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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Andy Mulholland

Vice President and Principal Analyst, Constellation Research Constellation Research

Andy Mulholland is Vice President and Principal Analyst focusing on cloud business models. Formerly the Global Chief Technology Officer for the Capgemini Group from 2001 to 2011, Mulholland successfully led the organization through a period of mass disruption. Mulholland brings this experience to Constellation’s clients seeking to understand how Digital Business models will be built and deployed in conjunction with existing IT systems. Coverage Areas Consumerization of IT & The New C-Suite: BYOD, Internet of Things, IoT, technology and business use Previous experience: Mulholland co authored four major books that chronicled the change and its impact on Enterprises starting in 2006 with the well-recognised book ‘Mashup Corporations’ with Chris Thomas of Intel. This was followed in…...

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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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R "Ray" Wang

Principal Analyst and Founder Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation…...

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Google introduces AR Core, its new augmented reality tech for Android: It's not often that Google finds itself playing catchup to rivals, but in the case of augmented reality, it has. Now the company has taken its AR play a significant step forward with the preview release of ARCore, a new software development kit that can be used to create augmented reality experiences on both existing and future Android phones. 

ARCore builds on Tango, an AR tech that Google had been working on for a few years. It had rolled out a phone and tablet built to work with Tango, and in 2016 Lenovo released a Tango-compatible phone. The big difference with ARCore is that it doesn't require any additional hardware, Google said in a blog post:

ARCore will run on millions of devices, starting today with the Pixel and Samsung’s S8, running 7.0 Nougat and above. We’re targeting 100 million devices at the end of the preview. We’re working with manufacturers like Samsung, Huawei, LG, ASUS and others to make this possible with a consistent bar for quality and high performance.

POV: It's not clear how long the ARCore preview period will last, but developers can get their hands on the code now. Meanwhile, Apple's iOS11 is now in beta (and expected to be generally available in conjunction with the iPhone 8 launch in a few weeks) comes with an augmented reality SDK called ARKit and there are already developers showing off new applications.

"Google at least got something out the door for Android," says Constellation founder and CEO R "Ray" Wang. "Now, to be fair, Apple had a head start, as it acquired Metaio, one of the industry leaders in AR, about three years ago," he adds. "In conversations with Apple a few weeks back, we can say that the apps on ARKit are pretty advanced."

Coding school startup lays off 11 percent of staff: A Denver startup called Galvanize, which has raised more than $60 million in venture capital for its coding schools, has laid off 11 percent of its staff as it seeks to retrench and focus more on online training programs, Reuters reports:

The layoffs come a month after two other so-called “coding boot camps,” Dev Bootcamp in San Francisco and Iron Yard of Greenville, South Carolina, announced plans to shut down by the end of 2017. In the past year, eight coding schools have closed, up from years past, according to review website Course Report. Currently there are 95 coding schools in the United States.

Course Report, which tracks the coding bootcamp industry, says the market will grow 52 percent this year, generating $266 million across 95 bootcamps in all. Nearly 23,000 students will graduate from bootcamps this year, up from about 15,000 last year.

POV: Bootcamps by nature are for-profit businesses unaffiliated with an accredited college or university. They're often positioned as a way for early or mid-career professionals to get a quick jumpstart into the coding game. The rapid growth of bootcamps in the past several years has the whiff of a gold rush about it; the closings of Dev Bootcamp and several others, along with the woes of well-established players such as Galvanize, suggests the market is seeing a correction due to saturation and quality control.

"Building learning software is a risky business," says Constellation VP and principal analyst Holger Mueller. "It's a big budget and time investment that often gets overtaken by market dynamics and reality. It looks like that's what happened here. But the opportunity and need to develop more coders remains, so more competition, innovative thinking and alternate training approaches are all welcome."

