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Event Report: Inside The Apple #SpringForward Event

Event Report: Inside The Apple #SpringForward Event

Apple Event Announcements Shows Continued Progression In The Digital Lifestyle

The Spring Forward Apple event at Yuerba Buena gardens brought forth a slew of major announcements that pointed to the continued build out of the Steve Jobs "Star Trek" road map.
Figure 1. Tim Cook welcomes the crowd at the #SpringForward event

@apple @tim_cook #appleevent

The analysis of key announcements include:

  • Growth in Apple Stores in China . The event kicked off with a touching video of the latest Apple store opening in China. The Hangzhou West Lake store is the 18th in China and strategically located in one of the hottest shopping areas. Tim Cook emphasized the commitment to adding more stores in China. Point of View (POV): Apple's aggressive move to build out China makes perfect sense in not only combating the piracy of fake Apple stores, but also creating an opportunity to build a direct customer experience with the fastest growing global market. In a conversation with someone familiar with Apple's privacy efforts, there may be thousands of workers who believe they work at an Apple store but in fact do not. The real Apple stores will most definitely help combat the fake ones. Moreover, Apple is under-represented in coverage in the number of stores per potential buyer.
  • HBO distribution agreement with Apple TV. One of the surprises was the HBO Now limited exclusive arrangement with Apple. The service is set to be offered at $15 per month. In addition, Apple announced a price cut on Apple TV to $69 per box. (POV): Just in time for Game of Thrones, the direct to consumer streaming video service showed how the content producers intend to by pass the middlemen. Constellation expects other direct digital distribution deals to emerge. However, the market can expect more blurring between technology providers, content producers, and distribution networks. As for Apple TV, expect a new one to replace the outdated 2012 technology. Reliable sources predict the announcement as early as the Worldwide Developers conference in June.
  • New Retina Macbook. The new device sports a two pound design point, 13.1 mm thickness, Intel Core-M processor, fan-less design, all day battery, new butterfly keyboard, Force Touch trackpad, and USB Type C port. Available for sale April 10th, the Retina Macbook will come in three colors: gold, silver, and space gray. (POV): The first impression of the new Macbook was the weight. At half a pound heavier than an iPad 3, the device seemed light as a feather. Typing on the new Macbook keyboard quickly brought back memories of a great IBM Selectric feel. The specialized butterfly mechanism which replaced the old scissor keyboard produced a pleasurable sensory experience. Despite the slower clock speed at 1.1 GHz to 1.3GHZ, the device serves its purpose as a light-weight easy to use laptop .
  • Apple Research Kit. The new open source software framework helps researchers create apps that collect data for medical research while enabling opt in permissions on sharing that data with privacy controls in tact. Five apps available include Asthma Health by Mount Sinai - Download, GlucoSuccess - Download, MyHeart Counts - Download, Parkinson mPower - Download, and Share the Journey - Download (POV): The move to create Research Kit provides a complement to Health Kit. Even those who use Android devices can utilize the framework. Researchers now have a platform to address the two biggest issues - low sample sizes and poor normalization of data collection. Partnerships with global research institutions help cement the role Apple has in serving as a catalyst and nexus for medical research.
  • Apple Watch. The much anticipated event was the launch of Apple's newest product line. The watch is available in three tiers Apple Watch Sport ($349 to $399), Apple Watch ($549 to $1100) and Apple Watch Edition ($10,000 to $17,000). As the first smart watch to use Apple Pay, users can use NFC for payments. The watch also sports a haptic feedback interface (Taptic Engine), digital touch direct communication, and magnetic charging cable. A key use will be fitness apps which tack into the accelerometer, heart rate, and estimated calorie burn. (POV): Despite the slew of smart watch announcements at Mobile World Congress, few consumers and industry watchers showed interest in competitors ahead of the Apple Watch launch. Digital Touch provided both an intuitive and unique user experience. The ability to rapidly share was the key feature. A key area to watch will be how quickly developers rush to provide new apps and build out this new platform. After year's of not wearing a watch, will this be the catalyst to drive watch adoption? This remains a wait and see.

 

Figure 2. The Scene From the #AppleEvent at Yuerba Buena Gardens

The Bottom Line: Choosing What Not To Do Remains Apple's Core Strategy

Given the massive resources Apple has at its disposal, including almost $180B, and a massive patent trove, Apple's shown great discipline in the core tenant of strategy - deciding what not to do. Apple has successfully expanded its networked economy that spans content, technology enablement, and direct to consumer distribution. Building on a trusted platform, the advancements in continuity of experience, digital life style services based on trusted identity, and a value exchange system rivaled to none, show how the Apple strategy is paying off for not only consumers, but also those who expect the art of the possible to come to life.

Your POV.

Ready for a watch from Apple, research kit, and the new Macbook? Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org.

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News Analysis - Pivotal makes CloudFoundry more about multi-cloud

News Analysis - Pivotal makes CloudFoundry more about multi-cloud

On March 24th Pivotal announced that it will support deployments to Amazon Web Services (AWS) per ‘one click’ from its Cloud Foundry product.
 
 

So let’s dissect the press release in the usual news analysis format – the press released can be found here:

SAN FRANCISCO – March 24, 2015 – ?Pivotal?®, the creators of Cloud Foundry®, today announced that it will provide supported access to Pivotal Web Services, which includes cloud infrastructure, to enterprise subscription customers of ?Pivotal Cloud Foundry?®, the company’s cloud native application platform. Pivotal Cloud Foundry now includes one-click Amazon Web Services (AWS) installation integration, delivering Amazon customers the simplest path to their own dedicated Cloud Foundry platform on AWS. With today’s news, the industry’s ?fastest growing open source product? ever extends its hybrid cloud offering with enterprise integration for hosted, public, and private clouds.

