Digital Transformation Digest: Amazon Prime's Explosive Growth, Next-Gen Chips Go 3-D, and More

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Amazon Prime's explosive growth: Amazon's recent move to acquire upscale grocer Whole Foods has turned plenty of heads. One likely reason Amazon bought the chain is to add more physical locations to its supply chain, thereby improving its ability to deliver not only fresh foods but other products, and also take in returns.

A big part of Amazon's business is driven by its Prime membership program. While the company doesn't reveal the number of Prime members, new data from Consumer Intelligence Research Partners says growth is soaring. There are now 85 million Prime members in the U.S., a 35 percent increase from a year ago, and double that of two years ago, as Geekwire reports.

Prime memberships have an annual fee but in return members get two-day shipping on many items as well as access to Amazon's video content service.

POV: To put CIRP's numbers in perspective, about 325 million people live in the U.S., meaning Amazon has more than one-fourth of the country signed up for Prime. Amazon has been an major force in supply chain management and logistics best practices, and as it manages Prime's growth its influence will only continue to rise.

New 3-D chip design advances Moore's law: Researchers at MIT and Stanford have come up with a radical new chip design geared for the next generation of massive-scale data processing, which doesn't even use silicon. Here are the key details from MIT's news service:

Instead of relying on silicon-based devices, the chip uses carbon nanotubes, which are sheets of 2-D graphene formed into nanocylinders, and resistive random-access memory (RRAM) cells, a type of nonvolatile memory that operates by changing the resistance of a solid dielectric material. The researchers integrated over 1 million RRAM cells and 2 million carbon nanotube field-effect transistors, making the most complex nanoelectronic system ever made with emerging nanotechnologies.

The RRAM and carbon nanotubes are built vertically over one another, making a new, dense 3-D computer architecture with interleaving layers of logic and memory. By inserting ultradense wires between these layers, this 3-D architecture promises to address the communication bottleneck.

Researcher Max Shulaker explains that silicon-based chips are two-dimensional by necessity, given the high temperatures involved in manufacturing them. If companies were to layer additional sets of circuits on top of each other, the heat would damage the chip. In contrast, nanotubes and RRAM chips can be made at lower temperatures, he said.

POV: The work was funded by a combination of academic, government and private organizations and it's not clear when commercial versions of the chips will be available. But on the face of it, this is the type of innovation that will be needed to advance next-gen applications, IoT and cloud computing.

Illinois' dramatic digital transformation: The U.S. state of Illinois once had 38 different IT departments. Now it has one, after an ambitious effort led by state CIO Hardik Bhatt. He spoke to the Enterprisers Project about the process:

This brought 1,500 employees together. We organized this new department into seven horizontals, which include cybersecurity, project management, application development, and infrastructure, for example, and seven verticals, like health and human services, public safety, tourism, etc. Each of those seven clusters has a CIO who provides leadership for all of the agencies, and they all report up to me.

Bhatt also talks about Illinois' digital government and "smart state" initiatives in the interview, which is well worth a read.

Legacy Watch: The U.K.'s IT project failure maelstrom: Now for a contrasting item to Illinois. Nearly 40 percent of current IT projects in the U.K. are set to fail unless changes are made, according to data from Axelos, a joint venture between the U.K. government and Capita, as the Register reports:

Asked why IT projects fail, responded blamed: significant changes to the project brief (45 per cent); unrealistic timeframes (41 per cent); an incomplete understanding of the risks (48 per cent); projects not resourced with the right people (42 per cent); lack of a clearly defined goals (49 per cent), and overrun budgets (32 per cent).

Axelos surveyed 182 project managers for its study. The organization was formed in 2014 and its remit is to improve IT project best practices

Digital Transformation Digest: ARM Invests In IoT, Privacy Advocates Press 'Five Eyes,' and More

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Welcome to Digital Transformation Digest, Constellation's daily compendium of news and analysis covering forward-thinking enterprises, mega-vendors, startups and developers.