BASF advances its digital transformation with SAP: German industrial giant BASF is working with SAP on a project aimed at forging closer operational ties with BASF's business partners. Here are the details from the companies' joint release:

SAP Asset Intelligence Network, a cloud-based collaborative network, will provide BASF with a digital data connection to multiple original equipment manufacturers (OEMs) and service providers and their respective asset data. The project's goal is to establish a fully integrated and centrally managed asset information repository, helping ensure data consistency and availability.

By establishing such a single source of truth for asset information, BASF aims to further improve the efficiency of its engineering and maintenance processes throughout the asset lifecycle.

POV: The deal builds on SAP's existing relationship with BASF, which along with its close ties to Siemens gives it an even more prominent role in German and European industry.

But the broader point lies with BASF's goals for the project, says Constellation Research VP and principal analyst Andy Mulholland. " They want to develop a digital business ecosystem to support event-driven interactions around common data and business structures," he says. "That's a big issue and a strong move in the European digital business community."

(Go here for Mulholland's deep dive into how industrial technology and IT technology vendors are aligning and in some cases competing for stakes in the industrial IoT market.)

 

Future of Work Next-Generation Customer Experience Tech Optimization Chief People Officer Chief Information Officer Chief Supply Chain Officer Chief Digital Officer

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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R "Ray" Wang

Principal Analyst and Founder Constellation Research

R “Ray” Wang is the CEO of Silicon Valley-based Constellation Research Inc. He co-hosts DisrupTV, a weekly enterprise tech and leadership webcast that averages 50,000 views per episode and blogs at www.raywang.org. His ground-breaking best-selling book on digital transformation, Disrupting Digital Business, was published by Harvard Business Review Press in 2015. Ray's new book about Digital Giants and the future of business, titled, Everybody Wants to Rule The World was released in July 2021. Wang is well-quoted and frequently interviewed by media outlets such as the Wall Street Journal, Fox Business, CNBC, Yahoo Finance, Cheddar, and Bloomberg. Short Bio R “Ray” Wang (pronounced WAHNG) is the Founder, Chairman, and Principal Analyst of Silicon Valley-based Constellation…...

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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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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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Accenture and Apple's new enterprise mobility venture: Apple is making a new push into enterprise computing through a partnership with Accenture around iOS development. The deal is a true co-innovation effort and not something driven mostly by Accenture, as the companies' joint press release indicates:

Accenture will create a dedicated iOS practice within Accenture Digital Studios in select locations around the world. Experts from Apple will be co-located with this team. Working together, the two companies will launch a new set of tools and services that help enterprise clients transform how they engage with customers using iPhone and iPad. The experts will include visual and experience designers, programmers, data architects and scientists, and hardware and software designers.

“Starting 10 years ago with iPhone, and then with iPad, Apple has been transforming how work gets done, yet we believe that businesses have only just begun to scratch the surface of what they can do with our products,” said Tim Cook, Apple’s CEO. “Both Apple and Accenture are leaders in building incredible user experiences and together we can continue to truly modernize how businesses work through amazing solutions that take advantage of the incredible capabilities of Apple’s technologies.”

The release emphasizes three areas of focus for the partnership: back-end integration with iOS devices, tools and templates for IoT, and converting legacy applications to iOS.

POV: The deal is a smart move by both companies as it helps Apple drive further into the enterprise while Accenture can take advantage of the iOS skills shortage, says Constellation founder and CEO R "Ray" Wang. 

"The big areas are more than IoT," he adds. "Apple's augmented reality and virtual reality capabilities, and the new integrations with other devices such as HomeKit and Healthkit are where the future innovations lie ahead."

Apple's goal in lining up enterprise players like Accenture is to get more iOS devices sold into enterprises, notes Constellation VP and principal analyst Holger Mueller. "I am sure more SIs are in the wings," he adds. "But that cannot distract from the fact that the march to the enterprise for Apple is slow. Consumerization of IT via devices is one thing, getting enterprises to build on a platform is another."