 
Pivotal Momentum in 2014

MyPOV – This is an important step for Cloud Foundry customers, who – after building their next generation applications in the product want to deploy these applications to different cloud platforms. With AWS Pivotal picked the obvious market leader for public cloud and has taken an important first step in the direction of being able to deploy Cloud Foundry built application to more cloud infrastructures. It will be interesting to see what Pivotal’s next steps will be, though likely it will be in the direction of OpenStack.

“With the latest Pivotal Cloud Foundry release, Pivotal becomes the first major middleware vendor to include managed public cloud capacity in a software subscription at no additional cost,” said James Watters, vice president and general manager, Cloud Platform Group at Pivotal. “By offering hosted public cloud along with dedicated self-install on either public or private clouds, Pivotal Cloud Foundry provides the instant-on affordable capacity ?Line of Business (LOB)? executives need with the robust security and automation features IT can also bring to private clouds. With today’s release, LOB and IT can finally agree on a single platform.”

MyPOV – If Pivotal can create piece for LOB vs IT discussions and conflicts of interest remains to be seen – but this step gives Cloud Foundry customers more choices of deployment, and more choice gives more flexibility. And it is this flexibility customers need and want to deploy their next generation applications.

Delivering the One Cloud Platform Both Business and IT Can Agree On
LOB executives have championed the use of Pivotal’s hosted services, often in combination with Pivotal Labs agile development, to quickly deliver new digital products. IT executives value Pivotal Cloud Foundry’s ability to also run on private infrastructure. With our new hybrid cloud ready subscriptions LOB developers can start immediately on AWS while their private cloud build-outs complete, or run there entirely.

 

MyPOV – Pivotal raises an interesting point here – that enterprises can win time, use e.g. AWS for development and test – while the private cloud gets ramped up. Certainly a possible scenario – but what we have found in practice is, that for most next generation application use cases, enterprises cannot pull these apps back into private cloud as they need the elasticity of the public cloud to successfully run them.

Delivering AWS Customers the Best Path to Cloud Foundry
Today’s release also brings AWS virtual appliance support for Pivotal Cloud Foundry. With this feature, AWS customers can now natively deploy Cloud Foundry applications in hours on their AWS infrastructure. This complete hybrid cloud support lets operators migrate Cloud Foundry applications freely between public and private clouds, regardless of their underlying infrastructure.


MyPOV – This is a key value add with this Cloud Foundry release. The next logical question will be if Cloud Foundry applications can be logically partitioned across private and public cloud, allowing high utilization for private cloud resources and ‘bursting’ to the public cloud as needed. But one step at the time. First you need the capabilities of this release, or you need to walk before you can run.

Delivering Pivotal Cloud Foundry with the Cloud Infrastructure Included
Today, Pivotal customers can setup Pivotal Cloud Foundry under their own AWS account, or let Pivotal manage an AWS instance on their behalf by taking advantage of our new Pivotal Web Services with Enterprise Support. This new edition of Pivotal Cloud Foundry offers hosted application instances under a customer’s existing license at no extra cost. Pivotal Web Services is ideal for rapid deployments and avoids the administrative overhead of managing a public cloud infrastructure.
 
Pivotal Multi-Cloud Support Reality & Plans
MyPOV – Again Pivotal gives Cloud Foundry customers choice and choice is a good thing for customers. Allowing customers to either setup Cloud Foundry on their own account or have Pivotal do that for them gives customers more deployment choices. It will be interesting to see if Pivotal can support that duality for the next public cloud infrastructures that it will support. By then we will know also which deployment customers prefer overall or for which kind of projects.

Overall MyPOV

As easy PaaS vendors have made it for enterprises to build next generation application, it remains still hard for them to deploy these applications. Cloud infrastructure evolves rapidly and for enterprises to stay on top of them all the way to deploying their applications efficiently – is a huge challenge. Pivotal’s move makes it easier for enterprises to focus on their applications and how they can transform their business in the age of globalization and digital disruption – which is already a lot for enterprises to handle.

For Pivotal it means that the vendor now needs to create adoption and then deliver further public cloud deployment options. Issuing a roadmap on the next milestones is always something welcome by prospects, customers and the ecosystem. But as mentioned before – one step after another – you need to stand before you can walk, walk before you can run. Congrats to Pivotal for a key move making new PaaS investments deployed more easily to the (public) cloud.


More on Pivotal
 
  • News Analysis - Pivotal pivots to OpenSource and Hortonworks - Or: OpenSource keeps winning - read here

More on NextGeneration Applications::
 
  • Progress Report - Cloudera is all in with Hadoop - now off to verticals - read here
  • First Take - SAP Cloud for Planning - The next spreadsheet killer is off to a good start - read here
  • Market Move - Oracle buys Datalogix - moves into DaaS - read here
  • News Analysis - SAP commits to CloudFoundry and OpenStack - Key Steps - but what is the direction? Read here
  • Event Report - MongoDB is a showcase for the power of Open Source in the enterprise - read here
  • Musings - A manifesto: What are 'true' analytics? Read here
  • Future of Work - One Spreadsheet at the time - Informatica Springbok - read here
  • Musings - The Era of the no-design Database - Read here
  • Mendix - the other path to build software - read here
  • Musings - Time to ditch your datawarehouse .... - Read here
Find more coverage on the Constellation Research website here.
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What do privacy's critics have to hide?

