Digital Transformation Digest: Starry Internet Eyes National Expansion, Macy's Digital Drive Continues, California Struggles to Launch Pot-Tracking System

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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Cindy Zhou

CMO
Level Access

Cindy Zhou is a practicing CMO.  Prviously, she was Vice President and Principal Analyst at Constellation Research covering Digital Marketing Transformation and Sales Effectiveness. With over 18 years of practitioner experience in corporate marketing, product marketing, product management, and sales operations, Zhou has spearheaded marketing transformation at multiple technology companies. She advised Constellation’s clients on strategies to light-up demand generation, prove revenue contribution, and maximize sales productivity. Prior to joining Constellation, Zhou was Global Senior Vice President of Marketing and Sales Operations at BackOffice Associates, a global provider of data quality and information governance solutions to the Fortune 1000 and SAP SolEx partner. Before…...

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Starry Internet eyes expansion in 2018: After a couple of years testing its unique wireless broadband service in the Boston area, Starry Internet is set to expand coverage to Los Angeles and Washington, D.C. in the near future, with plans for more than a dozen other major market additions over the course of the year. 

The company's service uses base stations mounted on rooftops that deliver Internet connections via high-frequency millimeter waves. Devices placed at and inside subscribers' homes capture the signals, convert them to lower frequencies and create a wifi network. Starry says it can offer 200MB broadband for $50 a month, a claim that has drawn its share of skepticism.

Company CEO Chet Kanojia is known for his previous startup, Aereo, which used antennas to capture and stream local TV channels. The company failed when the U.S. Supreme Court ruled its business model was in violation of the law.

POV: The notion of ultra-fast, affordable wireless Internet is a tantalizing one, particularly in light of the recent FCC vote overturning net neutrality laws. In fact, Starry has made net neutrality a centerpiece of its marketing efforts, saying it will never throttle customer data or block any websites. 

But there are serious challenges standing in its way. Any wireless network is at heart a real estate play; it's not trivial to site and build a cellular tower, particularly in expensive urban areas. Starry's infrastructure has a much smaller footprint, but its use of millimeter waves has drawbacks, namely a much shorter range than other technologies. If Starry is going to offer broadband at scale it will need to blanket urban areas with base stations, and each will require negotiations with building owners.

Then there is the question of how entrenched carriers will respond. If Starry's plans work out, they will not stand idly by. To that end, millimeter waves are hardly new or exclusive to Starry. While it has had a couple of years to develop special hardware and run limited beta tests, players with bigger resources pose a clear threat.

Ultimately, innovation in wireless broadband is a good thing, however. It will be interesting to see how the year unfolds for Starry.

Macy's digital drive still work in progress: Venerable department store chain Macy's reported that sales for the November-December holiday period rose 1.1 percent year-over-year, but at the same time announced plans to close 11 more stores, including one in downtown Miami. Four of the stores, including one in Los Angeles, had already been disclosed as slated for closure.

Macy's announced plans to close 100 locations in August 2016 and with the latest batch, will have completed 81 of of them. In total, the chain has shuttered 124 stores since 2015.

There are multiple store brands among Macy's holdings, including Bloomingdale's and Blue Mercury. Holiday sales were spurred by strong performance in areas such as fine jewelry, men's tailored clothing and high-end cosmetics.

Macy's CEO Jeff Gennette said in a statement that the company's store closings are all part of a bigger plan:

“Our primary focus in 2017 has been to continue the strong growth of digital and mobile, stabilize our brick & mortar business and set the foundation for future growth. We’ve made good progress on each, including encouraging trend improvements in our brick & mortar business. A healthy store base combined with robust digital capabilities is Macy’s recipe for success."

POV: Macy's results announcement doesn't mention it, but strong holiday sales on higher-ticket items was likely driven by the chain's Star Rewards loyalty program, which it overhauled prior to the holiday season. Macy's derives half of its annual revenue from the 10 percent of customers who spend at least $1,200 per year there. Those shoppers are now enrolled in the program's Platinum tier, which gives them 5 percent back plus free shipping. It's the brainchild of Gennette, who has been tasked with improving Macy's omnichannel strategy. This element, at least, seems to be working.

