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Archive for the ‘Software, Technology, and Wow I Didn't Know That’ Category

According to The Wall Street Journal (1/17/18), Google is expanding its already large network of undersea cables to access new regions around the world not currently well served by its competitors, as well as to give itself some rerouting capabilities if a region fails or gets overloaded.  It’s all part of the now unstoppable growth of cloud computing services, as well as a play to keep up with its two greatest competitors, Amazon and Microsoft.

Google VP Ben Treynor professes that he “would prefer not to have to be in the cable-building consortium business” but found there weren’t a lot of other options.

Google parent Alphabet already owns a massive of network of fiber optic cables and data centers, already handling about 25% of the world’s internet traffic.  These facilities allow Google to control its data-intensive software without having to rely on the bit telecommunications providers.

After a decade of construction, Google will soon have 11 underwater cables around the world.  They’re used to “refresh research results, move video files and serve cloud computing customers” around the globe.

And at that, Google currently ranks third in cloud-computing revenue behind Amazon and Microsoft in the biggest tech race going on the planet now.  Billions of dollars of revenue annually are at stake, the Journal points out, as companies increasingly move various data operations to the cloud.

Currently, its longest cable stretches 6,200 miles from Los Angeles to Chile.  But Google has also teamed up with others, like Facebook, for its latest build-out.  They plan to share capacity on a 4,500 mile cable from the east coast of the U.S. to Denmark, with an additional terminal in Ireland, thus increasing its bandwidth across the Atlantic.

Another cable of 2,400 miles will be run from Hong Kong to Guam, hooking up with cable systems from Australis, East Asia and North America.

The internet build-out continues, as does the march to cloud dominance.  Only today, you’ve got to have a few billion dollars in your pockets to play.

 

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We hear a lot these days about blockchains, usually as the underlying technology for something called “bitcoin,” touted as a new virtual currency.  There’s a lot of talk about bitcoin being a future form of currency that might circumvent banks, governments and other authorities.  But bitcoin and blockchain are not at all the same, and should not be confused.

Bitcoin isn’t really a currency at all.  It’s more of a currency store.  Think of gold: it has value to holders, and acts as a sort of benchmark, but while it’s a store of wealth, it is not in itself a currency.  Same with bitcoin; it has no intrinsic value.  Unlike a stock, a bond, or a piece of real estate, it’s not a claim on future earnings to which a valuation could be attached.  In fact, most people need to convert bitcoin into cash just to use it, and it’s most commonly ‘valued’ against a real currency — the dollar.

Moreover, as the recent climbs and dives of bitcoin’s value have shown, it’s not even much of an investment in the traditional sense of the word.  It’s more of a gamble, actually.  It’s paid off nicely for some, but those playing in bitcoin are best advised to use some money they can afford to lose.  In fact, a couple legitimate bitcoin exchanges have arisen lately, and they require investors to have sizable assets, and minimum bitcoin investments of around half a million dollars.

So, separating bitcoin from blockchain, we look at the underpinning of bitcoin, the blockchain in which we think lies something worth paying attention to.

Blockchains are part of a digital ledger, a database essentially, allowing for the creation and sharing of a large number of transactions while avoiding error or fraud – not to mention middlemen (i.e., banks).  There is no centralized administrator.  They work via a decentralized, anonymous, open structure, backed with strong cryptography to ensure the accuracy of each transaction.

A blockchain has three components: a transaction; a record of that transaction; and a database in which that transaction is permanently and securely verified and stored.  Once stored, a record cannot easily be undone, because altering that record retroactively affects all other blocks in the network.  Any change to a record, say someone trying to forge or delete a record, would appear as an irregularity to all others in the network, and the new data would be rejected.  It’s basically trust without having to trust any person.

Recently, an article in APICS Magazine describing blockchain in logistics described the nature of the transaction quite neatly, as follows:

A transaction is requested…

The transaction is broadcast to a network of computer known as nodes…

The network of nodes validates the transaction using known algorithms any use can see…

The verified transaction is combined with others to create a new block of data for the ledger…

The new block is added to the existing blockchain in a way that is permanent and unalterable…

And the transaction is complete.