VMWare, Google and Pivotal team up on container service: While software vendors involved with open-source software seek to find ways to offer commercial services around a given project, cooperation with other providers is crucial to the project's growth and customer success. That truism underlines this week's announcement from VMWare, Pivotal and Google around Pivotal Container Service (PKS), which will provide the Kubernetes software container orchestration platform on both VMWare vSphere and Google Cloud Platform.

The service is a commercial version of the open source Kubo project, which was founded by Pivotal and Google in November to bring Pivotal Cloud Foundry together with the increasingly popular Kubernetes. VMWare says it is committing significant engineering resources to the Kubo project in conjunction with the new container service's launch.

PKS will have ongoing compatibility with Google Container Engine, which is kept up to date with the latest Kubernetes releases (which to date have been rolling out every few months). VMWare plans to deeply integrate PKS with its other products, including vCloud Director, vRealize Automation and Wavefront for container monitoring. The initial release of PKS is expected in the fourth quarter. Pricing won't be available until then.

VMWare and Pivotal will be in charge of to go-to-market, aiming PKS at Global 2000 companies as well as service providers.

POV: The move looks like a good one, albeit far from surprising. While VMWare has selected Google rival Amazon Web Services as its preferred IaaS provider, Google cloud chief Diane Greene is a VMWare co-founder and former CEO, and partnering with her alma mater is an extension of her plan to push GCP deeper into enterprises. Google also remains a key player in the Kubernetes project, which it founded, despite having donated the code to the Cloud Native Computing Foundation. For VMWare, the deal reflects another step in its hybrid cloud strategy—something it needs to develop wisely as its large installed base of on-premises customers gets more comfortable with the cloud.

"It's good to see these three vendors working together to help customers," says Constellation Research VP and principal analyst Holger Mueller. "And it's another win in a long series of wins for Kubernetes to become the de facto container management standard at the moment."

Facebook awarded patent for gesture control system: While Facebook applies for more than 1,000 patents each year, it can take quite a while for a patent to be awarded This month, Facebook was awarded one it filed in 2012 for an in-air, gesture-based control system. Here are some of the key details of the invention, which is solely credited to Facebook's Robert Wang, who works on the company's Oculus VR team:

Because the system does not require instrumentation or gloves, it works well in a typical desktop computing environment. The user can switch between typing or using the mouse to gesturing by simply lifting up his or her hands, without having to put on a special glove or tracking device. Several configurations of the invention fit on top of a normal desk. The robust recognition of the pinching gesture enables the user to make comfortable input motions, reducing fatigue.

Other 3D manipulation applications include training applications for aircraft maintenance where the student virtually manipulates 3D tools to train muscle memory, design of 3D protein structures to match x-ray crystallography data for medical research, gaming applications where the user controls a virtual avatar or virtual hands, computer animation tasks where the user controls the configuration and timing of a virtual actor, and 3D sculpting for free-form modeling.

The hand tracking system described above can be used in conjunction with a variety of display systems including plasma, LCD, stereoscopic, and video wall displays. Processing can be performed either on the computer system connected to the display or on a remote networked computer system to which the camera image data is sent.

POV: You can read the patent in full at this link. A H/T goes to Patently Apple for initially spotting it. Facebook is far from the only company working on this type of technology—from startups such as Myo and Leapmotion to big players like Apple—but it's nonetheless of interest, particularly with respect to the implications it could have on application user experience.

"I believe human-to-machine interfaces will be a key component to helping us get work done more efficiently," says Constellation VP and principal analyst Alan Lepofsky. "We're quite limited by the keyboards and screens we use today. Facial recognition, eye tracing, sentiment analysis, hand motions and even things like heart rate and repository patterns will play a role in the future.

Rushed go-live blamed for rampant social service system woes: A new lawsuit alleges that potentially hundreds of Washington, D.C. residents who applied for food stamps had their benefits cancelled or delayed for months due to problems with a new computer system that federal officials warned wasn't ready for launch.

Families are going hungry as a result, says the lawsuit filed by the Legal Aid Society of the District of Columbia and the National Center for Law and Economic Justice, the Washington Post reports:

The trouble began last year, advocates for the poor say, when the city transitioned to a new computer system despite warnings of potential problems from the federal government, which pays for the program.