Still, Macy's has work yet to do. "They are not doing well with their digital strategy," says Constellation VP and principal analyst Cindy Zhou. "The emails are unfocused and it's challenging to find associates to help in-store. They need to focus more on personalized customer engagement and how to improve their digital-to-in-store experience."

California's marijuana-tracking system has yet to fire up: The Golden State is unfortunately notorious for a long string of wildly expensive, poorly executed government IT projects. The latest could end up being a system that is supposed to track recreational marijuana sales, now that the drug was legalized for that use on Jan. 1. Here are the key details from an Associated Press report:

California’s legal pot economy was supposed to operate under the umbrella of a vast computerized system to track marijuana from seed to storefronts, ensuring that plants are followed throughout the supply chain and don’t drift into the black market.

But recreational cannabis sales began this week without the computer system in use for pot businesses. Instead, they are being asked to document sales and transfers of pot manually, using paper invoices or shipping manifests. That raises the potential that an unknown amount of weed will continue slipping into the illicit market, as it has for years.

For the moment, “you are looking at pieces of paper and self-reporting. A lot of these regulations are not being enforced right now,” said Jerred Kiloh, a Los Angeles dispensary owner who heads the United Cannabis Business Association, an industry group.

POV: State officials say the system has been "implemented," but it's not clear when the necessary training dispensaries need on it will be complete, or when its use will be firmly mandated. Overall, the project has a number of moving pieces, a factor that can often lead to delays and overruns.

The voter referendum legalizing recreational marijuania in November 2016 also dictated that the state begin issuing licenses for it by Jan. 1. Several state agencies are involved in the regulatory process, and the licensing system will actually consist of two software platforms, one from Accela and another from Pegasystems. There are also multiple systems integrators working on the project. Finally, there is a track-and-trace system component, which hadn't even been procured as of last June.

California is banking on recreational marijuana generating substantial tax revenue, so getting the system up and running soon is paramount. But rushing its completion may only lead to more problems; this may be a case when mellowing out a bit is the best option for state officials.

Digital Transformation Digest: Amazon Eyes Alexa for Ad Revenue, Microsoft Acquires Avere for High-End Azure Workloads, 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 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.

Digital Transformation Digest: Amazon and Salesforce's Move Away from Oracle, Adblocker War Heats Up, Tech Conferences to Watch

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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Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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Amazon, Salesforce reportedly moving off Oracle: The Oracle database lies at the core of untold numbers of applications and enterprise IT environments, including those at Amazon and Salesforce. But that reportedly may not be the case for good, as both companies have active efforts underway to move off Oracle to alternatives, according to a report in the Information.

The progress has been fairly significant at Amazon; it has moved its customer master and order master databases to a NoSQL platform, according to the Information's report. Salesforce has been working on an Oracle alternative with the code-name Sayonara, which was first reported by Fortune in mid-2016. It has been rumored for years prior to that report Salesforce was investigating a move onto PostgreSQL.

POV: The report comes at an interesting time for Oracle, which is about to launch the newest version of its database. The update will give the platform the ability to patch itself on the fly; Oracle CTO Larry Ellison has dubbed it a "self-driving" database, playing off the interest in autonomous vehicles. Oracle believes the new version will spark a wave of workload migrations to Oracle's cloud. 

Salesforce may be working on an Oracle exit plan, but will be tied to the platform for the next several years. It signed a nine-year contract renewal with Oracle in 2013 that was reportedly worth $300 million; even so, Salesforce CEO Marc Benioff said at the time that it would cut his database costs in half. (Notably, a source told the Information that Salesforce intends to be completely off of Oracle by 2023.)

Ellison hasn't been shy about bragging how Salesforce and Amazon, both fierce competitors of Oracle's, pay millions of dollars to use its software. If either company succeeds in moving substantially away from Oracle's database, it will provide a case study for other large enterprises in how to pull such a task off.

It might be easier for Salesforce to make a move off Oracle, as it can incrementally shift subscribers and instances, says Constellation VP and principal analyst Holger Mueller. But at the same time, the type of features Oracle is promising in the new database version are just what cloud vendors want, since they can reduce or even eliminate labor costs and human error, Mueller adds.

