwide legal battle involving patent and copyright infringement since April when Apple sued Samsung in U.S. courts. Apple has claimed that Samsung’s Galaxy S smartphones and tablets “slavishly” copied the designs of the iPhone and iPad. Extensions of the infringement case have thus far made it to courts in the U.S., Europe, Australia and Korea.

The just-revealed French complaint was filed in Paris district court in July and the first hearing is expected to happen in December. Samsung told AFP that the complaint focuses on three technology patents and not design patents. Apple’s most recent tussle with Samsung in Germany focused on design patents.

Samsung’s French complaint asserts that Apple is violating patents regarding UMTS (Universal Mobile Telecommunications System). The suit targets the iPhone 4, iPhone 3GS, iPhone 3G, iPad and iPad 2.

The most recent incident between the two companies was last week when a German court upheld a preliminary injunction that bans the sale of the Samsung Galaxy Tab 10.1. Samsung plans to continue the appeals process in higher courts in Germany.

Because Apple has had some success banning Samsung products in a few countries, it’s not hard to imagine the two companies coming to some sort of settlement. If such an agreement were to occur, Samsung would most likely have to pay Apple a fee per unit on certain mobile devices it manufactures.

What do you think about the ongoing war between Samsung and Apple?

Photo from Oldboy courtesy of Show East

To clarify, if a TV or radio show wants to do a story on the popularity of Facebook, it can mention Facebook by name. However, a TV or radio show is no longer allowed to solicit followers by saying things “Like us on Facebook” or “Follow the latest updates from us on Twitter.”

The motivation behind the ban is that the regulators believe mentioning Facebook or Twitter unfairly promotes a commercial enterprise over other enterprises, according to French regulator CSA. Basically, Facebook and Twitter are getting an unfair advantage over smaller social networks with each mention.

“Why give preference to Facebook, which is worth billions of dollars, when there are many other social networks that are struggling for recognition,” CSA spokesperson Christine Kelly told This Much I Know. “This would be a distortion of competition. If we allow Facebook and Twitter to be cited on air, it’s opening a Pandora’s Box — other social networks will complain to us saying, ‘why not us?’”

I can understand the idea of TV shows not promoting one business over another, but approaching the problem like this is outdated thinking. Facebook and Twitter are not simply businesses—they are channels of communication that help companies better reach an audience and vice versa. It’s like saying someone is allowed to call a company but not send it an e-mail.

At this point, most people in France probably know about Facebook and Twitter and what the services offer, so the move to keep them off TV and radio won’t likely harm the adoption of the services by more users. But really, this seems like an inane move that only hurts a program’s ability to stay relevant instead of keeping a level playing field for social networks.