Before the rollout, U.S. Department of Agriculture officials recommended more testing to avoid backlogs and delays, and told the city that proceeding was “against our best advice” and that the city was moving ahead “at its own risk,” court records show.

Once the system went live, many errors were reported and it took 90 minutes to process an application, compared to 20 minutes with the old system. The added overhead has been exacerbated by the fact that the D.C. program serves 120,000 people, and lines outside agencies to apply start forming as early as 5 a.m., the Post reports.

POV: It's not clear when the matter will be resolved, but in the meantime it holds an important cautionary tale for any enterprise IT shop about the importance of testing and the need to set realistic project timelines. The manner in which testing is done is crucial as well. According to a letter from federal officials to the District of Columbia Department of Human Services, the new system was never tested with a live production pilot. Rather, the old system remained the system of record, while the new one was tested in parallel. The District's methodology was insufficient, federal officials said. 

Future of Work Next-Generation Customer Experience Tech Optimization Chief Customer Officer Chief People Officer Chief Information Officer Chief Digital Officer

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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VMWare launches on Amazon Web Services: After shuttering its own public cloud plans, VMWare inked a deal last year with AWS to implement its software-defined data center computing fabric on the cloud giant's server farms. Now the first delivery of that plan has arrived:

VMware Cloud on AWS is powered by VMware Cloud Foundation, the unified SDDC platform that integrates vSphere, VMware VSAN, and VMware NSX® virtualization technologies with VMware vCenter management. This means customers can use familiar VMware tools to manage their applications, without having to purchase any new or custom hardware, rewrite applications, or modify their operating model. With VMware Cloud on AWS, customers can leverage AWS's breadth of services, including compute, databases, analytics, Internet of Things (IoT), security, mobile, deployment, application services, and more.

VMWare made the announcement at its VMWorld conference in Las Vegas. Initially, the new service will be available in AWS's US West region with more to follow during 2018, according to a statement. Early customers include Cerner, MIT, Sysco and Moody.

POV: Along with full global availability, VMWare is still working out its pricing model for the service, which means many initial deals will be on the smaller side until enterprises get a better sense of both its robustness and how term pricing could benefit. Right now, it's priced hourly according to active usage, with one and three-year subscription options coming later. Customers would realize significant savings over on-demand pricing, with up to a 50 percent discount for a three-year deal, according to VMWare's pricing page. VMWare also wants to incentivize existing on-premises customers, as it will offer discounts to those with on-premises vSphere, NSX or vSAN licenses.

What enterprises should watch for now are the experiences of early adopters, says Constellation VP and principal analyst Holger Mueller. "If this fully works, CIOs have no excuse in regard to moving VMWare loads to the cloud," he says. "But let's see if this works." After all, he notes, customers weren't eager to adopt VMWare's failed attempt at public cloud, vCloud Air.

Oracle hiring up for the cloud: When it comes to accelerating cloud revenue growth, the best answer is attracting the right talent, and lots of it. That's what Oracle believes, in any case. The company said this week it will hire more than 5,000 engineers, consultants, sales and support personnel into its cloud business.

Under the direction of CEO Mark Hurd, Oracle had already been hiring and training new college graduates as cloud salespeople. That will continue, but the hiring push is also targeting experiences sales staff and engineers, Oracle EVP Joyce Westerdahl said in a statement.

POV: Cloud revenue shot up 58 percent to $1.4 billion in Oracle's most recent quarter. That represented 13 percent of Oracle's overall revenue. In contrast, new on-premises license sales were down 5 percent to $2.6 billion, but maintenance revenue actually rose 2 percent to $4.9 billion—46 percent of overall revenue.

In short, while Oracle is keen on growing cloud sales, on-premises licenses and maintenance remain lucrative and substantial businesses. Oracle has crafted its new-hire training program carefully, with seasoned account executives skilled at negotiating complex, multimillion-dollar on-premises deals essentially mentoring green salespeople while sharing in their success.