The ad-blocker arms race heats up: The war over online ads, with users and ad-blocking browser extensions on one side, and marketers and publishers on the other, reached new heights in 2017. One of the biggest developments was Google's decision to add a native ad-blocker to its Chrome browser, which has more than 60 percent market share. Google's blocker will go into action on Feb. 15; it will block only ads deemed overly intrusive under a set of standards laid out by the Coalition for Better Ads, an industry group that includes Google, Facebook and other companies that are highly dependent on advertising revenue.

But while Google's move was high-profile, thousands of the world's top websites have been waging a quieter war against ad-blocking technologies, researchers at the University of Iowa have determined. The researchers developed a system that analyzed the top 10,000 websites on Internet traffic monitor Alexa, and found that 30.5 percent of of them employed anti-adblocking code, a much higher percentage—up to 52 times as many—than previous studies uncovered.

POV: The researchers' paper goes on to detail programming methods aimed at thwarting anti-adblockers. Overall, their work raises provocative questions about a pressing issue for not just large Internet companies but all brands, as well as their customers. As the researchers note, the adblocker versus anti-adblocker war will likely escalate as the year unfolds:

It is crucial that adblockers are able to keep up with anti-adblockers. Moreover, the increasing popularity of adblocking has already led to various reform efforts within the online advertising industry to improve ads ...However, to keep up the pressure on publishers and advertisers in the long term, we believe it is crucial that adblockers keep pace with anti-adblockers in the rapidly escalating technological arms race.

Constellation believes that Google's native Chrome adblocker can have the weight and influence needed to spark significant improvements in the quality of Internet advertising. Companies making investments in online ad programs deserve to get a fair shot at a return on them, but not at the sake of user experience and brand integrity.

Tech conference season kicks off—what's on tap: After a quiet period over the holiday break, the tech conference calendar will be busy this month. Here's a look at the top events and what to expect.

CES: First up is the massive Consumer Electronics Show, which starts Jan. 8 in Las Vegas. The show will feature the usual raft of gadget and audiovisual product announcements, but the biggest conversations will be around around smart cities, autonomous vehicle technology, IoT and the arrival of 5G networks.

NRF 2018: The retail industry's biggest and most important conference kicks off Jan. 14 in New York. Expect a heavier-than-ever emphasis on technology during this year's event, particuarly in areas such as AI and robotics, which will have direct impact on the in-store customer experience.

World Economic Forum: The annual gathering of world leaders takes place Jan. 23-26 in Davos, Switzerland, under the theme "Creating a Shared Future in a Fractured World." While not a pure technology conference by any means, Davos is nonetheless an important setting for discussions on the digital economy.

Constellation's 2017 Enterprise Awards

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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Digital Transformation Digest: DARPA Backs Research Into 'Unhackable' Computer, Walmart's Latest Skunkworks Project

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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DARPA backs research into 'unhackable' computer: The Defense Advanced Research Projects Agency is putting $3.6 million into research focused on the development of an "unhackable" computer. It's a timely investment given the spate of high-profile data breaches and general uptick in cybercrime.

The military agency is giving the research grant to the University of Michigan. Dubbed MORPHEUS, it reflects a $50 million program DARPA launched earlier this year around hardware-based cybersecurity techniques:

"Instead of relying on software Band-Aids to hardware-based security issues, we are aiming to remove those hardware vulnerabilities in ways that will disarm a large proportion of today's software attacks," said Linton Salmon, manager of DARPA's System Security Integrated Through Hardware and Firmware program.

MORPHEUS outlines a new way to design hardware so that information is rapidly and randomly moved and destroyed. The technology works to elude attackers from the critical information they need to construct a successful attack. It could protect both hardware and software.

"We are making the computer an unsolvable puzzle," Austin said. "It's like if you're solving a Rubik's Cube and every time you blink, I rearrange it."

In essence, MORPHEUS is meant to be a bulwark against zero-day exploits, which target vulnerabilities that are previously unknown—except to attackers, of course. Rather than fix vulnerabilities with software patches, the point is to use hardware to eliminate seven key classes of hardware weaknesses, such as buffer errors, permissions and privileges and code injection, the researchers say.

