Chris Kanaracus

Managing Editor, Constellation Insights Constellation

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

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Steve Wilson

Former Vice President and Principal Analyst Constellation Research

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

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Here comes the 'Five Eyes' fallout: Last month, the so-called Five Eyes nations of the US, UK, Canada, New Zealand and Australia held their latest meeting on intelligence-sharing and cybersecurity matters. While the subject of law enforcement's ability to access encrypted messages was expected to be a focal point of the meeting, an official post-mortem said very little about it.

Some weeks later, the encryption debate is about to ramp up, with Australia's government proposing a new law that would compel companies such as Google to decrypt messages from alleged terrorists and other types of criminals, as the AP reports:

The new law would be modeled on Britain’s Investigatory Powers Act, which was passed by the British Parliament in November and gave intelligence agencies some of the most extensive surveillance powers in the Western world, the government said.

Under the law, internet companies would have the same obligations telephone companies do to help law enforcement agencies, Prime Minister Malcolm Turnbull said. Law enforcement agencies would need warrants to access the communications.

“We’ve got a real problem in that the law enforcement agencies are increasingly unable to find out what terrorists and drug traffickers and pedophile rings are up to because of the very high levels of encryption,” Turnbull told reporters.

“Where we can compel it, we will, but we will need the cooperation from the tech companies,” he added.

POV: "I am sympathetic to government and law enforcement's interest—on the surface—to access the telecommunications of wrongdoers and suspects, just as they do conventionally," says Constellation VP and principal analyst Steve Wilson. "But the reality is that cloud service providers have been under more and more pressure to remove themselves from the business affairs of their tenants. And the upshot has been encryption protocols where the keys are under control of the tenants. Several providers have moved to the same posture: We couldn't decode your data even if we wanted to."

That of course means that law enforcement would have to serve a warrant on clients, not cloud providers, Wilson notes: "It's important to see that this is not about encryption protocols but key management protocols. The cloud providers don't have the keys. So when governments say they insist that conventional rule of law applies to tech providers, do they appreciate how the technology works?"

It's easy to see a scenario where law enforcement demands data concerning a certain client, and then cloud providers simply hand them encrypted files, which officials would then have to crack on their own. Alternatively, is the government's intent to make cloud providers change their business models in order to retain clients' keys? "That's the only way to access suspects' data without a crypto backdoor," Wilson says.

Rimini Street makes tactical shift in Oracle suit appeal: Independent software support provider Rimini Street has taken a new legal tack in its appeal of a copyright judgment Oracle won against it in 2015, with its lawyer telling an appeals court that the dispute really is about contractual rights, as the Register reports:

The case hinges on Rimini Street's 2010 decision to host Oracle software on its own servers, as well as "cloning" that software and making it available to multiple customers.

The smaller company accepted some of the charges against it, saying it will pay $35.6m for "innocently infringing the software", but appealed against the rest following the October 2016 judgment.

Oral arguments in the case were heard by three judges in the Ninth Circuit yesterday, where Rimini's lawyer Mark Perry argued that the case should come under contractural – not copyright – laws.

Perry said that a "single fundamental error infected and pervaded the entire copyright case", arguing that Rimini should have been allowed to copy the software for its clients, as they had paid licence fees.

POV: The Oracle-Rimini Street case is complicated, and it's fairly easy to go deep into a rabbit hole in the course of understanding all of the issues and arguments. But it's also an important case to follow, given Rimini's status as the face of the third-party maintenance market. 

IBM Watson's performance under Wall Street's microscope: IBM has generated plenty of hype around its Watson cognitive computing technology, but questions remain about how much Watson is delivering in terms of revenue, equity analyst firm Jefferies argues in a new, in-depth report.

While IBM has issued 200 press releases with Watson in the headline since 2013, and spent $15 billion on cognitive computing development between 2010 and 2015, "the company has been very circumspect about sharing financial information about Watson," analyst James Kisner writes.

Moreover, while Watson is one of the most complete off-the-shelf platforms in the market, it requires quite a bit of consulting services, and IBM is also being outgunned in the competition for AI talent by the likes of Amazon, Microsoft and Google, he argues.

Azure gets nested virtualization: Microsoft added support for nested virtualization in Windows Server 2016, but it's only now that the capability is available on the Azure cloud platform. 

