Digital Transformation Digest: Assessing the Impact of Tesla Semi, Microsoft Launching Cassandra-as-a-Service, AWS Throws Support Behind Neural Net Interoperability

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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Doug Henschen

Former Vice President and Principal Analyst
Constellation Research

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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Tesla's Semi launch puts autonomous trucking in the spotlight: One thing Tesla founder Elon Musk is good at doing is garnering amazing amounts of attention for his company's product launches, even when they won't be reality for years. It was no different this week with the unveiling of Tesla Semi, an electric, semi-autonomous tractor trailer Tesla says will be in production by 2019.

That timeline gives Tesla more than two years from today to actually deliver the first Semi, and it's no stretch to wonder whether it will meet even that mark, given problems the company has had scaling up production on its passenger vehicle lines. But Tesla is far from the only player in electric-powered trucking, with Daimler Automotive Group and Volvo two other notable entries with prototypes well underway.

What Tesla's announcement delivered is the kind of focused blast of hype that will push electric and autonomous trucks further into the mainstream conversation. Here's a look at some of the key issues at hand.

• Finding their range: Volvo has said its initial electric trucks will have a base range of about 150 miles, with the potential for 300 miles through additional battery packs. Tesla claims the Semi will have a 500-mile range, a distance that puts electric trucks in the long-haul game by circumventing the lack of a pervasive national charging system. While the trend in trucking over recent years has been to atomize routes into more regional runs, longer-range electric trucks will no doubt find appeal in the market.
• Expect consolidation and partnerships: What Tesla brings in sizzle to the trucking industry, it lacks in certain key substances like well-established channel relationships with semi-truck buyers, which range from retailers like Walmart to thousands of trucking firms large and small. This week, Tesla grabbed headlines noting that Walmart and other firms have already placed preorders for the Semi, but in the long run—no pun intended—the electric truck market will probably be dominated by the incumbent players, with Tesla and others partnering or licensing their innovations. However, stay tuned for marketing efforts aimed at the many independent truck owner-operators out there, who hitch their rigs to trailers from many different customers.
• What do truckers think?: Trucking industry jobs remain in high demand and despite predictions of an autonomous trucking future, major changes will take decades to implement. In the meantime, hundreds of thousands of veteran truckers and ones just entering the workforce have to contemplate what the electric revolution could mean. Tesla's announcement of Semi drew quite a bit of attention this week from truckers on a popular industry forum.
  Some of it was skeptical and even mocking, with posters questioning the effect of large numbers of electric trucks on the nation's power grid, or how they would be designed to handle situations like long wait and idling times at major loading ports. But others argued that the introduction of electric truck alternatives should serve as a wakeup call to traditional truck makers who have slipped on quality and safety metrics. The voices on the ground are important to hear in any major call for change, and trucking is no different.

Microsoft launching Cassandra-as-a-service: In one of several notable database-related announcements this week, Microsoft is prepping support for Cassandra in CosmosDB, its globally distributed database service. It will allow developers to use CosmosDB with the Cassandra SDKs and tools they're already familiar with, Microsoft said.

POV: With CosmosDB, Microsoft has delivered a next-generation, globally scalable database offering consistency and other performance advantages over NoSQL databases, says Constellation VP and principal analyst Doug Henschen. It has also made this very new database accessible to developers by exposing it through familiar, open-source APIs, including those of MongoDB, DocumentDB, Gremlin Graph and Spark. "The Cassandra API adds yet another option, but one that's most consistent with the attributes of CosmosDB," Henschen adds. "Both Cassandra and CosmosDB excel in powering globally distributed applications, so the offering of a Cassandra-based cloud service on Azure running on CosmosDB is particularly attractive."

While CosmosDB is quite new, Microsoft executives insist that it's able to support all the features of the Cassandra API and will deliver performance that meets or, in the case of consistency, exceeds what's possible with a Cassandra database deployment. To that end, any company considering Cassandra as a managed service will surely put Microsoft's option on CosmosDB on its short list to try, Henschen says. "For now they'll be pioneers, as there’s not a long list of CosmosDB customers, and even fewer with experience using it with the Cassandra API. But with both CosmosDB and Google Spanner raising expectations for global database deployments without performance and consistency compromises, there will be plenty of tire kickers."

Amazon Web Services throws support behind neural network interoperability: A few months ago, Facebook, Microsoft and other notable tech companies formed the Open Neural Network Exchange, a project geared at fostering interoperability between deep learning technologies. Now Amazon Web Services has joined ONNX and is contributing ONNX-MXNet, a Python package that adds ONNX learning models to the deep learning framework Apache MXNet.