POV: The grant seems a bit light to fund such research on its own, but it's not clear whether the university is relying on other funding sources as well. However, the announcement's framing of the work as outlining "a new way to design hardware" suggests the researchers won't be attempting to fabricate any chips. In addition, one wonders if the researchers are tempting fate by declaring they can successfully create an "unhackable" computer. In any event, DARPA by nature and design is a highly experimental agency that grants money on many ambitious projects that ultimately go nowhere. 

The short answer is that "nothing is unhackable," says Constellation VP and principal analyst Steve Wilson.

Moreover, "many of today's security problems are not in fact fundamental in nature, but they relate to runaway complexity, hasty development, poor product development management, especially in software," he adds. "So these problems do not go away with a radical new computing architecture. Most vulnerabilities are not in hardware per se but they are at the edges where overly complicated and unreliable software and firmware interfaces to hardware. The software is too complicated, it's written too quickly, it's cobbled together from third party modules that are not properly tested or even understood. We have mission critical products like medical devices running on commercial grade operating systems. They're so complex they cannot be tested."

Sometimes, even the most basic testing isn't done, Wilson adds, noting that here are medical devices out there with open wifi connectivity and no passwords. The point is that no mathematically perfect new hardware architecture—even if it was "unhackable—is going to make any difference until the whole industry comes to its senses, Wilson says. "We need to rethink software development and software-based products. Before the IoT runs amok. We need discipline, responsible sober development timelines, we need to reject re-usable general purpose commercial modules in mission critical applications. We need testing, testing, testing, code inspection, testing and more code inspection. And we need to stop objecting to the cost of all this, before a car runs out of control and kills people because the operating system had a bug in it."

As for MORPHEUS, Wilson wishes the researchers good luck. "This is important, like pure maths and quantum computing and gravitational wave detectors are important." However, "we must not let the security agenda be distracted by radical new R&D. We urgently need to rethink conventional security and the stack we're stuck with today."

Walmart continues on innovation path: The world's largest employer is finding more potential ways to fend off rival Amazon, with one of the latest reportedly being a skunkworks project centered around cashierless stores. While Walmart hasn't discussed the effort directly, Recode spoke with multiple sources who outlined what's in the making:

Amazon’s Go concept uses a combination of sensors and cameras to track what each store shopper takes off of shelves so it can automatically bill them for their purchase without their having to stop to pay on the way out. The store’s launch has been severely delayed, however, with reports that the technology did not work well when the store was crowded.

Walmart is envisioning a similar system that would potentially eliminate the need for cashiers in stores outfitted with the technology. Walmart has more than two million employees worldwide, many of whom work at checkout.

Dubbed Project Kepler, the effort said to be is headed up by Jet.com co-founder and former CTO Mike Hanrahan. Kepler is an apparent reference to the 17th-century German mathematician, astronomer and astrologer Johannes Kepler, known for developing the laws of planetary motion.

More details about Project Kepler are revealed in job postings for Store No. 8, Walmart's skunkworks unit centered on developing new shopping experiences. Listings include one for a computer vision engineer, several for core services and tooling engineers, and a product manager.

POV: It's not clear when Project Kepler's ideas will surface in Walmart's operations, whether in existing stores or as part of new ones. The fact that Amazon, with its vast technical know-how and resources, is having difficulty launching Go stores, may suggest it will be a while.

Digital Transformation Digest: Google Chrome Ad Block Plan Looms, China's Red-hot Xunlei Eyes US, EU Cloud Launch, Magic Leap Unveils AR Headset

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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Alan Lepofsky

Vice President & Principal Analyst
Constellation Research

Alan Lepofsky - VP and Principal Analyst, Constellation Research. With almost two decades of experience in the collaboration software industry, Lepofsky helps organizations improve the way their employees work together to get their jobs done. Lepofsky’s primary research area The Future of Work, focuses on: integrating collaboration and business processes (Purposeful Collaboration), structuring work via Social Task Management, leveraging analytics and digital assistants to work more productively, the strategic impact of mobile computing on business transformation, and measuring workforce culture based on Digital Proficiency instead of age. Twitter: @alanlepoLinkedIn: https://ca.linkedin.com/in/alanlepo     , Title: Big IdeasIntelligent Collaboration: The Intersection of…...

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Google's ad-blocking plan for Chrome gets a start date: Beginning on February 15, web ads that don't meet standards set by the industry group Coalition for Better Ads will be blocked inside Google's Chrome browser. The move has been long expected but Google didn't provide a start date until now.