Nested virtualization is just what it sounds like: You can use it to run a hypervisor and VMs inside a VM. Why would you want to do that? There are multiple reasons, as Microsoft notes in a blog post announcing the new feature:

Such nested environment provides great flexibility in supporting your needs in various areas such as development, testing, customer training, demo, etc. For example, suppose you have a testing team using Hyper-V hosts on-prem today. They can now easily move their workloads to Azure by using nested VMs as virtualized test machines.

You could also use nested virtualization to run pre-production code on a server used by multiple users without impacting them, Microsoft adds.

POV: The public cloud war is being waged on multiple fronts: Cost, global availability and performance, and feature richness. Nested virtualization might be a bit in-the-weeds on its face, but its something that Microsoft shops large and small will find an appealing addition to Azure. Given the feature's sweet spots, it will also help customers build an on-ramp to using Azure more widely.

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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Infor has an AI platform, and its name is Coleman: The big news at Infor's Inforum conference this week in New York is Coleman, its entry into AI (artificial intelligence) for business applications. Here are the key details from its announcement:

A pervasive platform that operates below an application's surface, Coleman mines data and uses powerful machine learning to improve processes such as inventory management, transportation routing, and predictive maintenance; Coleman also provides AI-driven recommendations and advice to enable users to make smarter business decisions more quickly.

In addition, Coleman acts as a smart AI partner, augmenting the user's work.  Coleman uses natural language processing and image recognition to chat, hear, talk, and recognize images to help people use technology more efficiently. 

Coleman is named after Katherine Coleman Johnson, an African-American physicist and mathemetican at NASA who made key contributions to the success of the moon landing.

Infor executives provided more details of Coleman in a question-and-answer session with press and analysts.

While the announcement came seemingly out of the blue, Infor has actually been working on Coleman for quite a while, executives said. Its elements include Amazon Web Services' Lex chatbot platform and machine learning frameworks such as TensorFlow as well as one Infor acquired 18 months ago with the purchase of Predictix, which has a focus on retail scenarios.

Coleman is industry-specific by design, said Infor president Duncan Angove: "We're not in the business of building a horizontal machine learning platform." It also wants to use Coleman as a means to encourage customers to upgrade. Infor has more than 8400 cloud customers, but 90,000 overall. Migrating the rest to its Cloudsuite lineup is a top priority.

In most cases, Coleman will be included as part of Cloudsuite, not sold separately in discrete applications. "It's one reason our customers should seek to upgrade, so they can turn on Coleman," Angove said.

POV: Coleman was an announcement Infor clearly had to make now if only for the sake of perception, given that every enterprise apps vendor needs to tell an AI story in the current market. While insisting a number of Coleman elements are available today and with customers, this week's announcement marks a step in a longer journey for Infor—one that could indeed have resonance with customers. 

Workday pulls the trigger on PaaS—finally: While Workday has long provided a configuration layer for its cloud HCM apps, the underlying platform remained closed off. At last year's Workday Rising conference, executives confirmed that a PaaS offering was in the works, but didn't provide concrete details.

The time has now come for Workday to launch its PaaS, CEO Aneel Bhusri said in a blog post:

Today, we are ready to take a big step forward on our extensibility journey by announcing our intent to open our platform to customers and a broader ecosystem of partners, independent software vendors (ISVs), and developers.

And like everything we do, we based our decision on customer input. Simply put, a growing number of customers have been asking for a more open Workday platform. They want to use Workday as a cloud backbone that supports cohesive, digital workflows across multiple business applications—reflective of how their people work and how their businesses operate in today’s hyper-connected, real-time world.

By opening up the Workday Cloud Platform and entering the Platform-as-a-Service (PaaS) market, Workday intends to enable customers and our broader ecosystem to use our platform services to build custom extensions and applications that can significantly enhance what organizations are able to accomplish with Workday.

While Workday's software is written in Java, the company's developers work in an abstraction layer built on a proprietary language called XpressO. It's a similar approach to that taken by Salesforce.com and its APEX language for the widely used Force.com platform.

Workday's PaaS will give customers the ability to create new business processes and integrate third-party applications, among other things, Bhusri wrote. More details will be forthcoming at Workday Rising later this year.

POV: Workday has been talking about PaaS for a few years now, so in that sense this announcement is a long time coming. As Constellation VP and principal analyst Holger Mueller notes, Workday has had one of the most proprietary and closed-off platforms in the SaaS business. Those qualities don't fly so well in today's environment, and therefore Workday has made a smart move. Now it's about the execution.

SAP user group eyes line-of-business for member recruiting: One result of digital transformation is the evolution of IT departments' relationship and partnership with business users. That view is backed up by Paul Cooper, chairman of the UK and Ireland SAP User Group, who tells the Register:

"One theme for the next couple of years will be around driving our line-of-business membership," Cooper said.