Constellation believes, however, that the best sales tool is the ability to point to successful customers. With Oracle's massive OpenWorld conference coming up in about a month, it will present an opportunity for the company to do just that.

Panelists resign from Trump's cybersecurity council: Eight members of the U.S. National Infrasructure Advisory Council have resigned, saying that recent actions by President Donald Trump have threatened the nation's cybersecurity. In a group letter obtained by Nextgov, the departing panelists explained their rationale:

Your actions have threatened the security of the homeland I took an oath to protect. These actions include your remarks given at a press conference on infrastructure reform on August 15,2017. When asked about the horrific violence in Charlottesville, you failed to denounce the intolerance and violence of hate groups, instead offering false equivalences and attacking the motives of the CEOs who had resigned from their advisory roles in protest. You have given insufficient attention to the growing threats to the cybersecurity of the critical systems upon which all Americans depend.

POV: The departures represent more than 25 percent of the panel's membership, but are to some degree partisan in nature. At least three Obama-era officials are among the ones leaving. Trump has also taken recent steps to highlight cybersecurity as a priority, elevating the Pentagon's Cyber Command to a more prominent organizational status. Still, with cybersecurity being a more important topic by the day, any sort of political turmoil is counterproductive to the mission. Here's to hoping the panel can be restaffed quickly with a bipartisan mix of officials capable of working well together. 

 

 

 

Digital Safety, Privacy & Cybersecurity Marketing Transformation Next-Generation Customer Experience Tech Optimization Chief Information Officer Chief Digital Officer Chief Revenue Officer

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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Amazon-Whole Foods integration plans revealed: One of the highest-profile retail and e-commerce-related acquisitions in years, Amazon's $13.7 billion purchase of Whole Foods Market, is set to close on Monday. In advance of that date, the companies have released some details of their integration plans.

Much attention has been paid to discounts that will be immediately applied to some best-selling Whole Foods grocery items, such as salmon, eggs, bananas and ground beef. This is an effort to shed Whole Foods' longtime, disparaging nickname, "Whole Paycheck." These price cuts and future ones will be enabled by the technology integration timeline, which the companies describe as the following:

In addition, Amazon and Whole Foods Market technology teams will begin to integrate Amazon Prime into the Whole Foods Market point-of-sale system, and when this work is complete, Prime members will receive special savings and in-store benefits. The two companies will invent in additional areas over time, including in merchandising and logistics, to enable lower prices for Whole Foods Market customers.

“We’re determined to make healthy and organic food affordable for everyone. Everybody should be able to eat Whole Foods Market quality – we will lower prices without compromising Whole Foods Market’s long-held commitment to the highest standards,” said Jeff Wilke, CEO of Amazon Worldwide Consumer. ... And this is just the beginning – we will make Amazon Prime the customer rewards program at Whole Foods Market and continuously lower prices as we invent together. There is significant work and opportunity ahead, and we’re thrilled to get started.”

A bit further down the road, Amazon Prime will actually become Whole Foods' customer rewards program.

POV: There are few surprises in the joint announcement. Amazon has long been prized for its competitive pricing and there was never any question it would seek to lower the cost of shopping at Whole Foods. However, it is also clearly going to take pains to preserve Whole Foods' culture, wanting to retain its valuable pool of higher-end shoppers. 

Whole Foods' brick-and-mortar presence in hundreds of heavily populated areas was another big reason for Amazon's decision to buy it, as the locations provide additional density to its supply chain footprint. To that end, the companies announced that "select" Whole Foods stores will have Amazon lockers, where they can pick up Amazon.com items ordered online or return them. Constellation believes that this is just a start, and over time more real estate within Whole Foods stores will be devoted to Amazon.com-related purchasing and returns.