ARM's Interesting IoT Move: Sometimes the price tag of a technology industry acquisition belies its symbolic significance. Such is the case with chipmaker ARM's £11.7 million purchase of Simulity Labs, which makes eSIMs (embedded subscriber identity modules), as V3 reports:

eSIMs are a new version of a standard SIM card which are not replaceable, often soldered directly to a circuit board. They are used in M2M/IoT applications, where there is no need to change the SIM card, and can also be used in remote SIM provisioning (switching a SIM between providers through software).

POV: "The difference between the design and specification of chips for use in IT-oriented devices such as servers and PCs, and chips for the millions of endpoint devices that are part of IoT is seen clearly in this acquisition," says Constellation Research VP and principal analyst Andy Mulholland. "Adding discrete SIM functionality to ARM's expertise in mobile technology is a powerful move that suggests ARM has a clear competitive vision for the high-growth IoT market."

Eyes on Five Eyes: The Five Eyes Alliance, comprised of the U.S., U.K., Australia, Canada and New Zealand, dates to 1946 and is based on intelligence sharing, counterterrorism and other national security issues. The problem, says the UK nonprofit group Privacy International, is that it has operated essentially in secret for far too long. PI wants a U.S. court to shed some light on the Alliance:

The most recent publicly available version of the Five Eyes surveillance agreement dates from 1955. Our complaint was filed before the U.S. District Court for the District of Columbia.

For years, PI has tried to obtain information about the agreement and the rules governing the Five Eyes alliance via freedom of information requests and other methods.

In the US, PI has made freedom of information requests to the National Security Agency, the Office of the Director of National Intelligence, the State Department, and the National Archives and Records Administration. All four agencies are subject to the Freedom of Information Act and all agencies have withheld the records PI seeks.

Our complaint seeks to compel disclosure of the current version of the agreement and records relating to the rules governing the government’s exchange of intelligence with the other members of the Five Eyes alliance.

PI "is seeking the agreement’s legal standards and limitations, not operational details," the statement adds.

POV: It's not clear whether PI's effort will be successful, but the Five Eyes Alliance does play a crucial role in privacy policy. Go here to read Constellation Research VP and principal analyst Steve Wilson's take on how the group can best set guidelines around cryptography.

Integrating data integrators: Private equity firms have made aggressive investments in enterprise software companies over the past 12 to 18 months. The trend is continuing with a $1.26 billion deal between Clearlake Capital and Centerbridge Partners that will merge data-integration vendors Syncosrt and Vision Solutions.

The company will go forward under the Syncsort name. Syncsort started out with a focus on data-sorting for mainframes but has since broadened its focus toward other types of data transformation. It positions itself as a "Big Iron to Big Data" specialist. Vision Solutions, meanwhile, focuses on data protection and backup for IBM Power Systems.

POV: Go here for a look at Constellation VP and principal analyst Doug Henschen's in-depth profile of Syncsort. As for this week's announcement, it makes a good deal of sense, Henschen says.

"Where Syncsort has long specialized in data-integration and processing options for the mainframe, Vision adds cloud migration, cloud backup and cloud disaster-recovery-as a-service for IBM Power, including IBM i and AIX deployments," he says. "It's a one-stop-shop that offers a broader and more cloud-centric focus than Syncsort could previously support."

Legacy Watch: The VAs half-billion dollar boondoggle: Cost and timeline overruns are sadly nothing new when it comes to U.S. government IT projects, but a particularly troubled effort at the Veterans Administration stands apart from the pack.

Hewlett-Packard Enterprise Services was awarded a $543 million contract four years ago to create a real-time tracking system for medical devices. A major reason for the project was a desire to ensure equipment is regularly sanitized in order to prevent disease and death, the Austin American-Statesman reports:

But the contract has been beset by a host of problems, including failed operational tests, questions over the reliability of equipment tags and fundamental concerns over whether the department’s WiFi can support the system, according to thousands of pages of emails, reports and documents obtained by the American-Statesman using the Freedom of Information Act.

The issues come as the VA prepares to replace its pioneering but ancient medical records system, VistA, at a cost of up to $16 billion. While VistA is 40 years old, its lack of viability going forward isn't due to core structural reasons, but rather neglect on the part of government officials, as an in-depth Politico report compellingly argues.