What do privacy's critics have to hide?

Yawn. Alexander Nazaryan in Newsweek (March 22) has penned yet another tirade against privacy.

His column is all strawman. No one has ever said privacy is more important than other rights and interests. The infamous Right to be Forgotten is a case in point -- the recent European ruling is expressly about balancing competing interests, around privacy and public interest. All privacy rules and regulations, our intuitions and habits, all concede there may be over-riding factors in the mix.

So where on earth does the author and his editors get the following shrill taglines from??

  • "You're 100% Wrong About Privacy"
  • "Our expectation of total online privacy is unrealistic and dangerous"
  • "Total privacy is a dangerous delusion".

It is so tiresome that we advocates have to keep correcting grotesque misrepresentations of our credo. The right to be let alone was recognised in American law 125 years ago, and was written into the UN International Covenant on Civil and Political Rights in 1966. Every generation witnesses again the rhetorical question "Is Privacy Dead?" (see Newsweek, 27 July 1970). The answer, after fifty years, is still "no". The very clear trend worldwide is towards more privacy regulation, not less.

Funnily enough, Nazaryan makes a case for privacy himself, when he reminds us by-the-by that "the feds do covertly collect data about us, often with the complicity of high-tech and telecom corporations" and that "any user of Google has to expect that his/her information will be used for commercial gain". Most reasonable people look to privacy to address such ugly imbalances!

Why are critics of privacy so coldly aggressive? If Nazaryan feels no harm comes from others seeing him searching porn, then we might all admire his confidence. But is it any of his business what the rest of us do in private? Or the government's business, or Google's?

Privacy is just a fundamental matter of restraint. People should only have their personal information exposed on a need-to-know basis. Individuals don't have to justify their desire for privacy! The onus must be on the watchers to justify their interests.

Why do Alexander Nazaryan and people of his ilk so despise privacy? I wonder what they have to hide?

Digital Safety, Privacy & Cybersecurity Distillation Aftershots Security Zero Trust Chief Customer Officer Chief Information Officer Chief Information Security Officer Chief Privacy Officer

First Take - ADP Meeting of the Minds - Day #1 Keynote

First Take - ADP Meeting of the Minds - Day #1 Keynote

We are attending ADP’s Meeting of the Minds (MOTM) in Nashville. The conference is well attended, targeted at ADP’s North American national accounts, with over 1100 client attendees from over 550 clients.
 
 

My top three takeaways

No change in the vision – It was good to see that ADP CEO Carlos Rodriguez used the same slide to walk the audience through the ADP HCM vision. It spans from Recruiting to Retirement with a focus on client’s largest investment, challenge and opportunity – people. Keeping the vision stable is key for a number or reason – as customers need to understand and endorse it, product development takes time etc. so good to see.

 
2014 ADP Roadmap
ADP CEO Rodriguez with the 2015 ADP Roadmap
UI & Analytics – ADP made announcements in both the User Interface and Analytics space a year ago and did a good job following up with customer testimonials that it has delivered on these. The most impactful is probably the new practitioner user interface – exposing more of the new functionality ADP has created to the HR professionals. 
 
Cambern presents the (still WIP) Practitioner UI
New ways of analyzing data – Probably the biggest announcement was ADP Data Cloud – allowing to bring together both internal ADP and external data for better insights. ADP did not share technical details on the keynote – and you can bet we will dig deeper during the conference – but if ADP gets this right – it will make a huge impact for their customers.
Masiero introduced the ADP Data Cloud

MyPOV

A good kickoff for the MOTM conference – with a lot of time spend showing that ADP has delivered on its premises, always a good development. But also good to see that ADP is not stopping here – and continues to innovate. We will try to look into more of the announcements in the next days –stay tuned.
 
More on ADP
 
  • Progress Report - ADP shows great vision, delivers product innovation - now it needs adoption - read here
  • Site Visit - ADP's new innovation lab in Chelsea - read here
  • News Analysis - ADP announces Spin-Off plans for Dealer Services, sharpens ADP's focus on HCM - read here.
  • Event Report - ADP's Meeting of the Minds - ADP has made up its mind (almost) - customers not yet - read here.
  • First take - 3 Key Takeaways from ADP's Meeting of the Minds Conference Day 1 Keynote - read here.
  • ADP innovates with with verve and good timing – read here.
 
And  more on the importance of the paycheck for HCM:
 
  • Could the paycheck re-invent HCM – yes it can – read here.
  • And suddenly, payroll matters again! Read here.

Find more coverage on the Constellation Research website here.
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Card Not Present fraud shows no sign of improving

Card Not Present fraud shows no sign of improving

The Australian Payments Clearing Association (APCA) releases card fraud statistics every six months for the preceding 12m period. Lockstep monitors these figures and plots the trend data. We got a bit too busy in 2014 and missed the last couple of APCA releases, so this blog is a catch up, summarising and analysing stats from calendar year 2013 and AU financial year 2014 (July 2013 to June 2014).

CNP trends pic to CY 2013
CNP trends pic to FY 2014



In the 12 months to June 2014,

  • Total card fraud rose by 22% to A$321 million
  • Card Not Present (CNP) fraud rose 27% to A$256 million
  • CNP fraud now represents 80% of all card fraud.

APCA is one of the major payments systems regulators in Australia. It has only ever had two consistent things to say about Card Not Present fraud. First, it reassures the public that CNP fraud is only rising because online shopping is rising, implying that it's really not a big deal. Second, APCA produces advice for shoppers and merchants to help them stay safe online.