Marketo teams up with Google Cloud: Another SaaS vendor has decided to rely on a public cloud provider rather than run its own infrastructure. Marketing software vendor Marketo has signed a multi-year deal with Google Cloud Platform that will also see an integration between Marketo's tools and Google G Suite and data analytics.

Marketo's marketing automation software will "run end-to-end" on Google Cloud, and Google, an existing Marketo customer, will also expand its usage of the product. Moving its infrastructure will give Marketo, which was acquired last year by Vista Equity Partners for $1.79 billion, more resources to focus on product innovation. In addition, Marketo plans to leverage GCP's machine learning capabilities.

POV: The integration of Marketo and Google's ad analytics will have some strong synergies, says Constellation VP and principal analyst Cindy Zhou. "This provides customers a unified view of marketing campaign and advertising ROI," she says. "Historically, customers have bought ads separately through an ad network, or through Google directly, and it has been a siloed process of ad data and marketing campaign data. There has been no easy way to look at holistic campaign ROI. Companies either manually try to consolidate the data or rely on agency reporting."

Examining VMWorld 2017: In just a few days, VMWare's WMWorld conference will kick off in Las Vegas. The show comes days after the company reported strong second-quarter results, with revenue up 12 percent to $1.9 billion and net income rising 30 percent to $334 million. Here are some of the things you can expect VMWare to discuss at the event.

• VMware and Amazon Web Services: Last October, VMware announced that it had chosen AWS as its public cloud provider, with the intention of creating a hybrid cloud offering that spans on-premises VMWare deployments and AWS, without having to rewrite applications. (Go here for Constellation VP and principal analyst Holger Mueller's deep-dive on the announcement.) At the time, VMWare said the offering would be generally available in the middle of this year; during the earnings conference call, CEO Pat Gelsinger didn't provide many specifics, but indicated the AWS deal will be a big focus at VMWorld. In response to a question, Gelsinger also characterized Microsoft's Azure Stack, which stands to provide stiff competition for VMWare in hybrid cloud, as taking a less customer-friendly approach. 
  
  VMware's AWS integration will allow customers to "seamlessly extend their position to the AWS environment as well as to be able to consume additional AWS services in a very effective manner," he said. "In contrast Azure Stack is about bringing Azure on premise, so it's really many respects the opposite and it's asking customers to fork or create a heterogenity in their on-premise environment just to take advantage of some services that they may want to consume from Microsoft."
   
• Cloud customers in abundance: Thirty VMWare cloud management software customers will appear at VMWorld next week and at its companion event next month in Barcelona. They include Credit Suisse, Box and Polaris Alpha. Topics to be covered include operations monitoring, capacity planning and network management. While vendor executives and product managers are highly knowledgable about their products, customer stories told in their own words are crucial fodder for any enterprise conference. It appears that VMWare has done a solid job of pulling together a lineup.
   
• Future directions: On the earnings call, Gelsinger noted the introduction in May of Pulse IoT Center, for managing, securing and monitoring IoT devices. "IoT and edge specific solutions are being developed with key strategic partners including Fujitsu, HARMAN and EuroTech, as customers look to VMware to help extend the capabilities of the datacenter to the edges of their businesses," he said. Gelsinger also revealed that VMWare and Fujitsu are helping Toyota create a "next-generation in-car platform." He didn't offer any specifics, but those could come during VMWorld keynotes and sessions next week.

 

Marketing Transformation Matrix Commerce Next-Generation Customer Experience Tech Optimization Chief Customer Officer Chief Information Officer Chief Marketing Officer Chief Supply Chain Officer

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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Google looks to differentiate with premium cloud tier: The public cloud market is dominated by Amazon, Microsoft, Google and IBM. While all offer general-purpose and specialized compute power for increasingly lower cost, Google is betting that its proprietary fiber network can give it a competitive edge.

The company has been building out its private fiber network for nearly 20 years, and it now has more than 100 POPs (points of presence) around the world. That translates to low latency and high availability. Current customers already benefit from this private network, but going forward, Google will also offer a lower-cost standard tier, which runs on ISP networks and has comparable performance to competing clouds, it said in a blog post. In this sense, Google isn't offering a higher-powered option than previously but can be more cost-competitive with other clouds.

