Amazon eyeing Alexa for digital ads: Some of the world's largest consumer goods companies have had discussions with Amazon about advertising and product placement through the Alexa voice assistant, according to a new report from CNBC. The companies reportedly include Proctor & Gamble and Clorox:
Some of the early discussions have centered on whether companies would pay for higher placement if a user searches for a product such as shampoo on the device, similar to how paid searches work in Google.
The move by Amazon, which right now does very little advertising on the Echo, could mean big things for consumer companies that are fretting their influence on a voice-powered shopping experience.
With Alexa's clout anticipated to rise, brands are worried about being left out of the voice-shopping platform entirely. Advertisers and brands are particularly focused on search placement on Alexa because shoppers are more likely to select a top result on a voice assistant than they are on the web, where it's easy to scroll down or ignore written suggestions.
POV: Right now, Amazon allows advertising on Alexa in a limited manner. For example, a podcast or streaming radio channel can have ads as long as the voice doesn't sound like Alexa, refer to Alexa or mimic its interactive style.
Amazon says it sold tens of millions of Echo devices over the holiday shopping season, and market estimates have it with nearly three-fourths of the voice assistant market overall. The number of third-party Alexa apps is also rising, with the total of Alexa skills reaching 25,000 last month. It's a large and rapidly growing target for advertising, particularly when combined with Amazon's rich trove of user data.
Therefore, it's a safe bet that advertising will soon be more pervasive on Alexa; the question will be how well Amazon manages the user experience and advertising policies going forward. In any case, CMOs should have a plan for voice assistant ads on their radar going into 2018.
This was bound to happen sooner or later, says Constellation VP and principal analyst Cindy Zhou. "If you look at the Amazon dash buttons, they are branded and I do see the potential ad revenue for Amazon with sponsored voice searches," she says. For example, if you say now "Alexa, what deals are available?" it reads off the different products exclusive to voice shopping, Zhou notes. "I imagine Amazon working these into the Alexa offers and providing a preferred position when reading out deals," she adds. "I can see brands bidding to be read first through third as most people lose patience, similar to reading only page one or two of search results."
Microsoft buys Avere to boost high-end Azure workloads: Redmond has made its first acquisition of the new year, and the target is hybrid and high-performance computing workloads for Azure. Microsoft is paying an undisclosed sum for Avere Systems, a Pittsburgh company focused on flash storage and advanced file systems.
Formed in 2008, Avere's products optimize on-premises storage installations while helping efficiently move HPC workloads to the cloud when they make financial and logistical sense. Customers include Sony Pictures, John Hopkins University, the Centers for Disease Control, the Library of Congress and Turner Broadcasting. Its CEO, Ron Bianchini, founded Spinnaker Networks, which was sold to NetApp for $300 million in 2003.
Avere has raised about $86 million in venture funding since its inception. Google participated in the most recent round, but it's unclear whether the acquisition was a competitive process between Microsoft and other players.
POV: It's interesting to note that Avere has existing partnerships with both Amazon Web Services and Google Cloud Platform; it's not clear what will become of those arrangements once the Microsoft deal is closed. Google actually named Avere its cloud platform partner of the year in 2015, and indications are that it's currently ahead of Microsoft in terms of integration with Avere's technology. Avere plays in a fairly crowded space, which suggests its technology stood particularly well to Microsoft, which had many choices.
Overall, Avere looks like a good complement to a previous HPC-related acquisition Microsoft made in August, of Cycle Computing. That company developed CycleCloud, a software platform for orchestrating and managing high-end computing jobs on the cloud. In a blog post, Microsoft noted that HPC is becoming relevant to many more industries in the past as they seek to take advantage of machine learning:
Whether it’s building animations and special effects for the next blockbuster movie or discovering new treatments for life-threatening diseases, the need for high-performance storage and the flexibility to store and process data where it makes the most sense for the business is critically important.
Avere also helps build out Microsoft's hybrid cloud play, which got a big boost last year with the release of Azure Stack, which allows companies to run the Azure software stack in their own datacenters. (Go here for Constellation VP and principal analyst Holger Mueller's take on Azure Stack.)
As for Avere, "the cloud is becoming vertical, and Microsoft buying a media specialist in Avere is a proof point," Mueller says. While Avere is specialized in media and specific file formats, it is a rather late move by Microsoft, given that much of the media and streaming content out there already sits on infrastructure," he adds."
Black hat hacker gifts IoT botnet code to the world: A hacker posted source code over the Christmas holiday for an IoT botnet that takes advantage of a weakness in Huawei routers, raising the specter of a new wave of crippling botnet attacks as the year begins.
Dubbed Satori, the malware is a variant of Mirai, the notorious botnet that took down some of the world's largest websites last year. The hacker posted the code to Pastebin, according to Ankit Anubhav, principal researcher at IoT device security vendor NewSkySecurity.
Check Point had discovered the vulnerability in December and reported it to Huawei, which has issued a fix. But the subsequent release of the code should result in it being exploited by "script kiddies and copy-paste botnet masters," Anubhav wrote.
The real problem is that IoT attacks "are becoming modular day by day," he added. "When an IoT exploit becomes freely available, it hardly takes much time for threat actors to up their arsenal and implement the exploit as one of the attack vectors in their botnet code."
POV: It remains to be seen how much impact Satori has going forward, but in general, the state of IoT device security remains woeful and shows little sign of broad improvement. The holiday season, during which many millions of new Internet-connected devices were purchased, has massively increased the attack surface. That situation and a lack of best security practices around IoT are a recipe for pain, if not disaster.