I suppose that in the 1950s and 60s, when the road toll started rising dranatically and car makers we called on to improve safety, the auto industry might have played down that situation like APCA does with CNP fraud. "Of course the road toll is high" they might have said; "it's because so many people love driving!". Fraud is not a necessary part of online shopping; at some point payments regulators will have to tell us, as a matter of policy, what level of fraud they think is actually reasonable, and start to press the industry to take action. In absolute terms, CNP fraud has ballooned by a factor of 10 in the past eight years. The way it's going, annual online fraud might overtake the cost of car theft (currently $680 million) before 2020.

As for APCA's advice for shoppers to stay safe online, most of it is nearly useless. In their Christmas 2014 media release (PDF), APCA suggested:

Consumers can take simple steps to help stay safe when shopping online including:

  • Only providing their card details on secure websites - looking for the locked padlock.
  • Always keeping their PC security software up-to-date and doing a full scan often.

The truth is very few payment card details are stolen from websites or people's computers. Organised crime targets the databases of payment processors and big merchants, where they steal the details of tens of millions of cardholders at once. Four of the biggest ever known credit card breaches occurred in the last 18 months (Ref: DataLossDB):

    • 109,000,000 credit cards - Home Depot, September 2014
    • 110,000,000 credit cards - Target, December 2013
    • 145,000,000 credit cards - eBay, May 2014
    • 152,000,000 credit cards - Adobe, Oct 2013.

In its latest Data Breach Investigations Report, Verizon states that "2013 may be remembered as ... a year of transition to large-scale attacks on payment card systems".

Verizon DBIR 2014 Fig 11 Number of breaches per category over time


Verizon has plotted the trends in data breaches at different sources; it's very clear that servers (where the datsa is held) have always been the main target of cybercriminals, and are getting proportionally more attention year on year. Diagrag at right from Verizon Data Breach Investigations Report 2014.

So APCA's advice to look for website padlocks and keep anti-virus up-to-date - as important as that may be - won't do much at all to curb payment card theft or fraud. You might never have shopped online in your life, and still have your card details stolen, behind your back, at a department store breach.

Over the course of a dozen or more card fraud reports, APCA has had an on-again-off-again opinion of the credit card scheme's flagship CNP security measure, 3D Secure. In FY2011 (after CNP fraud went up 46%), APCA said "retailers should be looking at a 3D Secure solution for their online checkout". Then in their FY2012 media release, as losses kept increasing, they made no mention of 3D Secure at all.

Calendar year 2012 saw Australian CNP fraud fall for the first time ever, and APCA was back on the 3D Secure bandwagon, reporting that "The drop in CNP fraud can largely be attributed to an increase in the use of authentication tools such as MasterCard SecureCode and Verified by Visa, as well as dedicated fraud prevention tools."

Sadly, it seems 2012 was a blip. Online fraud for FY2014 (PDF) has returned to the long term trend. It's impossible to say what impact 3D Secure has really had in Australia, but penetration and consumer awareness of this technology remains low. It was surprising that APCA previously rushed to attribute a short-term drop in fraud to 3D Secure; that now seems overly optimistic, with CNP frauds continuing to mount after all.

In my view, it beggars belief the payments industry has yet to treat CNP fraud as seriously as it did skimming and carding. Technologically, CNP fraud is not a hard problem. It's just the digital equivalent of analogue skimming and carding, and it could be stopped just as effectively by using chips to protect cardholder data, just as they do in Card Present payments, whether by EMV card or NFC mobile devices.

In 2012, I published a short paper on this: Calling for a Uniform Approach to Card Fraud Offline and On (PDF).

Abstract

The credit card payments system is a paragon of standardisation. No other industry has such a strong history of driving and adopting uniform technologies, infrastructure and business processes. No matter where you keep a bank account, you can use a globally branded credit card to go shopping in almost every corner of the world. The universal Four Party settlement model, and a long-standing card standard that works the same with ATMs and merchant terminals everywhere underpin seamless convenience. So with this determination to facilitate trustworthy and supremely convenient spending in every corner of the earth, it's astonishing that the industry is still yet to standardise Internet payments. We settled on the EMV standard for in-store transactions, but online we use a wide range of confusing and largely ineffective security measures. As a result, Card Not Present (CNP) fraud is growing unchecked.

This article argues that all card payments should be properly secured using standardised hardware. In particular, CNP transactions should use the very same EMV chip and cryptography as do card present payments.

Digital Safety, Privacy & Cybersecurity Infosec Chief Information Officer

Plex – working hard to get their fill

Plex – working hard to get their fill

indexAnother week another analyst day…this time it was to Detroit and a meeting with Plex Systems. Between my attempts to discover where South Detroit was located and enjoying a great tour of the Sanders Fine Chocolate factory, I was able to spend an educational day and half with the Plex executive team. The time was well spent getting an update on where Plex ended up in 2014 and where they are heading for 2015. A few take aways:

Cloud remains the theme of the day. Plex continues to push and leverage the fact that they have been focused on delivering their solutions via the cloud since day one. That all their applications and solutions are 100% cloud focused. While the reality is that users are not 100% sold on going all in with cloud based applications, the tide continues to turn. By some estimates close to half of Chief Supply Chain officers are still hesitant about the value of the cloud. However it is our contention that much of that is due to only hearing terms like “multi-tenant,” “no version upgrades,” or “lower TCO” to describe the value of the cloud. There continues to be a gap in the market of solution providers demonstrating what NEW business models the cloud allows. The elasticity the cloud offers, the ability to quickly achieve network effects or even the fluidity the cloud offers need to be the reason to leverage the cloud. For example the ability for Plex to quickly get on line a factory gives their customers the necessary flexibility to make the business decisions necessary in the current manufacturing environments. The value of the cloud is in the new business models it allows the users of cloud applications to take advantage of, not simply that it will cost less than on premise. Plex has an advantage that they are fully focused on how the business models the cloud offers, but other vendors are quickly closing that gap.