The Time Is Now for a Public Debate Over Cryptography Policy

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Steve Wilson

Former Vice President and Principal Analyst
Constellation Research

Steve Wilson is former VP and Principal Analyst at Constellation Research, leading the business theme Digital Safety and Privacy. His coverage includes digital identity, data protection, data privacy, cryptography, and trust. His advisory services to CIOs, CISOs, CPOs and IT architects include identity product strategy, security practice benchmarking, Privacy by Design (PbD), privacy engineering and Privacy [or Data Protection] Impact Assessments (PIA, DPIA). Coverage Areas: -  Identity management, frameworks & governance-  Digital identity technologies-  Privacy by Design -  Big Data; “Big Privacy”-  Identity & privacy innovation Previous experience: Wilson has worked in ICT innovation, research, development and analysis for over 25 years. With double…...

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Last week, the so-called "Five Eyes" nations of Australia, Canada, the U.K., the U.S. and New Zealand took part in their annual meeting on counterterrorism, intelligence-sharing and cybersecurity. While cryptography, particularly ways law enforcement could get around it in the interest of fighting crime, was expected to be a major part of the agenda, an official communication issued following the meeting hardly mentions cryptography, and does so in fairly bland, noncommital terms:

[E]ncryption can severely undermine public safety efforts by impeding lawful access to the content of communications during investigations into serious crimes, including terrorism. To address these issues, we committed to develop our engagement with communications and technology companies to explore shared solutions while upholding cybersecurity and individual rights and freedoms.

This vaguely worded commitment does little to advance an important issue, says Constellation Research VP and principal analyst Steve Wilson. "A genuine crypto policy debate needs to be had, and needs to be seen to be had," Wilson says.

The 1990s saw widespread debate over cryptography, one that didn't really have a winner, Wilson notes. "Most cryptographers said that encryption should be commercially available, that export controls were counterproductive, that government control was futile and that our enemies would roll their own," he says. While these points were not necessarily accepted by governments, there did come a detente whereby access to cryptographic technologies was freed up.

Today the argument has moved to new fronts. In the U.S., the FBI's demand that Apple create a backdoor allowing access to an alleged terrorist's iPhone prompted strong pushback from the company and public. (The Bureau ultimately hired outside help to crack the phone.)

"There are strong technical arguments that forcing exceptional access mechanisms into encryption algorithms will weaken the systems, making them more vulnerable to criminal attack," Wilson says. "But the arguments are difficult and technical. Most lay people, lawmakers include, continue to harbor naive visions of how encryption works, which leads to presumptions that cyber lock-picking is doable. Backdoors make encryption vulnerable by design and that's a bad thing."

However, civil libertarians and technologists shouldn't reject the governments' desires out of hand, Wilson said. Points to consider:

• Has the threat of terrorism and organized crime become quantitatively and qualitatively worse since the 1990s?
• To what extent are unbreakable, encrypted messages being used by terrorists? Are there no side channels, metadata or insiders available to law enforcement to monitor criminal activity?
• Have there been mathematical advances in the past 20 years that might enable new ecryption methods with safe backdoors?

"I'm not a good enough cryptographer or social scientist to know the answers, but I do know the right people to ask," Wilson says. "I know that we need to ventilate these issues, engage the experts and trust their answers, if we are to move on without too many further distractions."

Digital Transformation Digest: Microsoft Shakes Up Sales Org, Baidu Doubles Down on AI, and More

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Microsoft shakes up its sales org: Reports began emerging just prior to the U.S. holiday weekend that Microsoft was about to undertake a major reorganization of its sales force with an eye on shifting emphasis toward cloud sales. The timing coincides with the end of Redmond's fiscal year on June 30. While Microsoft itself has been fairly mum about the details, it did confirm changes are being made "to better serve our customers and partners."

Geekwire obtained a copy of an internal memo outlining those changes, which are set to be rolled out as soon as this week. The major ones include a business model segmentation into enterprise and SMC (small, medium and corporate) customers. Microsoft is also aligning enterprise sales teams around six verticals, which include manufacturing, financial services, retail, health, education and government, according to the site.