POV: Putting the acronym alphabet soup aside, what this means is a significant step forward for cooperation between rivals in an important area of AI research. Rather than forcing developers to re-implement deep learning models framework by framework, ONNX seeks to reduce or even eliminate that type of gruntwork, enabling the focus to be on innovation.

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

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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Doug Henschen

Former Vice President and Principal Analyst
Constellation Research

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.

Digital Transformation Digest: Google Unveils TensorFlow Lite, ADT Buys Datashield for Hybrid Cybersecurity, Microsoft Embraces MariaDB

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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Doug Henschen

Former Vice President and Principal Analyst
Constellation Research

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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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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Google introduces TensorFlow Lite: During its past two years as an open-source project, TensorFlow has emerged as one of the leading maching learning frameworks in the industry, drawing interest and investment from well beyond its creator and core contributor, Google. Now the TensorFlow team has released a Lite version of the framework aimed at mobile and embedded devices, in a move that will draw excitement but may also seem belated to some.

Here are some of the key details from the team's announcement:

TensorFlow has always run on many platforms, from racks of servers to tiny IoT devices, but as the adoption of machine learning models has grown exponentially over the last few years, so has the need to deploy them on mobile and embedded devices. TensorFlow Lite enables low-latency inference of on-device machine learning models. It is designed from scratch to be:

Lightweight Enables inference of on-device machine learning models with a small binary size and fast initialization/startup

Cross-platform A runtime designed to run on many different platforms, starting with Android and iOS

Fast Optimized for mobile devices, including dramatically improved model loading times, and supporting hardware acceleration

To the last point, TensorFlow Lite includes support for Android Neural Networks API, which works in conjunction with custom hardware accelerators that are found more increasingly on mobile devices these days. It also comes with support for some key machine learning models, including Inception v3 for image recognition; and Smart Reply for quick, automated responses to incoming chats.

TensorFlow Lite should be viewed as an "evolution" of the existing TensorFlow Mobile and will eventually supercede it through a much larger scope, according to the team.

POV: "In the battle of AI platforrms distribution is key," says Constellation VP and principal analyst Holger Mueller. "The more places algorithms can run, the more value there is for developers and enterprises. Google delivering on the TensorFlow Lite announcement gives developers broader reach for one of the popular neural networks and AI platforms, and it's an important move for TensorFlow.

That being said, the move is a fairly obvious one, particularly since Google is the company behind Android, notes Constellation VP and principal analyst Doug Henschen. "Since most of us are carrying supercomputers around with us in our pockets, we should be able to take advantage of machine learning and nueral nets," he says. "What's more, application developers will want these capabilities accessible to users no matter the platform. MXNet and Torch already run on Android and iOS, so it stands to reason that Google would want to extend the versatility of TensorFlow to be a first-class citizen on mobile devices."

ADT buys Datashield for hybrid cybersecurity: While ADT has long been known for its physical security systems—alarms and sensors for businesses and homes alike—in fact, the company has its own offerings for network security, and has partnered with security software providers for some time. Now ADT is taking the strategy a step further with the acquisition of Datashield, which makes a platform for managed threat detection and response. Terms of the deal were not disclosed.

POV: Datashield uses a combination of its software and assigned security experts who investigate and rectify validated threats. This is an advantage over simply sending customers a torrent of security alerts for their own teams to monitor and assess, according to the company. It competes with the likes of Dell SecureWorks.

As others have noted, Datashield presents ADT with ample cross-selling opportunities. Where the challenge lies is educating its customer base on the value proposition, as well as living up to the cost savings Datashield claims its dedicated security monitoring centers can deliver as an outsourcing play, compared to hiring more infosec staffers. ADT is rolling Datashield into a new division called ADT Cybersecurity, which could get some initial traction in a market wracked of late by some of the highest-profile and damaging data breaches ever.

Microsoft embraces MariaDB on Azure: After Oracle acquired Sun Microsystems in 2010, MySQL co-creator Monty Widenius responded to uncertainty over the database's future under Oracle's ownership by leading a fork of the codebase called MariaDB. While experiencing some fits and starts, MariaDB today has become a mature, widely used relational database. A point of validation to that end came this week, with Microsoft's announcement that it is joining the MariaDB Foundation, which oversees the platform's development.

MariaDB will also be offered as a fully managed service on Microsoft Azure, with a preview version coming in the near future. MariaDB will join MySQL and Postgres on Azure.