Plex continues to get its house in order: What struck me from CEO Jason Blessing’s opening discussion was the pace at which they are ramping up quota carrying sales representatives. They have doubled the number of sales reps in 2014 from 2013 and plan to continue on that trajectory in 2015. But what is more important is their reorganization of the team. Separating the farmers from the hunters, as well as assigning a team to focus on the process industry, a new focus for Plex. I realize that at times banal items like number of sales reps is not as fun to discuss as new feature function, but the reality is I have yet to see a product that sells itself. You better have the boots on the ground to drive the revenue. Plex is also making continued investments in their R&D, more than doubling the amount invested year over year in 2014. What remains to be seen is can Plex hire the Screen Shot 2015-03-19 at 3.59.02 PMright people to their sales team and will their efforts in R&D keep pace with their renewed efforts in the customer acquisition side? Based on their domestic addressable market they should have plenty of targets to go after for their pipeline. But we will also keep an eye on their potential global expansion – where will Plex make their first true foray into the international markets? China, Germany or maybe India?

Is the portfolio ready for prime time? Plex’s approach to the market by offering a three level approach: full ERP, dual ERP or Hybrid ERP is just a fancy way of saying you can buy our full suite as a stand alone, use it in conjunction with existing ERP system or buy our point solutions. An underlying theme in the discussions was Plex’s move towards enhancing their overall solution portfolio but also starting to approach more sales opportunities with stand alone modules such as MES, Supplier quality, EDI or Inventory Management. This strategy resonates with what we believe the market has an appetite for. The days or major ERP overhauls are past, even if there continues to be disgruntled customers using large ERP solutions from the usual suspects. But point solution sales or tackling parts of the ERP puzzle will continue to be ripe. The challenge for Plex is around their portfolio. They mentioned many stand alone MES opportunities, but what about the other solutions. More importantly where does their product road map go from here? Whether they have more solutions to fill out their overall portfolio as well as sell as stand alone offerings. For example – warehouse management (WMS), forecasting and planning engines or even demand sensing analytical engines. Plex must be shrewd in their decision of where to invest moving forward.

Overall it feels as if bright days are ahead for Plex. The market opportunity is ripe, they have been building on their extensive experience in the discrete manufacturing space, demonstrate a dogged focus on making their customers all “happy ERP customers” and have a cohesive management team. However, they are approaching a stage where many companies begin to lose their way or hit the proverbial wall. It will be up to the executive team to continue to have a laser focus on their primary markets and ensure they are judicious with the development of solutions and applications that complement this strategy. Often companies begin to chase shadows and false hopes while trying to maintain their growth rate. They spend too much treasure and human resources in solutions that are too tangential to their core business or chase markets that are just beyond the reach of their core competencies.

Some will win and some will lose, it is up to Plex to be the former.

Resources: 

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Social Business News - March 16 2015

Social Business News - March 16 2015

The following video contains news about:

  • Microsoft Office 365 Delve rolling out to eligible customers
  • LiquidPlanner's new dashboard features
  • The new Adobe Document Cloud
  • Unify Circuit's new (and upcoming) integrations
  • IBM and Twitter partnering for new insights in IBM BlueMix and IBM Watson Analytics

 

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Sell more today then its Digital Business; survival is Smart Business

Sell more today then its Digital Business; survival is Smart Business

Many Enterprises see their adoption of Digital Business being driven by Sales and Marketing additions to their current products and activities. Sadly this is unlikely to be enough as many Industry sectors are becoming transformed markets adding a imperative time scale for individual Enterprises to reconsider their need to grasp Digital Business.

In the fifty plus years from 1955 to 2014 only 61 companies have remained in the Fortune 500 listing of the top companies, an astonishing 89% of them didn’t recognize how their business was being lost to external transformation.

Research report now available: The Foundational Elements for the Internet of Things (IoT)

But why suggest the current transformation is about Smart Business rather than Digital Business? Because there is a single factor that underpins the real transformation; ubiquitous connectivity leading to a massive increase in the information available to make smarter business decisions in a dynamic manner. When Buyers, Sellers, Partners, and any manner of value chains, become integrated around information then an industry sector is a transformed marketplace. The term Digital Business seems to have become linked to merely improving sales and marketing techniques in the current industry sector business model.

The forces driving the transformation may be subtly different, as is the timing, in different sectors, but the impact usually makes its self felt by a change in demand. The motor industry is an interesting and visible example starting with an amazing shift in one of the top competitive features of a car over a period of little more than three years.

In 2015 between twenty and thirty percent of customers for a new car place Internet connectivity in their first three factors they consider! That Internet connection changes the game, and the relationships between what a car is, and what a car can do. For the Manufacturers it introduces competing around software and services as much as the classic mechanical engineering.

It arguable that the starting point was manufacturers leading the way with online Digital Business for the sales and marketing models, the resulting understanding and comparisons buyers could make often exceeded the knowledge of showroom sales staff. Now smarter customers want a new level of connected cars so they can continue to be smarter customers when travelling in their cars. But of course that’s the most visible factor driving change, there are several primary factors driving a sector transformation;

1) Government Legislation

The EU requires all cars to be fitted with ‘eCall’ capability for automatic respond to a detected emergency involving the car from 2018. This feature alone ensures that all cars have to have an onboard operational SIM service, and are therefore ‘connected’ cars using onboard sensing for smart behavior management.