POV: It's hard to run a business these days without some level of interaction with Microsoft, and that means these organizational changes could be widely felt. It's also no surprise that Microsoft is trying to re-orient sales around cloud. But this type of reorg is standard for Redmond as it begins each new fiscal year, so time will tell if the changes are lasting or prove to be merely experimental. Constellation will have more on the Microsoft reorganization later this week.

Baidu makes more big moves in AI: While Chinese Internet giant Baidu is still mostly a consumer-focused company, one of many reasons to keep tabs on it from an enterprise perspective is its ongoing investments in artificial intelligence. Just a few months after unveiling Project Apollo, an open-source platform for autonomous vehicles, Baidu has announced that more than 50 partners have joined the ecosystem. They include car manufacturers such as Ford and Daimler; suppliers such as Bosch, NVIDIA and TomTom; and ridesharing companies, startups and universities.

Baidu's intentions for Apollo are grand. COO and group vice president Qi Lu, a former key executive at Microsoft, termed Apollo "the 'Android' of the autonomous driving industry," yet more open than the mobile OS, as Venturebeat reports.

Meanwhile, Baidu also announced the acquisition of Kitt.ai, a Seattle-based chatbot platform startup. Kitt.ai has more than 12,000 developers already using its Snowboy hotword detection service, with products deployed in smartphone apps, cars, homes and other locations, according to a company blog post.

Oracle CEO Mark Hurd takes a grilling: Oracle recently held a media day at its Redwood Shores, Calif. headquarters and as part of the event, CEO Mark Hurd was interviewed at length by Recode's Kara Swisher and then took questions from analysts and journalists in attendance. The result was one of the livelier sets of interactions you'll see between a top vendor executive and the ink-stained classes.

Now Recode has helpfully provided a full transcript of the event, which is well worth a read. Sure, Hurd gets in his talking points and manages to get in some of his trademark filibustering, but for the most part he's kept on his toes.

Legacy watch: The IT industry's 'working dead': Technologies come and go in the IT industry, and with them related careers and job roles. CIO.com has published a must-read feature (note: registratin required) on some of the latest tech gigs on the chopping block. The list has some usual suspects, such as COBOL programmers, that we suspect will be able to survive much longer than they have already. Still, the post is full of smart observations such as this one from James Stanger of industry group CompTIA:

“The IT jobs I see threatened are the repetitive ones and those that focus on only one type of OS or vendor system,” he says. “Today it’s not about the vendor or OS; it’s about where the information resides and how useful you are at storing, manipulating, and securing that information. It's all about connecting multiple systems now.” 

Digital Transformation Digest: Net Neutrality's Fate Sealed?, Adobe Meets Alexa, Next-Gen Java Ready to Pour

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Welcome to Digital Transformation Digest, Constellation's daily compendium of news and analysis covering forward-thinking enterprises, mega-vendors, startups and developers.

Net neutrality's fate is sealed a bit tighter: U.S. President Donald Trump has nominated Brendan Carr, the Federal Communications Commission's general counsel, to an open seat on the FCC's board. As the Register notes, Carr is a longtime associate of FCC chairman Ajit Pai, who is a vociferous foe of Net neutrality. Thus, Carr should be a rubber-stamp vote in favor of rolling back the rules, which mandate that telcos treat all web traffic equally, in a vote later this year.

Carr was Pai's personal attorney for three years and was appointed to the FCC post in January. While Carr's nomination is subject to approval from Congress, there is no indication of any stumbling blocks on that front, and once completely filled the FCC board will have a Republican majority led by Pai.

POV: The net neutrality debate goes back 20 years, to the early days of the Internet. While often framed as a consumer-rights issue, net neutrality should be on the radar of enterprises now more than ever, given factors such as the rapid ascent of IoT, the app economy and an overall march into cloud services. All those things will require more and more bandwidth, with strong reliability, availability and predictable, manageable pricing models across both the wired and wireless network infrastructure landscape.