In short, blockchains are useful in generating a less expensive but reliable way to know the status of any transaction in the system.  And as APICS notes, “anyone focused on making a process leaner will appreciate the value this brings.”

As you read more and more about bitcoin (and as we written about in the past), keep your eye on the underlying blockchain.  Dollars to doughnuts, that will be the technology play that matters in the long run.

 

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If you follow the finance and the realm of money at all these days, then the notion of someone trying to reinvent finance may pique your interest.  That’s exactly the goal of a cryptocurrency exchange called Coinbase.  It’s a 225-person startup located in San Francisco whose vision of the (not-too-distant) future for loans, fund transfers, venture capital and the trading of stocks will be done with electronic currency – instead of banks.

As a recent article in Bloomberg BusinessWeek points out, Coinbase is already popular with individual traders, and is now actively seeking “the legitimacy that comes from persuading big companies to use its platform,” while reassuring regulators that bitcoin isn’t simply “a market for hackers and money launderers.”

They’re off to a good start.  From an apartment-based startup three years ago, today it operates as an exchange for individual investors as well as a more sophisticated platform for traders called the Global Digit Asset Exchange (GDAX).  Today trading volume is driven mostly by hedge funds, but they’re working on luring players like Goldman Sachs to the platform.

Developing ties with banks is a priority for Coinbase, so owners who want to cash out for dollars have an exchange to do so.  It apparently has several banks already in partnership with them, as well as a partnership with Fidelity Investments.  Coinbase thus far has raised over $200 million from investors, and after recently doubling headcount is on track to double it again in advance of going public in 2018.  The company currently holds over $10 billion in assets.

Of greater interest to investors and regulators is the fact that Coinbase – unlike others operating in the bitcoin realm – has never been hacked.  As Ari Paul, chief investment officer of a hedge fund called BlockTower Capital Advisors has said, “They’ve been the largest hacking target in the world for a long time, and they’ve proven they can handle it.”  At the same time, they’ve been building strong relationships with regulators.

GDAX CEO Adam White notes that “This isn’t a couple dozen kids in a garage kind of hacking away.  We recognize we’re protecting people’s money.”  Coinbase stores USB drives and paper backups of 98% of customers’ digital currencies in safe deposit boxes.  Only 2 percent is kept online, covered by insurance against security beaches.

Notes one Coinbase executive, “We’re going to be successful not because the price [of bitcoin] goes from $10,000 to $100,000, [but] because we have millions of customers who trust us.”

As Coinbase CEO Brian Armstrong notes, as more institutional money flows into the cryptocurrency space, it will help grow the entire industry.  Notes one hedge fund manager, “Institutions are just chomping at the bit waiting to come in.”

And if Coinbase and their fellow financiers have their way, the future of money will never be the same.

 

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According to Elliott Kass of Information Management, U.S. business is expected to spend big on technology in 2018.  Corporate and government tech budgets are set for around $1.5 trillion in the year ahead.  That’s a whopping 9% increase over 2017.

According to the Forrester Research team behind those projections, cloud-based software-as-a-service leads the way, especially for applications that attract and retain new customers, like CRM, e-commerce, mobile apps and services, which together will account for over $500 billion.

Core financial, HR, hardware, telecom and other services will make up the other $1 trillion, logging about 3% annual growth.

Forrester estimates that spending on new projects next year will grow by 7% and CIOs will take advantage of favorable economic conditions to “expand their application portfolio.”  For the past couple of years they note, IT spending has been outstripping nominal GDP growth, with cloud services viewed as new technology that can spur tech buying to exceed those economic growth rates.

CIOs are slated to bring to fruition many of their wish list items in the year ahead, focusing on projects that improve customer satisfaction and the overall customer experience.

