Digital Transformation Digest: Net Neutrality Vote Due In Weeks, Walmart's Bang-Up E-Commerce Moves, Microsoft and Databricks Team for Spark on Azure
Digital Transformation Digest: Net Neutrality Vote Due In Weeks, Walmart's Bang-Up E-Commerce Moves, Microsoft and Databricks Team for Spark on Azure
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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Doug Henschen is former Vice President and Principal Analyst where he focused on data-driven decision making. Henschen’s Data-to-Decisions research examines how organizations employ data analysis to reimagine their business models and gain a deeper understanding of their customers. Henschen's research acknowledges the fact that innovative applications of data analysis requires a multi-disciplinary approach starting with information and orchestration technologies, continuing through business intelligence, data-visualization, and analytics, and moving into NoSQL and big-data analysis, third-party data enrichment, and decision-management technologies. Insight-driven business models are of interest to the entire C-suite, but most particularly chief executive officers, chief digital officers,…...
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Net neutrality vote looms for December: It could be a matter of a few weeks before the U.S. rules governing Internet traffic undergo a major overhaul. Federal Communications Commission Chairman Ajit Pai is set to unveil a final, formal proposal to overturn so-called net neutrality regulations passed under the Obama administration, according to a number of published reports. A vote by the Republican-majority FCC board would be taken at its scheduled meeting in mid-December.
Net neutrality bars ISPs from blocking or slowing Internet traffic associated with legal content. It also prohibits them from favoring traffic based on special payments or other considerations. But Pai says the rules, passed in 2015, wrongly classified ISPs as "common carriers" under Title II of the Communications Act. The classification allowed for net neutrality's protective measures but on balance is an anti-competitive overreach, critics argue.
POV: The net neutrality debate stems from a much earlier time than 2015. In fact, its general contours have been in play for the better part of two decades. That makes the potential for the rules being overturned that much more significant. Net neutrality has long been framed as a consumer protection issue, and that it remains. Other key supporters are Internet companies such as Google and Facebook, which is only natural.
However, today and going forward, Internet traffic is of increasing concern to enterprises of all kinds, and of all sizes, as they seek to create new digital business models, sell and market more effectively, and serve customers who live online more and more. While partisan decisions can be fleeting in Washington—a rules change in December could last only a few years, if current president Donald Trump is not reelected or leaves office under other circumstances—the upcoming FCC meeting is nonetheless extremely important.
Walmart results, online sales boom: The world's largest company continues to drive major gains in online sales, with U.S. e-commerce revenue up 50 percent in the third quarter, Walmart officials said this week.
Importantly, Walmart's pivot to ecommerce is having a holistic effect on the brick-and-mortar business, which still accounts for the vast majority of revenue, and vice versa. CEO Doug McMillon explained the effect this way on a prerecorded conference call:
Our associates are using technology and apps for inventory management and price changes that help make their jobs easier and increase productivity in the stores. Store leverage is helping to allow our strategic investments in eCommerce to continue. It’s also exciting to see how we’re removing friction from the customer experience with express pharmacy, an easier money services process and by expanding pickup options with our automated towers and online grocery. We now have online grocery in more than 1,100 stores and look forward to expanding this popular offering to another 1,000 locations next year.
POV: While its e-commerce strategy may have taken some time to gel, nobody can accuse Walmart of moving slowly now, and some of its recent moves hold lessons for all retailers.
For one, Walmart has recognized that e-commerce demands almost limitless choice. To that end, it has tripled the number of unique SKUs on Walmart.com in one year, to 70 million. A significant piece of that growth is from third-party sellers, but beyond sheer scale, Walmart has taken brand cachet into account, inking deals with the likes of Bose, KitchenAid and Lord and Taylor.
Walmart has also taken steps to preserve the identity of Jet.com, the online retailer it acquired in late 2016 for $3.3 billion. Jet.com built up a reputation quickly with more affluent urban shoppers and milennials, with natural crossover between those two categories. So far, Jet is running business-as-usual under Walmart ownership while continuing to build out its identity with house brands like Uniquely J. Walmart's investment in Jet.com was about horizontal expansion in its customer profile base, not just top-line revenue.
The quarter all eyes are on is the current one, of course, given it holds the busy holiday shopping season. Beyond revenue and profit expectations, the spotlight will be on how well Walmart executes on the customer experience, both in-store and e-commerce.
Microsoft makes Databricks a first-party Azure service: One of Microsoft's key selling points for Azure is its open nature, with support for many third-party technologies. But its new partnership with Databricks is on another level entirely. Here are the key details from an official Microsoft blog post:
Once you manage data at scale in the cloud, you open up massive possibilities for predictive analytics, AI, and real-time applications. Over the past five years, the platform of choice for building these applications has been Apache Spark ... However, managing and deploying Spark at scale has remained challenging, especially for enterprise use cases with large numbers of users and strong security requirements.
Enter Databricks. Founded by the team that started the Spark project in 2013, Databricks provides an end-to-end, managed Apache Spark platform optimized for the cloud. Featuring one-click deployment, autoscaling, and an optimized Databricks Runtime that can improve the performance of Spark jobs in the cloud by 10-100x, Databricks makes it simple and cost-efficient to run large-scale Spark workloads.
Microsoft and Databricks are integrating the latter's platform with Azure on a deep level, including with special connectors to Azure's storage services for faster performance. Add in other Azure-related benefits for caching, query optimization, auto-scaling and other factors and the result is a superior offering for data scientists and engineers, Microsoft says.
POV: Databricks has more than 700 customers on its current platform, which runs on AWS, but Ali Ghodsi, cofounder and chief executive officer, told Constellation VP and principal analyst Doug Henschen that the company has heard lots of requests for an option on Microsoft Azure. Azure Databricks will deliver all the capabilities of the current Databricks platform, but it will be sold and serviced by Microsoft, so it will be a first-class citizen on Azure, with integrations with Active Directory, Blob Storage, Azure SQL, PowerBI, CosmosDB, Stream Analytics and more. For now it's a preview release and the companies are not projecting release dates, but expect general availability by Q1 or early Q2 2018, Henschen says.
"Companies could probably build many big data and analytics capabilities comparable to what you can do in Databricks using combinations of multiple Azure services, but Azure Databricks brings to Microsoft's cloud a well-thought-out, comprehensive and collaborative environment that spans the capabilities of data lakes, data warehouses and streaming systems together with advanced analytical capabilities including machine learning," Henschen says. "This move bolsters Microsoft's credibility as a source of open-source tools and platforms. At the same time it’s a big win for Databricks in terms of exposure to enterprise customers and a whole new base of customers that prefer Azure to AWS."
There is much more detail about the partnership and planned features in Microsoft's full blog post. On balance, they validate the notion that Azure Databricks has serious skin in the game from Microsoft's end; it's far from a case of Redmond certifying a third-party technology for Azure and handing over the proverbial keys in exchange for a cut of revenue. For CIOs, enterprise architects and data science organizations with existing or contemplated investments in Spark, there are good reasons to pay attention to Azure Databricks at a minimum, and become an early adopter program participant as a further step.
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