Java 9 finally ready to pour?: While Oracle gained control of Java when it bought Sun Microsystems in 2010, the fact remains that major advancements in the venerable, widely used programming language are governed by an open source community. The current production version, Java 8, was released more than three years ago.

Java 9 has been in gestation ever since, but disagreement among Java Community Process members over the addition of modularity to the language has repeatedly delayed an official release. Oracle has been a strong proponent of the modularity features, saying they will add significant performance and scalability to Java-based applications. Opponents such as Red Hat had argued the specification wasn't ready for inclusion in a formal Java 9 release.

But this week, JCP members voted 24-0 to approve modularity in Java 9, saying enough progress had been made, as InfoWorld reports.

POV: Some readers may wonder why they should care about what from the outside can seem like prototypical academic bickering. But the fact is that Java holds a sizable piece of enterprise IT bedrock, both in terms of commercial applications sold by vendors as well as home-grown ones.

Three-plus years between major releases in the language benefits no one. While modularity is a touted feature of Java 9—which is now set for release in September—it also includes advancements in crucial areas such as security. Oracle has expressed a desire to increase Java's release cadence dramatically once Java 9 is released, with annual updates a goal. That would be a welcome move, but can't happen unless the JCP can shed some red tape.

Adobe wants to hear you talking: Adobe is tapping into the rise of voice-enabled digital assistants for insights into customer behavior and desires, through a new service in its Analytics Cloud. Here are the key details from its announcement:

[B]rands can capture and analyze voice data for all major platforms including Amazon Alexa, Apple Siri, Google Assistant, Microsoft Cortana and Samsung Bixby. The new capabilities address the complexity in measuring voice interactions, with the ability to capture both the user intent (“play me a song”) as well as specific parameters (“from The Beatles”). Additional data points including frequency of use and actions taken after a voice request is made are provided as well.

Through deep analysis of voice data complemented by artificial intelligence and machine learning capabilities in Adobe Sensei, brands can gain robust audience insights and recommendations, while automating the traditionally cumbersome, manual analysis.

Sensei's involvement will give teams more time to work on improving their voice services' core capabilities, Adobe says.

POV: This is a smart move by Adobe, says Constellation Research VP and principal analyst Cindy Zhou. "As more consumers utilize voice-enabled assistants to manage their day, shop, and find answers to questions, they are contributing valuable data on their habits and intent," she says. "Brands in turn can perform even more targeted searches for lookalike customers or provide improved personalization of offers."

Legacy Watch: Mainframe outage drives Hawaii DMV to a halt: Problems with a mainframe that services DMV branches all over the state of Hawaii have essentially shut operations down all week, with no resolution in sight.

Motor vehicle registration, drivers licensing, state ID’s, moped registration, out of state license and vehicle transfers and "any and all transactions which require logging into the state database" have been affected, according to a press release from the county of Maui.

The DMV is asking that only customers with "urgent needs," such as an about-to-expire driver's license, come down in person for service, the release adds.

Interestingly—but perhaps not surprisingly—the problem isn't related to the mainframe hardware, Hawaii News Now reports:

The issues began on Monday after the system was shut down for maintenance over the weekend, according to Keith Ho, the city's Deputy Director of Information Technology. The problem, Ho says, is a result of the city trying to run old software on a brand new mainframe.

"We turned the system down on Sunday, so that we can do backups, and then when we brought it up on Monday, we started to see (the slowdown), says Ho. "Because not a lot of people are using it on Sunday, maybe just police doing inquiries, we didn't know until Monday (that there was a problem)."

POV: Nobody likes to go to the DMV, but it's a necessary evil. The Hawaii DMV's situation is a good example of how much inconvenience it can cause the public when critical systems like this go down. It's also another reminder of how much legacy assembler and COBOL code, much of it decades old, is still out there and in some cases can be a ticking time bomb.