With security always a concern, the Forrester Research lead, Andrew Bartels, took the chance recently to emphasize the importance of security and backups, noting that with cloud applications come growing concerns about safety and security.  Bartels recommends balancing cloud adoption with “alternatives” since the cloud offerings can be compromised.  As Bartels notes: “Businesses should back up their data, whether it resides on its own systems or the systems of a cloud service provider, and maintain ‘a reserve of on-premised systems’ that would allow it to continue to operate, if its cloud service provider becomes inaccessible.”

Says Bartels: “Any firm that puts all its tech eggs in one cloud vendor’s basket is asking for trouble.”

The full text of the Information Management article can be found here.

 

 

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Did you know that all six of the first programmers of America’s first computer, ENIAC, were women?

Did you know that the proportion of women earning degrees in computer science peaked in 1984 at 37%, and has since declined to half that percentage?

Or this (according to an article by Christopher Mims in the Dec. 11th edition of The Wall Street Journal): “Memos from UK government archives reveal that in 1959, an unnamed British female computer programmer was given an assignment to train two men.  The memos said the woman had ‘a good brain and a special flair’ for working with computers.  Nevertheless, a year later the men became her managers.  Since she was a different class of government worker, she had no chance of ever rising to their pay grade.”

These facts from Mims’ article would probably come as little surprise to many women today.  The sad truth is, with such a low rate of female computing grads, it’s no surprise that at companies as large as Google and Facebook, only about one engineer in five is female.  (Over our own thirty year history as an ERP services firm, our level of female tech support specialists has hovered around 50%, varying from year to year, but lower on the pure ‘programmer’ side.)

But according the Journal, a growing number of women and other minorities are working on the issue.  U.K. history shows that simply educating more women and other minorities to be engineers won’t solve the problem.  At its genesis, computer programming was initially thought of as menial labor and it “was feminized, a kind of ‘women’s work’ that wasn’t considered crucial.”  The U.K. government considered these workers to be of the low-paid “Machine Operator Class.”  Later, women were pushed out of the field during the postwar era by the then-common belief that women should be denied entry into higher-paid professions because they would leave once married.  Instead, the government set out to develop a class of “career-minded and management-bound young men.”

Turns out, the males were often less qualified, and left the field, viewing it as ‘unmanly.’

In fact, a shortage of programmers actually forced the U.K. government “to consolidate its computers in a handful of centers with the remaining coders.  It also meant the government demanded gigantic mainframes and ignored more distributed systems of midsize and mini computers which would give rise to the personal computer, according to Univ. of Wisconsin Professor Marie Hicks, in her book “Programmed Inequality.”

As a result, the U.K. computing industry imploded down to a single firm by 1968 – and the dream of personal computers was probably delayed by a couple of decades.

One of the women pushed out, Dame Stephanie Shirley, built a tech firm in the 1960s made up almost entirely of women with family-friendly benefits like working from home.  (It was eventually sold to a rival in 2007 for $1 billion.)  Shirley said when she founded the firm, she was seeking not wealth but “a workplace where I was not hemmed in by prejudice or by… preconceptions about what I could or could not do.”

As to progress today: Stephenie Palmeri, a  partner at Venture Capital firm Uncork Capital says raising the ratio of women in tech requires having more women in positions of power, both as investors and as executives.

Adds Dr. Hicks, “Without external influence, you can’t expect a system that prizes ‘culture fit’ to change.”  You can’t expect to rise in a meritocracy that does not reward everyone equally.

Today the challenge is all the greater: companies are racing to build artificial intelligence systems to propel smarter hiring, and the need to eliminate bias has never been greater.  AI learns from pre-existing notions of what constitutes a ‘good employee’ much like the personality tests given by many firms in the past.  We can scarcely afford to build in biases that inherently limit the opportunity for a level playing field at all.

 

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On November 11th China’s Alibaba, the nation’s largest provider of cloud infrastructure, posted record sales of over $25 billion in a single day – known in China as “Singles Day,” a national holiday dedicated to the nation’s singles population.  The e-commerce shopping site hyped the day extensively, with 15 million products available from over 140,000 brands of merchandise.  They processed over 800 million orders, at rates said to be on the order of 175,000 transactions per second.