Once generally available, Standard Tier will be priced up to 33 percent lower than Premium Tier in North America and Europe. While Premium Tier will remain the "default tier for your workloads," Standard will be preferable for some scenarios, Google says. It has certain limitations as well, such as regional versus global load balancing capabilities.

POV: "It's good to offer customers choices, and Google has realized that the best solution doesn't have to be the right solution for all," says Constellation VP and principal analyst Holger Mueller. "But the ramifications go deeper, as with all network changes. Minutes, hours, or days of downtime can quickly become magnitudes more expensive than a higher-quality network that costs enterprises more money."

Walmart fires another e-commerce arrow at Amazon: The world's largest company has been in an e-commerce dogfight against Amazon, and in its latest move to fend off the online giant is teaming up with Google. Walmart customers will be able to shop for products via voice Google Assistant or through the Google Express website and application:

If you’re an existing Walmart customer, you can choose to link your Walmart account to Google and receive personalized shopping results based on your online and in-store Walmart purchases.  For example, if you order Tide PODS or Gatorade, your Google Assistant will let you know which size and type you previously ordered from Walmart, making it easy for you to buy the right product again.

POV: Google had already signed up for similar partnerships with Costco and other retailers, but the Walmart deal will certainly move the needle. The partnership has benefits for both sides; Google Express is a small fish in the e-commerce pond right now, but access to Walmart's massive customer pool—and related historical data that will help improve Google Assistant's accuracy—will be a boon. In turn, Walmart will benefit from the large ecosystem that exists for Google Assistant across Android devices. While it's far from a killing blow against Amazon, this is one partnership that should make a mark on the matrix commerce landscape.

Apple opens up (a little) about Siri's R&D: Speaking of digital assistants and speech recognition technology, this week is the occasion of the preeminent academic conference covering those topics. Many industry mega-vendors, such as IBM and Microsoft, will have researchers on hand presenting papers, but one surprising participant is notoriously secretive Apple.

During the Interspeech conference this week in Stockholm, representatives from Cupertino will present a paper titled "Siri On-Device Deep Learning-Guided Unit Selection Text-to-Speech System. It describes "Apple’s hybrid unit selection speech synthesis system, which provides the voices for Siri with the requirement of naturalness, personality and expressivity."

While the paper is as technically dense as its kind tend to be, Apple has also released a blog post that provides a more accessible summary of the methodology behing Siri's development.

POV: A H/T goes to the Register for spotting Apple's paper on the Interspeech conference's website. Its release follows a pledge made last year by Apple's head of AI research that the company would be more open about AI going forward. It made good on that promise in December, releasing an initial academic paper focused on image recognition, which is an important AI capability for technologies such as driverless cars and security. 

As we wrote at the time, Apple's motivations for opening up about AI are likely driven in part by a desire to attract top talent. It's good to see Apple continue to live up to its AI openness pledge, but expect it to understandably hold back on sharing its juiciest research.

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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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Key takeaways from Salesforce's Q2: Salesforce had a strong second quarter, with revenue up 26 percent to $2.56 billion and the company on track for more than a $10 billion revenue run rate for the fiscal year. Its growth numbers aren't that surprising, of course; what's of more utility for Salesforce observers and customers is the color and context provided during the quarterly conference call. Here's a look at the highlights.

• While Salesforce has many product categories today, its core CRM is still running strong, with revenue up about 14 percent in the quarter. On the call, CEO Marc Benioff predicted that CRM will one day be a $1 trillion market opportunity. Whether that's a reflection of his taste for the bombastic or a sure thing remains to be seen.
• Salesforce is synonymous with Silicon Valley, but has been investing in growing its global footprint. More than 40 percent of new hires in the year to date have been outside the United States, said president Keith Block.
• Benioff said Salesforce is now focusing on reaching $20 billion in revenue, and in "fairly short order." And it will get there how? Here's Benioff's explanation:
  I think a lot of mistakes that the other entrepreneurs have made and I can go through each one. In enterprise software specifically, it’s not to really double down at this point, again on the customer. Get absorbed in your own myopia, get absorbed in your corporate politics, get absorbed in your corporate bureaucracies and yourselves, and try to break out of yourself and recognize the most important thing, continues to be the customer.