Digital Transformation Digest: Grocers Respond to Amazon-Whole Foods, Database Startup with NSA Roots Cashes In, and Much More

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.  Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members.  Prior to joining Constellation, Kanaracus spent seven years covering the enterprise software industry for IDG News Service, where he frequently broke exclusive stories with a focus on end-customer issues. Kanaracus has also held various managerial and reporting roles at newspapers in New England since 1998. Twitter: @chriskanaracus , Title: Big IdeasConstellation Insights Insights delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to Constellation Executive Network members. ...

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Welcome to Digital Transformation Digest, Constellation's daily compendium of news and analysis covering forward-thinking enterprises, mega-vendors, startups and developers.

Amazon-Whole Foods deal spurring grocers to transform: The Albertsons grocery chain is planning to overhaul its e-commerce systems in the coming year to better serve customers and shore up its play in food delivery, the Wall Street Journal reports. The move comes in the wake of Amazon's $13.7 billion deal to buy Whole Foods, a organic foods chain Alberstons was reportedly interested in buying earlier this year.

There's still time for counter-offers to come in for Whole Foods, possibly from Albertsons or Walmart. The latter is the U.S. grocery market share leader, with various estimates ranging from 15 to 20 percent, but Albertsons is no small player, with more than 2,000 stores and $60 billion in revenue. (Another suitor could be Kroger, which already has a robust organic foods business and is the second-largest U.S. grocer after Walmart.)

Beyond technology, Albertsons has invested in e-commerce related talent, bringing in executives from Macy's, Levi's and Disney with an eye on applying fresh ideas to the grocery space.

POV: While Amazon certainly has the infrastructure and potential to scale up a major grocery delivery business, it's interesting to note that Whole Foods, on a revenue basis, barely moves the needle toward that goal, given it has just about 1 percent of U.S. market share.

However, in terms of accelerating transformation in the grocery industry, the deal is clearly feeding the fire, evidenced by Albertsons' plans and no doubt many other chains. It could also help drive more business toward grocery delivery startups such as Instacart—a current Whole Foods partner—as chains choose to outsource. Overall, there are changes coming to the grocery business that will be felt by consumers going forward.

As for those potential counter-offers for Whole Foods? Here's how to look at that scenario, says Constellation Research founder and CEO R "Ray" Wang. For one, Amazon wants high-end customer data and Whole Foods delivers that. "It has distribution and customers, but needs data for pricing and selection," Wang says. "Other acquirers are seeing scale in their own industry but really need a technology or marketplace partner. Buying another grocery is really stupid. But if they bought Pepsico for distribution, that'd be interesting."

"Amazon is cross-industry and working across industries," he adds. "Other grocers who put in a bid are just there to raise the price. If they do buy Whole Foods, they’ll just kill it over time because their business models are not a good fit."

Encryption ends up low priority at Five Eyes meeting: This week, the "Five Eyes" nations of Australia, Canada, the United Kingdom, the U.S. and New Zealand held their annual meeting on intelligence, counterterrorism and cybersecurity measures in Ottawa. Many observers expected the two-day meeting to result in some concrete proposals around cryptography, specifically how law enforcement could circumvent it in the name of fighting and solving crimes.

But the official joint communication released after the meeting spends just a couple sentences on cryptography, and appears to essentially punt the problem toward technology companies:

[E]ncryption can severely undermine public safety efforts by impeding lawful access to the content of communications during investigations into serious crimes, including terrorism. To address these issues, we committed to develop our engagement with communications and technology companies to explore shared solutions while upholding cybersecurity and individual rights and freedoms.

POV: Go here to read Constellation Research VP and principal analyst Steve Wilson's take on why the encryption debate is far from simple.

Meet Kinetica, the GPU-powered database with NSA roots: Kinetica, an in-memory relational database startup that leverages NVIDIA GPUs in conjunction with commodity hardware, has scored $50 million in Series A funding, with investors including former Oracle president Ray Lane.

Kinetica's founders, Amit Vij and Nima Negahban, were hired in 2009 by the National Security Agency and U.S. Army Intelligence Security command to create a real-time terrorist tracking system. The database is now on its sixth product release but even the initial version was reportedly quite impressive, as Vij said in a statement:

At the time, our database ingested data from more than 200 different streaming big data feeds. This included drones that tracked every asset that moved at 30 frames per second; mobile devices that emitted their metadata every few seconds; social media like Twitter and Facebook; and cyber security data. We were evaluating billions of signals to find that needle in the haystack.