2) Car Buyers Requirements

A number of surveys have been carried out, all of which broadly agree that a significant shift towards onboard connectivity as a necessary sales feature is occurring in line with general smart phone connected use.

  • Telefonica survey of 5000 people; more than half said a connected capability would be a key part of their next car purchase requirements
  • McKinsey survey of 2000 people; 13% would rule out of their next purchase any car that didn’t have connected capability, whilst more than a quarter would prioritize connected capability above engine power and fuel consumption
  • BI Intelligence report; sales of connected cars are 45% higher than the equivalent models that do not offer a connected capability.

3) Product Design

In common with many other products the amount of compute power and software, has dramatically risen with the result that McKinsey reported many cars now had twenty times the power of the average home PC. This may be difficult to precisely verify given the number of variable factors, but its undeniable that manufacturers have become skilled software engineers. All this compute power has made cars themselves ‘smarter’ as clean fuel-efficient engines, hybrid engine management, assorted safety features are the norm. in a move recognizable from customization of other digital devices, driver controlled ‘soft’ settings for drive comfort or sports handling are the new competitive battleground. Ultimately the demands for increased safety move towards various forms of Driver Assistance and into the realm of driverless cars

The car of today increasingly relies on, and competes, through the use of computer technology to turn them into Digital Products. The cars of the next five years will use connected capabilities to transform a car from a closed mechanical environment into being part of a connected smart services market environment. For a car manufacturer the whole basis of their industry Sector has been transformed into a new and entirely different place with the competitive and revenue emphasis being increasingly changed.

It’s not only a battle amongst the current players, if it was then perhaps the speed of change and nature of the competition might take place at a different, and perhaps slower rate. New players have already emerged making both headlines to awake the interest of car buyers, as well as offering new views of how the next generation car, or motorcycles, will be smarter.

Tesler Motors not only confounded the market by launching a high performance expensive car as a starting point rather than selling a battery car as a budget conscious choice, it also changing the traditional industry model of dealerships with a sell direct approach. Tesla enjoys a relationship with its customers with frequent feature upgrades more akin to Apple than a car manufacturer.  At the same time your Tesler car integrates with the other digital aspects of your life such as interfacing with the drivers online diary to find a suitable date for a service.

Zero Motorcycles have followed a similar path with high performance machines being at the front of their product introductions and setting a brand image far from other electric ‘scooters’. Zero Motorcycles set new standards for managing relationships with their customers, personalizing everything from the pre purchase enquiry into ongoing ownership. Meanwhile rumors, and indeed R&D expenditure suggests that Google with its driverless Smart Car, or Apple will extend Apple CarPlay might move into the motor industry to complete its transformation into a Digital Product market place.

The first question today’s market leaders face as the car market transforms into a market based around connected Smart Services is how they transform their existing enterprises from competing in todays ‘hardware’ market to competing with new skills as a ‘software’ company. The second is how to take their share of the new revenues, even control the use of Apps in a manner more akin to the smart phone industry, or even as broker in transportation operations in emerging smart cities.

Is the Motor industry a unique case? Hardily given what has already happened as Mobile Phones were transformed to Smart Phones, as Smart Buildings become common to managing a buildings use of resources, as music moved from hardware, (CDs etc), formats to Smart personalized selections based on Services. The major shift in each case has been the same common feature of connectivity introducing a leveling and sharing of knowledge that changes what and how a product is defined, paid for, and consumed towards being a Smart choice.

In 2010 Mark Johnson identified in his book‘ Seizing the white space’ 19 new Digital Business models, or perhaps Smart Service models. The book accurately identified and predicted, as its sub title promised, ‘Business Model Innovation for Growth and Renewal’ at a time when the technologies of the Cloud, Mobility with Apps and Services were just starting to make an impact. Certainly in 2010 few would predict that just five years latter how customers choices when car buying would have changed so much!

With the benefit of hindsight it is interesting to recognize how many of the Enterprises named have been able to ride the transformation of their Industry sector to become global leaders. A position from which they have in turn further driven the speed of transformation to their advantage! Its also worth remembering that this was before the widespread adoption of the term Digital Business, these first wave Enterprises grasped the principle of ‘connected’ business via the Internet as the real innovation in capability.

As the term Digital Business has become associated with sales and marketing transformation, today it would be better to recognize that true Industry Sector transformation path arising from the 19 models occurs through the ‘connected’ integration of market places (buyers, sellers, partners, collaborators, etc) leads beyond this. Connected and integrated around information leads to a transformed market place aroiund ‘Smart Business’.

The message is simple, adding new ways to address your existing customers within your existing Business and Industry sector model is unlikely to be enough to ensure your enterprises long-term survival, let alone a prosperous future. A competitive strategy to out perform competitors in the existing Industry sector business model is no more than securing a short term tactical advantage. An advantage related to deploying a sales and marketing Digital Business initiative. True strategic change in the structure of your Industry sector and therefore your business undoubtedly lies ahead;

The future risk and the future rewards lie in the timing, and extent, which your industry sector will transform into a truly connected market place where buyers and sellers will compete around the speed in which they can turn pooled knowledge into intelligence supporting Smart Business actions.

If you are unconvinced that this will happen then take a look at the Carpe Diem blog of Mark J Perry in which he analyses the difference between the Fortune 500 companies on 1955 listing versus the companies listed in 2014. Only 61 companies stayed in the list and incredible 89% have failed in one way or another though what he refers to as ‘Creative Destruction’. Its pretty safe bet that these guys thought that their industry couldn’t transform too!