POV: Microsoft's move isn't as monumental as others it has made in the open-source realm, such as its initial support of MySQL and decision to join the Linux Foundation. Still, it provides more open-source credibility for Redmond while sticking a thumb in the eye of Oracle and its MySQL unit, notes Constellation VP and principal analyst Doug Henschen. Microsoft has taken pains to position Azure as a broadly open cloud platform focused on customer choice, and supporting MariaDB both as a service and on the foundation level falls squarely in line with that attitude. 

Digital Transformation Digest: Twitter Launches Premium APIs, Google Cloud Spanner Goes Global, Kubernetes Gains Cohesion

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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Twitter eyes more enterprise business with premium APIs: While Twitter has long provided APIs (application programming interfaces) for its data at no charge, it also offers enterprise-focused tools based on its acquisition of Gnip back in 2014.

But that two-item API menu has had a functional gap, one Twitter is trying to fill with new "premium" APIs. The free ones provide basic querying and data access, while the enterprise versions offer the full history of Twitter information along with more real-time access. Here's how Twitter describes the value proposition of its premium APIs:

The new premium APIs bring the reliability and stability of our enterprise APIs to our broader developer ecosystem for the first time. They include a clear upgrade path that scales access and price to fit your needs. We’ve built these new products to enable innovation — whether you’re just getting started and building a proof of concept, or are an established company experimenting with new products and ideas. 

Launching today in public beta, our first premium offering is the Search Tweets API, which provides access to the past 30 days of Twitter data. Soon, we’ll add an additional endpoint that will enable access to the full history of Twitter data, going all the way back to @jack’s first Tweet in 2006.

Premium APIs also deliver more tweets per request, greater query complexity and richer metadata. They're offered under monthly contracts, with access available in usage-based tiers. Pricing begins at $149 per month but scales up to $2,499 per month.

Twitter has already posted an API roadmap, which can be viewed here.

POV: The Twitter firehose remains a crucial data source for developers, both in the startup and enterprise realm, as well as CxOs. Twitter's failure to provide a middle-ground level of API access to its data until only now has been a sore spot. Developers have found themselves quickly running up against the free APIs limits, only to be unable or unwilling to invest in Twitter's enterprise-level tooling. With ad revenue struggling, Twitter needs new revenue; it's an open question as to whether premium APIs will generate it quickly, with the answer coming down to awareness, price point, perceived value, and the level of trust between Twitter and developers.

Google's Cloud Spanner goes global: This year, Google introduced Cloud Spanner, the distributed database platform that underpins services like AdWords. While generally available, Cloud Spanner was limited to regional deployments. That's not the case any longer, as Google has rolled out multi-region configurations of the database:

With this release, we’ve extended Cloud Spanner’s transactions and synchronous replication across regions and continents. That means no matter where your users may be, apps backed by Cloud Spanner can read and write up-to-date (strongly consistent) data globally and do so with minimal latency for end users.

Additionally, when running a Multi-Region instance, your database is able to survive a regional failure. This release also delivers an industry-leading 99.999% availability SLA with no planned downtime. That’s 10x less downtime (< 5min / year) than database services with four nines of availability.

POV: While Cloud Spanner's capabilities are impressive, one has to wonder where its relevance is save for very large enterprises running highly complex workloads. To that end, Cloud Spanner may be battle-tested within Google but remains a new product in the commercial sense.

So far, Google's named references for Spanner include SaaS vendors such as Marketo. The marketing automation provider had actually moved its underlying database platform to a non-relational store some time back in order to gain needed scalability, but ran into problems over time since its products are so aligned with transactional data. Cloud Spanner is providing traditional relational characteristics along with the scale Marketo needs for its services, a spokesman said. Other references include Evernote, which is converting 750 MySQL instances into a single Cloud Spanner instance, according to a statement.

Cloud Native Computing Foundation provides Kubernetes coherence: The influential industry group Cloud Native Computing Foundation has announced a certification and interoperability program for Kubernetes, the increasingly popular open source project for software container orchestration.

Some 32 certified Kubernetes distributions and platforms are availble under the program, which uses a testing suite to validate submissions for conformity with standards. They include offerings from Alibaba, Canonical, Apprenda, Cisco, Cloud Foundry, Docker, Google, IBM, Microsoft, Oracle, Red Hat and SAP, among many others.

POV: Kubernetes originated at Google and over the past three years has become one of the fastest-growing open source projects ever. Containers underpin the next generation of cloud architectures, so some level of cohesion among industry players is to be expected, but the level of cooperation evidenced by the certification program's success is nonetheless remarkable.