"What we're seeing is, as the cloud becomes more important to people, as well as Software-as-a-Service, the IT department's role is changing, while the business user is becoming more important.

"They can go and put a [project] together and roll it out almost without the IT department's involvement, so for us it's important that we start to attract the people using those solutions, to help them share their knowledge and learning."

POV: The concept of "shadow IT" is nothing new. But if digital transformation efforts are to take hold most effectively, all parties need to be at the table and in communication. The rise of easily purchased, richly functional SaaS apps also ups the shadow IT stakes significantly, althought it's not as if line-of-business users are going to roll out a new SAP ERP system without plenty of IT involvement.

Legacy Watch: Mainframe woes at the Graybar Hotel: A potentially "long-term" mainframe system outage at the Milwaukee, Wisconsin County jail system is making conditions inside a bit more arduous than usual.

It's meant that bookings and releases are being held up since they must be processed manually, Milwaukee Patch reports. It has also impacted lawyer visits, phone communications between inmates and family members, and inmate commissary accounts. The problems continued after IT staffers ordered replacement parts that didn't work, according to the Patch report. 

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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Transformative times for Microsoft: There are plenty of changes ongoing at Microsoft these days. Last week, the company announced layoffs—reportedly up to several thousand—as part of a plan to reshape its sales force around cloud computing. Now news has emerged of top executives leaving Microsoft, including CIO Jim DuBois.

He held the post since 2013. DuBois' will be succeeded by Kurt DelBene, Microsoft's current head of corporate strategy, but in an interesting and telling move, DelBene won't take the CIO title. Rather, in his new role DelBene will become Microsoft's chief digital officer.

POV: As with DuBois, DelBene's duties are internal-facing. He'll be tasked with overhauling Microsoft's IT practices, which could be a considerable challenge. Meanwhile, the sales reorganization should be a hot topic at this week's Inspire conference, Microsoft's annual event for its large partner channel.

Inspiring growth: Keeping partners happy is a crucial job for Microsoft, since it derives 95 percent of its revenue from the channel. Some 17,000 partners are expected to attend Inspire in Washington, D.C. this week, but that's just a fraction of the total pool. Microsoft has 64,000 cloud partners, which is more than Amazon Web Services, Google and Salesforce combined, EVP Judson Althoff said in a blog post.

Digital transformation represents a potential $4.5 trillion market opportunity, Althoff wrote. It wants to work with partners to grab as much of that pie as possible.

To that end, Microsoft announced a number of new partner programs at Inspire, as well as what it terms a simplified partner relationship model.

First up, Microsoft is expanding its investment in the Azure co-sell program it announced last year. The program provides sales and marketing support for partners working with Azure, including incentives for internal Microsoft sales reps to co-sell Azure with partners. Microsoft is increasing its investment in the program to about $250 million, according to Althoff's blog.

Second, Microsoft is rolling out ISV Cloud Embed. Under the plan, partners can buy Dynamics 365, Power BI, Power Apps and Flow for up to 50 percent off list, and then embed them in their own applications.

Meanwhile, Microsoft is reorganizing the way it works with partners around three scenarios: "build-with," "go-to-market" and "sell-with." This blog post goes in-depth on what the changes mean.

POV: There is yet more news coming out of Inspire, including the availability of Azure Stack, which brings the cloud platform inside customers' data centers; and a new product bundle called Microsoft 365. Constellation analysts will be following the conference closely this week.

Inforum 2017: Infor kicks off its Inforum user conference in New York this week, with digital transformation expected to be a key topic of discussion. In recent years, the business applications vendor has overhauled its flagship software from front to back, placing an emphasis on improved user experience as well as a drive into micro-verticals. Myself, as well as Constellation Research VP and principal analysts Doug Henschen and Holger Mueller will be in attendance. Look for our coverage on Twitter and Constellation's website.

Legacy Watch: ERP disaster recovery: Enterprise resource planning software has slowly but steadily begun moving to the cloud, and with it, ERP's longtime bogeymen—cost and time overruns, dissatisfied users, difficult upgrades and outright project failures—could become mostly a thing of the past.

But those days have yet to arrive. In the meantime, CIO has put together an extensive roundup of ERP disasters and controversies. It's well worth a read.

Chris Kanaracus

Managing Editor, Constellation Insights Constellation

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chris Kanaracus

Managing Editor, Constellation Insights Constellation

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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