Salesforce's AI technology Einstein "has hugely exceeded our expectations," Benioff said. He teased "exciting news" about Einstein coming at the Dreamforce event in early November, and referred to breakthroughs for AI in financial services and healthcare. It will be interesting to see how much wood Salesforce puts behind the Einstein arrow at Dreamforce: Will it have live customers telling their success stories, or only some demos and future direction?

Microsoft's Project Brainwave seeks to democratize deep learning: A new Microsoft deep learning platform codenamed Project Brainwave is heading to the company's Azure cloud in the near future. Brainwave is focused on delivering real-time AI derived from streaming data, such as from videos, sensors and search queries, according to a blog post from Microsoft Research:

The Project Brainwave system is built with three main layers: A high-performance, distributed system architecture; a hardware DNN engine synthesized onto FPGAs; and a compiler and runtime for low-friction deployment of trained models.

First, Project Brainwave leverages the massive FPGA infrastructure that Microsoft has been deploying over the past few years.  By attaching high-performance FPGAs directly to our datacenter network, we can serve DNNs as hardware microservices, where a DNN can be mapped to a pool of remote FPGAs and called by a server with no software in the loop.  This system architecture both reduces latency, since the CPU does not need to process incoming requests, and allows very high throughput, with the FPGA processing requests as fast as the network can stream them.

Second, Project Brainwave uses a powerful “soft” DNN processing unit (or DPU), synthesized onto commercially available FPGAs. ... Although some of these chips have high peak performance, they must choose their operators and data types at design time, which limits their flexibility.  Project Brainwave takes a different approach, providing a design that scales across a range of data types, with the desired data type being a synthesis-time decision. ...  As a result, we achieve performance comparable to – or greater than – many of these hard-coded DPU chips but are delivering the promised performance today.

Microsoft is working to bring Brainwave to Azure and will detail availability in "the near future," according to the blog.

POV: Brainwave is about finding practical ways to bring high-performance deep neural net capabilities to a broad market through Azure, says Constellation VP and principal analyst Doug Henschen. That's because FPGAs (field programmable gate arrays) offer a comparatively low-tech way to apply dedicated, hardware-based computing power to AI challenges without turning to more exotic hardware, such as GPU-based servers, he adds. "Rather than chasing records under controlled lab conditions, the focus is on bringing general purpose AI acceleration into commercial use as soon as possible," Henschen says.

In short, Project Brainwave is "not about conducted elite AI research in an ivory tower," he adds. "It's about bringing responsive deep neural-net capabilities to a broad community of developers that will pursue breakthrough, real-world applications of AI."

Google rolls out Chrome Enterprise: When VMWare founder and CEO Diane Green joined Google in 2015 to lead its cloud business, the prevailing view was that she would spark a wave of activity around generating more business from enterprise IT shops. Google is taking a big step in that direction with the introduction of Chrome Enterprise, a new version of the cloud-centric Chrome OS that adds on many enterprise-friendly—if not mandatory—features, such as deeper security, around-the-clock support and integration with Microsoft Active Directory.

The last feature is especially key, as it means administrators at companies can use familiar on-premises tools to manage both Windows and Chrome devices.

POV: Google made an enterprise push for Chrome devices in 2014, with the introduction of Chromebooks for Work. Chrome Enterprise builds substantially on that idea, but preserves the $50 per device/year price point, which could prove quite attractive to companies, particularly ones already invested in Google Apps. Chromebooks remain highly price-competitive as well. Google is planning to reveal more details about Chrome Enterprise during a webcast, for which registration is available at this link.

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