Moreover, the sheer amount of critical mass it provides around a single, interoperable version of Kubernetes makes the prospect of a fork almost unthinkable. This is one case where enterprises will benefit from the shared interests of many vendors, who will have to compete based on the quality of services and value-added features.

HPE, Rackspace to Debut Pay-As-You-Go Private Cloud

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.&nbsp; Insights&nbsp;delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to&nbsp;Constellation Executive Network&nbsp;members.&nbsp; Prior to joining Constellation,&nbsp;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:&nbsp;@chriskanaracus , Title:&nbsp;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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Hewlett-Packard Enterprise and Rackspace are teaming up on a new offering that will combine the OpenStack IaaS fabric with HPE servers run at a data center of a customer's choosing, with metered pricing. The companies claim customers can save at least 40 percent compared to using the "leading public cloud," also known as Amazon Web Services. Here's how HPE and Rackspace describe the value proposition:

Leveraging HPE Flexible Capacity, customers pay for what they use in an on-demand consumption model for infrastructure. This feature enables private cloud customers to more closely align resources to growth and handle burst capacity and traffic spikes without the need to pay for additional fixed capacity.

Enable enterprise-grade security and reliability: With a single-tenant model, customers can eliminate the performance and “noisy neighbor” issues commonly found in multi-tenant environments, and can more easily meet security, compliance and data sovereignty needs.

Rackspace will provide managed services for the systems, with a 99.99 percent uptime guarantee. The company terms itself the world's most seasoned OpenStack operation, with greater than a billion "server hours of OpenStack expertise."

The systems are set for general availability on November 28. Rackspace plans to offer similar managed private clouds based on VMWare and Microsoft Azure Stack next year.

Analysis: A sensible partnership, but will customers follow?

On paper, the deal makes good sense for both HPE and Rackspace. The former gave up its public cloud ambitions entirely, ceding the market to AWS and others, but still has massive amounts of server and networking kit to sell. HPE also has useful software assets for private cloud management, with the acquisition this year of Cloud Cruiser. It had already been the largest customer of Cloud Cruiser's technology for monitoring and measuring IT infrastructure usage and spending, rebadging it as HPE Flexible Capacity.

Meanwhile, Rackspace has steadily moved away from its roots as a hosting provider and into specialized managed services, particularly for OpenStack, which it co-created with NASA in 2010. Today, OpenStack is a highly successful project managed by the OpenStack Foundation, with more than 500 participating companies. That means Rackspace can't claim to be the only player with the right OpenStack chops, but its experience with the technology obviously puts it in the lead.

Where HPE and Rackspace's announcement should prompt cause for skepticism comes in the cost saving claims. Rackspace's website says its estimates are based on an "internal pricing analysis," the methodology of which hasn't been made public. Prospective buyers of the new private cloud service would do well to hold Rackspace's feet to the fire on its pricing claims.

However, even if the savings don't quite measure up to those lofty heights, the large enterprises HPE and Rackspace are targeting may find the service's key differentiator lies in its single-tenant model. although AWS and other public cloud providers may have a quibble with HPE and Rackspace's invocation of "noisy neighbor" problems on their services. The term refers to cases where on a multitenant cloud service, a particular application begins to hog bandwidth and other shared resources, causing performance issues for other tenants. This problem can be avoided through bare-metal deployment options, which have been available for years but do incur fractionally higher costs.

Overall, HPE and Rackspace's announcement came without much ceremony, but the service's success will certainly be one to watch closely in the coming months.

Digital Transformation Digest: IBM's Latest Quantum Computing Push, OpenStack Foundation Looks Beyond, Department Chains Still Wrestling with Online Shift

Chris Kanaracus

Managing Editor, Constellation Insights
Constellation

Chris Kanaracus is managing editor of Constellation Insights.&nbsp; Insights&nbsp;delivers exclusive, daily analysis of breaking news across Constellation’s eight business research themes to&nbsp;Constellation Executive Network&nbsp;members.&nbsp; Prior to joining Constellation,&nbsp;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:&nbsp;@chriskanaracus , Title:&nbsp;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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IBM pushes quantum computing envelope: Big Blue has fired the latest salvo in the competitive war between itself and the likes of Google and Microsoft over quantum computing, announcing it has created a working prototype of a 50 quibit processor.

Cassically-designed computers are binary in structure, storing bits as either a one or a zero. But quantum systems take advantage of the behavior of subatomic particles, which can hold multiple states. This phenomena, which is known as superposition, stands to give quantum systems vast amounts of processing power as they are developed and reach viability at scale. Qubits are the quantum counterpart of traditional bits.