Research report now available: The Foundational Elements for the Internet of Things (IoT)

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Progress Report - Cloudera's is all in with Hadoop - off to verticals

Progress Report - Cloudera's is all in with Hadoop - off to verticals

We had the opportunity to attend the yearly Cloudera analyst meeting at the beautiful historic Mark Hopkins hotel in San Francisco. The vendor had a remarkable audience of almost 40 analysts attending, documenting the importance of Cloudera for the BigData market.
As usual, here are my top 3 takeaways of the event:
 
BigData has traction – As we also see in our interactions with enterprises, BigData is a key driver for new investment into next generation applications. CEOs intuitively approve BigData proofs of concepts, trials and projects, as the value proposition for insight applications it tangible: When you merge all the information from sources an enterprise paid many multiples more for than for a BigData project, there is a high likeliness that better insights will result from a merge of all of these data sources in BigData clusters. Cloudera sees a similar growth opportunity, enjoying a 150% growth rate. But with growth come the challenges, and Cloudera needs to grow in its go to market and partner ecosystem dimensions. Not easy to solve, but the management team had the right answers how to tackle these two growth areas in the years to come. To exemplify the scale of the problem, Cloudera on average ramps up two partners and hires two employees on a working day. But these are good problems to have for any software vendor, as it shows solid execution on the product side. When asking about Q&A, the vendor shared that the largest investment on the R&D side currently goes into the quality area certainly a good step and direction,. We see quality concerns and potentially resulting delivery issue as the biggest concerns from CIOs / CTOs around the country – once they have bought into the basic value proposition of BigData.
 
Cloudera CEO Tom Reilly talks Intel investment and partnership
More verticals – During the part of CEO Tom Reilly, he shared that after Cloudera created a CDH and a number of security improvements, it was now time to look at more vertical applications. And the focus industries for the near future are – no surprise – Financial Services and Telco, two of the industries known for larger IT budgets and spend. Cloudera will of course not send away any business of other customers, e.g. keep working with retailers, the government etc. – but there will be more attention and focus to these two industries. Reilly did not make specific announcements – but it is certainly good to see that Cloudera plans to create vertical value propositions for prospects and customers.
 
The gentleman who started it all... Doug Cutting 
Partners matter – We heard for many times that we are still in the early times of BigData. The main challenge for Cloudera is to ramp up partners, that leverage the Cloudera products. Cloudera’s sales strategy relies on partners to create value for enterprises, as Cloudera tries to close enterprise wide deals with the CIO / CTO. The next step then is to bring partners in, that leverage the existing Cloudera platform for their products. If partners cannot show / create value for a customer, the TCO of the overall Cloudera solution won’t be favorable, so Cloudera’s success stands and falls with the value proposition partner can bring to the table.
Brave 7 Cloudera Execs in Analyst Q&A

MyPOV

An insightful analyst summit by Cloudera, that I had to leave early unfortunately, so baring the one to ones that happened next day, it is clear that Cloudera has made a lot of progress and probably maneuvered itself into a leading position in the BigData space. The vendor has added significant functionality and has an ambitious product agenda for the next 18 months. The strategic question for the vendor is – will a leading position on the database side be enough to let Cloudera earn the fruits of its work, or does the vendor have to move in the PaaS and maybe analytical SaaS applications space. Right now that is a partnering opportunity, but we know that historically PaaS and SaaS vendors command multiples of the database vendors in share of wallet. The good news is, that the Cloudera executives are aware of the risk and know they need to keep an eye on the PaaS and analytical SaaS applications space. Or in other works: Enterprises use Cloudera to build next generation applications – the vendor needs to be close to the use cases and make sure it keeps a large enough piece of the overall enterprise spending. 
 
More posts on the BigData / OpenSource space:
 
  • News Analysis - Pivotal pivots to Open Source and Hortonworks - or: Open Source always wins - read here
  • Market Move - Oracle buys Datalogix - moves into DaaS - read here
  • News Analysis - SAP commits to CloudFoundry and OpenStack - Key Steps - but what is the direction? Read here
  • Event Report - MongoDB is a showcase for the power of Open Source in the enterprise - read here
  • Musings - A manifesto: What are 'true' analytics? Read here
  • Musings - The Era of the no-design Database - Read here
  • Musings - Time to ditch your datawarehouse .... - Read here
 
Find more coverage on the Constellation Research website here.
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The Google Advisory Council

The Google Advisory Council

In May 2014, the European Court of Justice (ECJ) ruled that under European law, people have the right to have certain information about them delisted from search engine results. The ECJ ruling was called the "Right to be Forgotten", despite it having little to do with forgetting (c'est la vie). Shortened as RTBF, it is also referred to more clinically as the "Right to be Delisted" (or simply as "Google Spain" because that was one of the parties in the court action). Within just a few months, the RTBF has triggered conferences, public debates, and a TEDx talk.

Google itself did two things very quickly in response to the RTBF ruling.  First, it mobilised a major team to process delisting requests. This is no mean feat -- over 200,000 requests have been received to date; see Google's transparency report. However it's not surprising they got going so quickly as they already have well-practiced processes for take-down notices for copyright and unlawful material.

Secondly, the company convened an Advisory Council of independent experts to formulate strategies for balancing the competing rights and interests bound up in RTBF. The Advisory Council delivered its report in January; it's available online here.

I declare I'm a strong supporter of RTBF. I've written about it here and here, and participated in an IEEE online seminar. I was impressed by the intellectual and eclectic make-up of the Council, which includes a past European Justice Minister, law professors, and a philosopher. And I do appreciate that the issues are highly complex. So I had high expectations of the Council's report.