Current customers include GlaxoSmithKline and the U.S. Postal Service. Its being used in multiple ways, such as fraud detection, smart grid management, supply chain management, genomics research, and deep learning and machine learning.

POV: Kinetica is not the only company working on GPU-accelerated database technology, but would seem to have the early mover advantage given how long it's been in existence, and the success it's had gaining marquee customers.

The size of the Series A round, at $50 million, is much higher than typical, suggesting that Kinetica's investors are quite bullish on its prospects. Kinetica will use the money to increase engineering, sales and marketing headcount from the current 75, as well as open more offices around the world.

"The sweet spot for Kinetica has been interactive, geospatial analyses at scale, which has appealed to customers including government agencies, big retailers and big utilities," says Constellation Research VP and principal analyst Doug Henschen. "Advanced visualization capabilities have also appealed to pharmaceutical and healthcare companies."

While data-intensive geospatial and visual analyses are often performance constrained, Kinetica says its GPU-accelerated database and visual analytics platform can deliver up to 100 times faster performance than conventional systems using one-tenth the hardware, he adds. With the 6.0 release it's also diving into advanced in-database analytics applications combining machine learning and deep learning workloads, for which it's using libraries including TensorFlow, Caffe and Torch, Henschen notes.

GPU-accelerated databases have a bright future, so they're attracting healthy financial backing. In March, Kinetica competitor MapD raised $25 million in a Series B round. "GPU hardware remains exotic and unfamiliar to mainstream enterprises, however, so we're not yet in the hockey stick growth phase," Henschen says. "I expect continued experimentation, particularly in cloud environments where marketing partnerships could make a difference for these vendors. GPU-based systems won't thrive in isolation, so vendors and practitioners will have to ease the technical bottlenecks—such as getting high-scale data in and results out—of using these systems in concert with conventional systems and data platforms."

Microsoft gets multi-cloud friendly with Cloudyn buy: Microsoft has agreed to buy Israeli startup Cloudyn, which offers tools for managing consumption, spending and performance across multiple cloud services. The price tag was between $50 million and $70 million, Techcrunch reported.

While that sum is a rounding error on Microsoft's balance sheet, the deal has symbolic significance. Cloudyn was already a Microsoft partner, but supports other clouds as well as Azure. Judging from the tone of a blog post by Microsoft's Jeremy Winter, this approach may continue. Winter also notes that Cloudyn's tools helped a U.S. based Fortune 500 company realize a 286 percent return on investment.

POV: Cloudyn's capabilities could make Azure more attractive to customers, and certainly Microsoft wants to bring as many workloads to Azure as possible. However, Constellation believes that multi-cloud is the approach most enterprises need, whether they realize it now or not. Therefore, keeping Cloudyn open to other competitors would be the right move for Microsoft.

"Cloud economics are the key questions customers try to get on top of before making platform deployment decisions," says Constellation Research VP and principal analyst Holger Mueller. "The question is, as part of Microsoft can Cloudyn still be the independent, impartial third party that tracks cloud infrastructure costs and makes recommendations in regards of where loads should run?"

Legacy Watch: Medtronic's ERP integration woes: Medical-device giant Medtronic has brought a key system for customer orders and manufacturing back online after a nearly week-long outage, as the Minneapolis/St. Paul Business Journal reports.

Medtronic bought competitor Covidien in 2015 for $50 billion and has been working to bring the company onto its ERP system. A Medtronic spokesman "wasn't sure" whether the system outage was related to that project, according to the paper, but it's not too difficult to connect the dots.

POV: The thought of a week-long outage for a system that critical should make any CIO break out in cold sweat. Medtronic says it doesn't believe the outage will impact its earnings, but that remains to be seen. It is conducting a root-cause analysis of the problems; should it make those results public, they could have some valuable insights into the pitfalls of major systems migration.