The near term goal among IBM and its rivals is achieving "quantum supremacy," wherein a quantum computer can finish a task faster than any conventional computer. Google has characterized 50 qubits as the bar for quantum supremacy.

POV: While the 50 qubit system remains a lab creation, IBM will provide cloud-based access to Q quantum computers with 20 qubits of power by the end of this year. Early quantum computers such as these remain highly unstable. IBM says its initial Q systems will have a "coherence" rating—the time available to run quantum computations—of 90 microseconds, although IBM characterizes this result as leading the field.

While IBM and others have signaled that commercial quantum computing systems are on the horizon, for now IBM's goal is to create a critical mass of research and academic interest around its activities. Some 60,000 users have conducted nearly 2 million experiments on IBM"s cloud-based quantum computing service, representing nearly two thousand universities, high schools and other institutions, according to a statement.

Desktop Metal hatches heavy 3-D printing plans: A Boston-area startup that has raised more than $200 million for its metal 3-D printing systems is now taking international pre-orders for its Studio System prototyping machine. BMW Group will be the first international company to get one of the systems, according to Desktop Metal's announcement. Interest among U.S. companies for Studio Systems has been strong as well.

But the real—albeit yet unproven—breakthrough for Desktop Metal is set to come in mid-2018, with the release of the Production version of its system. The systems, which use an inkjet printer's approach to creating complex metal parts, will be 100 times faster and 20 times cheaper than laser-based 3-D metal printing systems, according to the company. Desktop Metal Production is geared toward manufacturing at scale, with advantages that other methods can't match.

The systems' sweet spots are smaller batches of complicated parts, that can be designed and printed through software, with no special casts or tooling required. Moreover, the parts can be made in non-factory settings, reducing overhead. Another advantage, as noted in the Register: Since the parts would be software-driven, the files could be sent electronically to local machines, which on paper would avoid import tariffs associated with bringing goods across borders.

POV: Desktop Metal's inkjet-style approach is not unique, nor its its use of metal in the printing process. Still, the startup has attracted investments from the likes of Google and BMW, and is said to have a rich patent portfolio backing up its commercial ambitions. The challenge now is to deliver Production systems that live up to the speed and cost Desktop Metal is touting.

Macy's places new bets on tech for turnaround: Department store chain Macy's reported third-quarter results this week that saw profits beat estimates but revenue fall 6.1 percent to $5.28 billion. Those numbers reflect continued difficulty in the brick-and-mortar side of the business, but also more success in shifting sales online. Macy's recently brought on a new president, Hal Lawton, who has experience at eBay and Home Depot.

Lawton's unique background and experience working with technology is something Macy's is banking on big-time as it plots a defensive and offense strategy against not only rivals such as Kohl's but especially Amazon, which has made a series of strategic moves, such as the acquisition of Whole Foods Market, to build out its brick-and-mortar presence.

Macy's has experienced 33 quarters of double-digit growth in online sales, but still has work to do on some fundamentals, CEO Jeff Gennette said during a conference call:

So some of the things that we're focused on with respect to technology, is really making sure that our ongoing site optimization is just really strong, and we learn every day. We do a good job here, but we have lots of opportunities to improve on this. We're looking at mobile and tablet app responsiveness and making sure that we get the conversion rates there where we want them.

One challenge retailers like Macy's face from Amazon is the latter's sheer scope of inventory and product availability. Macy's is looking to expand its direct-ship-from-vendor operations as a way to combat that, Gennette said. In addition, Macy's plans to leverage machine learning for personalized shopping experiences, he said. The latter is hardly a pace-setting move, so it remains to be seen how well Macy's executes.

Macy's is also hoping to lure new customers, particuarly so-called Generation Z members, to the fold. Gennette gave a broad outline of the chain's plans here:

And then lastly, to the previous question about on-boarding of new customers and the idea about the Gen Z customer and using user-generated content, being in the social space, using our teams in a more relevant way to market in a more authentic way is all part of what's on our kind of technology playbook.

POV: Macy's recently overhauled its customer loyalty program, and while officials reported that initial feedback has been positive, statistical results weren't made available. Overall, the U.S. brick-and-mortar retail sector remains a boxer in late rounds, leaning on the ropes, with forecasts for 2018 not looking especially positive. Macy's is one chain talking a good game about innovation and transformation; as the busy holiday shopping season gets underway, the contest is already in crunch time.