Ads who don't meet the guidelines for more than 30 days will be removed. Website owners can ask for a review and reinstatement of the ads after they address violations, Google said.

Other members of the coalition include Facebook, Unilever and Proctor and Gamble. Ad types that don't pass muster include autoplaying video ads with audio, full-screen scrollover ads and positial ads with countdown clocks.

POV: The stakes for marketers and advertisers are high indeed, given that Chrome has 60 percent of the browser market. At the same time, Google gets almost 90 percent of its revenue through advertising; what it and other coalition members say they're after is a better overall ad experience that will slow the rise of ad-blocker browser extensions such as Ad-block Plus.

Many publishers have begun their own appeal to users, asking them to "whitelist" websites, allowing ads to be displayed, in exchange for viewing content. On one hand, this is a reasonable request for sites that depend on advertising revenue to exist, but on the other, advertisers shouldn't get to run roughshod over the user experience.

What happens starting February 15 will be keen to watch. Advertisers and publishers will have had the better part of a year to prepare for the guidelines, so laggards will argubaly have little room to complain. But Google's role as a chief enforcer of the new rules is pivotal and as of yet, untested.

China's red-hot Xunlei eyes cloud debut in US, EU: One of China's most talked-about tech companies says it intends to open up shop in the United States and Europe in the first half of next year. Xunlei plans to extend its OneCloud service to the major markets in a bid to compete with Amazon Web Services and other providers.

OneCloud has an unusual setup, to say the least. Acting much like a content delivery network, it depends on users who purchase a NAS (network-attached server) from Xunlei. In exchange for authorizing the use of any idle bandwidth and storage, customers can get rewarded with a cryptocurrency called OneCoin, which is mined over Xunlei's network.

In an interview with the Associated Press, Xunlei CEO Lei Chen elaborated on the company's plans:

The model of using customers' bandwidth "will bring us capacity to provide cloud computing at a very low cost, perhaps one-third of the cost of Amazon," Chen said.

He said Xunlei is developing technology aimed at increasing security by analyzing users' data without gathering it in a central location.

"We will use artificial intelligence to process users' own data to help us to service them better, but we don't want to know what artificial intelligence understands about our users," said Chen.

POV: Needless to say, there are some obvious questions to ask about Xunlei's plans. A big one is how US and EU ISPs will react to the notion of customers trading their bandwidth to a third party company, particularly in the wake of net neutrality being overturned, a move that removed key restrictions on how ISPs must treat Internet traffic.

Then there is the question of whether enterprises outside China would want to buy cloud computing capacity that is supported in this manner. A third question is how well OneCloud performs at enterprise scale. Yet another: Will Xunlei simply offer cloud storage and content delivery, or compute as well?

One thing is for sure, and that's that OneCloud is catching on in China. More than 18 million people have ordered the required devices. How many of them are doing so in order to chase down some OneCoin is another matter.

Magic Leap finally unveils its AR headset: The secretive augmented reality startup Magic Leap, which has raised a whopping $1.9 billion from investors—including $500 million from Google—since its 2011 launch, has at last revealed the initial version of its headset.

Magic Leap One will be released sometime next year along with an SDK (software development kit) aimed at what Magic Leap calls "creators." The product consists of a set of lightweight goggles connected by cable to a small, hockey puck-like computing module that can fit in a pocket or on a belt. Its computing power is said to be at the level of a well-equipped laptop computer, although the precise specs and the price haven't been disclosed just yet. (Magic Leap did give Rolling Stone an exclusive first look and hands-on test drive of the device; its report, which is well worth a read, can be found here.)

POV: Magic Leap One's initial draw may initially be with game developers and the like, but assuming it ships and succeeds—long delays with the product's unveiling have prompted a good deal of skepticism along these lines—eventually be pointed at enterprise scenarios.

"This is competition for Microsoft Hololens," says Constellation VP and principal analyst Alan Lepofsky. "They are approaching the design in different ways, with Hololens having all the computing power contained in the headset, where as Magic Leap’s processing power is attached to your belt. While the device is important, the key is content. Microsoft will obviously integrate well with Office apps and content, where as Magic Leap will probably be linked to the Google ecosystem."