Yet I found it quite barren.

Recap - the basics of RTBF

EU Justice Commissioner Martine Reicherts in a speech last August gave a clear explanation of the scope of the ECJ ruling, and acknowledged its nuances. Her speech should be required reading. Reicherts summed up the situation thus:

  • What did the Court actually say on the right to be forgotten? It said that individuals have the right to ask companies operating search engines to remove links with personal information about them - under certain conditions - when information is inaccurate, inadequate, irrelevant, outdated or excessive for the purposes of data processing. The Court explicitly ruled that the right to be forgotten is not absolute, but that it will always need to be balanced against other fundamental rights, such as the freedom of expression and the freedom of the media - which, by the way, are not absolute rights either.

High tension

Everyone concerned acknowledges there are tensions in the RTBF ruling. The Google Advisory Council Report mentions these tensions (in Section 3) but sadly spends no time critically exploring them. In truth, all privacy involves conflicting requirements, and to that extent, many features of RTBF have been seen before. At p5, the Report mentions that "the [RTBF] Ruling invokes a data subject's right to object to, and require cessation of, the processing of data about himself or herself" (emphasis added); the reader may conclude, as I have, that the computing of search results by a search engine is just another form of data processing.

One of the most important RTBF talking points is whether it's fair that Google is made to adjudicate delisting requests. I have some sympathies for Google here, and yet this is not an entirely novel situation in privacy. A standard feature of international principles-based privacy regimes is the right of individuals to have erroneous personal data corrected (this is, for example, OECD Privacy Principle No. 7 - Individual Participation, and Australian Privacy Principle No. 13 - Correction of Personal Information). And at the top of p5, the Council Report cites the right to have errors rectified. So it is standard practice that a data custodian must have means for processing access and correction requests. Privacy regimes expect there to be dispute resolution mechanisms too, operated by the company concerned. None of this is new. What seems to be new to some stakeholders is the idea that the results of a search engine is just another type of data processing.

A little rushed

The Council explains in the Introduction to the Report that it had to work "on an accelerated timeline, given the urgency with which Google had to begin complying with the Ruling once handed down". I am afraid that the Report shows signs of being a little rushed.

  • There are several spelling errors.
  • The contributions from non English speakers could have done with some editing.
  • Less trivially, many of the footnotes need editing; it's not always clear how a person's footnoted quote supports the text.
  • More importantly, the Advisory Council surely operated with Terms of Reference, yet there is no clear explanation of what those were. At the end of the introduction, we're told the group was "convened to advise on criteria that Google should use in striking a balance, such as what role the data subject plays in public life, or whether the information is outdated or no longer relevant. We also considered the best process and inputs to Google's decision making, including input from the original publishers of information at issue, as potentially important aspects of the balancing exercise." I'm surprised there is not a more complete and definitive description of the mission.
  • It's not actually clear what sort of search we're all talking about. It's not until p7 of the Report that the qualified phrase "name-based search" is first used. Are there other types of search for which the RTBF does not apply?
  • Above all, it's not clear that the Council has reached a proper conclusion. The Report makes a number of suggestions in passing, and there is a collection of "ideas" at the back for improving the adjudication process, but there is no cogent set of recommendations. That may be because the Council didn't actually reach consensus.

And that's one of the most surprising things about the whole exercise. Of the eight independent Council members, five of them wrote "dissenting opinions". The work of an expert advisory committee is not normally framed as a court-like determination, from which members might dissent. And even if it was, to have the majority of members "dissent" casts doubt on the completeness or even the constitution of the process. Is there anything definite to be dissented from?

Jimmy Wales, the Wikipedia founder and chair, was especially strident in his individual views at the back of the Report. He referred to "publishers whose works are being suppressed" (p27 of the Report), and railed against the report itself, calling its recommendation "deeply flawed due to the law itself being deeply flawed". Can he mean the entire Charter of Fundamental Rights of the EU and European Convention on Human Rights? Perhaps Wales is the sort of person that denies there are any nuances in privacy, because "suppressed" is an exaggeration if we accept that RTBF doesn't cause anything to be forgotten. In my view, it poisons the entire effort when unqualified insults are allowed to be hurled at the law. If Wales thinks so little of the foundation of both the ECJ ruling and the Advisory Council, he might have declined to take part.

A little hollow

Strangely, the Council's Report is altogether silent on the nature of search. It's such a huge part of their business that I have to think the strength of Google's objection to RTBF is energised by some threat it perceives to its famously secret algorithms.

The Google business was founded on its superior Page Rank search method, and the company has spent fantastic funds on R&D, allowing it to keep a competitive edge for a very long time. And the R&D continues. Curiously, just as everyone is debating RTBF, Google researchers published a paper about a new "knowledge based" approach to evaluating web pages. Surely if page ranking was less arbitrary and more transparent, a lot of the heat would come out of RTBF.

Of all the interests to balance in RTBF, Google's business objectives are actually a legitimate part of the mix. Google provides marvelous free services in exchange for data about its users which it converts into revenue, predominantly through advertising. It's a value exchange, and it need not be bad for privacy. A key component of privacy is transparency: people have a right to know what personal information about them is collected, and why. The RTBF analysis seems a little hollow without frank discussion of what everyone gets out of running a search engine.

Further reading

Digital Safety, Privacy & Cybersecurity Distillation Aftershots Security Zero Trust Chief Customer Officer Chief Information Officer Chief Information Security Officer Chief Privacy Officer