That’s a big deal, reminding us why the cloud is a big deal too.

Alibaba dominates the Chinese cloud, with about 60% of that market, but U.S. firms still lead globally, led by Amazon Web Services and Microsoft.  China won’t issue data center licenses for foreign customers, which gives local firms like Alibaba and Tencent Holdings a big leg up there.  And it shows.

Last year Chinese automaker Geely, which runs its operations in Alibaba’s cloud, ran a one-hour marketing promotion that resulted in the sale of more than 2,000 vehicles.  Clients like Geely know that Alibaba will spin up a lot of servers on short notice when they need the computing power.  They can make 10,000 computers available in a half hour.  Think about that.  Even if you owned 10,000 PCs, it would take you longer than that just to switch them on!

If anyone doubts the coming dominance and rapid build-up of cloud infrastructure, take note that Alibaba is just one of a number of companies with a massive investment in a state-of-the-art data center on the banks of a huge artificial lake.  It’s a massive complex that looks like a bit like a giant server itself.  It sucks and pumps water from the lake to cool down its seemingly countless servers.  Eventually the water runs through a canal and back to the lake.  In winter, that water is actually used to heat the office.  Amazon employs a similar approach in Seattle and also in Switzerland.  Data centers in Scandinavia, Iceland and Greenland are or will be employing their geothermal landscapes to much the same purpose, keeping those servers cool and humming non-stop.

As to why it’s a big deal: this is how people shop now.  China’s Singles Day event is proof of concept, where 500 million consumers now comprise its middle class.  That will only grow.  It’s already a $5 trillion market.  And within about 4 years, it is predicted that China will account for about 60% of global e-commerce.  Win China, and as Forbes Magazine recently noted, you win the world.

 

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Cloud storage services have become big business.  And a handful of familiar names are quickly grabbing up ownership of most of it.

For starters, Amazon is by far the largest cloud provider today, garnering (according to Amazon Web Services CEO Andy Jassy) “several times as much business as the next 14 providers combined.”

Microsoft is next largest in terms of sales of the infrastructure services that store data and run applications.  But at last read, they were still less than one-fifth Amazon’s size.

And Google places third, even though they are now by market value the second-largest company in the world, though with only about one-fifteenth of Amazon’s cloud business revenues.

Still, Microsoft and Google aren’t standing still.  Microsoft’s cloud unit, called Azure, has won over some large customers lately including Bank of America and Chevron.  They are said (according to a recent article in Businessweek) to have done it by focusing on salesmanship and relationship building skills, something not necessarily the forte of the Amazon business model.  Microsoft CEO Satya Nadella has pushed his sales force into “a roving R&D lab and management consultancy.”  They’re hooking up smaller startups with potential investors and giving larger prospects access to a sales team that helps them market their Azure-based apps to their own customers.  Win-win.

Microsoft is also increasingly moving its traditional Office suite to the cloud via initiatives like Office 365 and the new Dynamics 365 products and branding.  This makes it more likely that when companies consider moving off their own data centers they’ll consider Microsoft favorably, exploiting that existing relationship when it comes to migrating to a public cloud.

To step up its game, Google recently hired the co-founder of VM Ware, Diane Greene, to run its cloud business, starting with a cloud sales force they are building from scratch.  Google also recently announced a partnership with Salesforce.com to take advantage of its list of preferred cloud providers, according to Businessweek.

One big advantage both Google and Microsoft will try to exploit over Amazon is the fact that Amazon often competes fiercely with many of its own prospective cloud clients.  Wal-Mart and others are not keen on seeing their AWS payments benefit the very retailer they most compete against.

It’s still too early to say who will end up on top, but the battle is fierce, and you can expect all three of these tech titans to be in that mix for years to come.  It’s already a $35 billion market that’s projected to grow to about $90 billion within four years according to Gartner analysts.

As AWS’s Jassy notes, “This is the biggest technology shift of our lifetimes.”

 

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