Supplier Report: 4/27/2018
IBM made national headlines again, not for their products or services, but for the methods they used to eliminate older workers. As the company’s transition to AI, blockchain, and cloud progresses – are they cutting too close to the bone?
Microsoft reported excellent earnings this week (35% net income increase) bolstered by their cloud efforts and LinkedIn acquisition.
Google is reportedly taking losses in their home device market, but they have managed to avoid public ire over their data collections methods. The company is rumored to be collecting more data than Facebook and yet they have avoided public backlash (but they are still dealing with the EU over their monopoly settlement).
Acquisitions
- LinkedIn among Microsoft’s fastest growing businesses as $26B investment begins to pay off
LinkedIn brought in more than $1.3 billion in revenue this quarter, up from $976 million in its first full quarter under the Microsoft umbrella. LinkedIn is still operating at a loss, mostly due to long-term costs associated with the acquisition, and that figure has declined every quarter since the deal closed.
LinkedIn is part of Microsoft’s Productivity and Business Processes segment, which reported just over $9 billion in revenue for the quarter. LinkedIn accounted for about 14 percent of that segment’s revenue.
Artificial Intelligence
- IBM Security launches open-source AI
The toolkit, called the Adversarial Robustness Toolbox, goes beyond the usual collection of attacks used to test an AI’s ability, Sridhar Muppidi, IBM Fellow, VP and CTO IBM Security told SC Media at RSA this week. The toolbox has been released on Github and is available for download.
“So far, most libraries that have attempted to test or harden AI systems have only offered collections of attacks. While useful, developers and researchers still need to apply the appropriate defenses to actually improve their systems,” he said.
The toolbox uses multiple attacks against an AI system and then the security team tasked with increasing the AI’s effectiveness can choose the most effective defense. The way it does is to try and trick an AI with intentionally modified external data. Muppidi said the data sent against the AI is made “fuzzy” causing the AI to misclassify the data.
https://www.scmagazine.com/ibm-security-launches-open-source-ai/article/760190/
- European Commission: “We Need to Invest €20 billion in AI”
“AI is transforming our world. It presents new challenges that Europe should meet. The Commission is playing its part: today, we are giving a boost to researchers so that they can develop the next generation of AI technologies and applications, and to companies, so that they can embrace and incorporate them,” he added.
Warning of a brain drain, the Commission said it will support business-education partnerships to attract and keep more AI talent in Europe, set up dedicated training schemes with financial support from the European Social Fund, and support digital skills, competencies in science, technology, engineering and mathematics (STEM), entrepreneurship and creativity.
https://www.cbronline.com/news/eu-multi-billion-ai-investment
Cloud
- Microsoft’s Cloud Has Business Booming Again
The company’s net income rose 35 percent from a year earlier, to $7.4 billion. Revenue rose 16 percent to $26.8 billion in the quarter, exceeding the Wall Street consensus forecast of nearly $25.8 billion.
Microsoft’s earnings per share increased 36 percent to 95 cents a share, well above the analysts’ average estimate of 85 cents a share, compiled by Thomson Reuters.
Since Satya Nadella became chief executive in 2014, the cloud portion of Microsoft’s revenue has soared from 3 percent to more than 21 percent this year, according to estimates by Credit Suisse.
https://www.nytimes.com/2018/04/26/technology/microsoft-cloud-quarterly-report.html
Security
- Who Has More of Your Personal Data Than Facebook? Try Google
Google also is the biggest enabler of data harvesting, through the world’s two billion active Android mobile devices. Because Google’s Android OS helps companies gather data on us, then Google is also partly to blame when troves of that data are later used improperly, says Woodrow Hartzog, a professor of law and computer science at Northeastern University.
A good example of this is the way Facebook has continuously harvested Android users’ call and text history. Facebook never got this level of access from Apple ’s iPhone, whose operating system is designed to permit less under-the-hood data collection. Android OS often allows apps to request rich data from users without accompanying warnings about how the data might be used.
- Advanced Hackers Infect X-Ray Machines In Healthcare Espionage
The hacker group, dubbed Orangeworm, is mainly targeting American healthcare organizations, though there are a number of victims worldwide, including in Asia and Europe. But rather than do anything destructive, Orangeworm is likely using leverage on those medical devices – designed to process and view images from X-Ray and MRI machines – to learn more about them as part of an ongoing corporate espionage operation, Symantec said.
“Due to the fact that the attacks attempted to keep infections active for long periods of time on these devices, it’s more likely the group are interested in learning how these devices operate. We have not collected any evidence to suggest the attackers have planned to perform any sabotage type activities at this time,” said Alan Neville, Symantec researcher.
- Cracking the Crypto War
That public and private key pair can be used to encrypt and decrypt a secret PIN that each user’s device automatically generates upon activation. Think of it as an extra password to unlock the device. This secret PIN is stored on the device, and it’s protected by encrypting it with the vendor’s public key. Once this is done, no one can decode it and use the PIN to unlock the phone except the vendor, using that highly protected private key.
So, say the FBI needs the contents of an iPhone. First the Feds have to actually get the device and the proper court authorization to access the information it contains—Ozzie’s system does not allow the authorities to remotely snatch information. With the phone in its possession, they could then access, through the lock screen, the encrypted PIN and send it to Apple. Armed with that information, Apple would send highly trusted employees into the vault where they could use the private key to unlock the PIN. Apple could then send that no-longer-secret PIN back to the government, who can use it to unlock the device.
Software/SaaS
- Google changes its messaging strategy again: Goodbye to Allo, double down on RCS
The company told The Verge that it is “pausing” work on Allo, which was only launched as recently as September 2016, in order to put its resources into the adoption RCS (Rich Communication Services), a messaging standard that has the potential to tie together SMS and other chat apps. RCS isn’t new, and Google has been pushing it for some time, but now the company is rebranding it as “Chat” and putting all its efforts into getting operators on board.
The new strategy will see almost the entire Allo team switch to Android Messages, according to The Verge.
https://techcrunch.com/2018/04/19/google-changes-its-messaging-strategy-again-goodbye-to-allo-double-down-on-rcs/
Chat is Google’s next big fix for Android’s messaging messGoogle’s plan this time around is much more complicated than just launching a new messaging app. To get it started, it has had to corral more than 50 carriers and nearly a dozen manufacturers into adopting a new standard. It had to ensure that Chat would work the same, everywhere, and that it would actually have a decent set of features. Oh, and all those companies are fierce competitors who distrust each other and Google.
It is as close to the hardest, most winding road that I can imagine for fixing the messaging mess on Android. It’s also probably one of the only roads Google had left to try.
- Amazon’s new blockchain service competes with similar products from Oracle and IBM
“Some of the people that I talk to see blockchains as the foundation of a new monetary system and a way to facilitate international payments. Others see blockchains as a distributed ledger and immutable data source that can be applied to logistics, supply chain, land registration, crowdfunding and other use cases,” he wrote. “Either way, it’s clear that there are a lot of intriguing possibilities and we are working to help our customers use this technology more effectively.
AWS Blockchain Templates give AWS users working on blockchain apps a faster way to set up Ethereum or Hyperledger Fabric networks. Its launch comes six months after Oracle unveiled its cloud service built on the open-source Hyperledger Fabric project during Oracle OpenWorld and about a year after IBM announced its own Hyperledger-based blockchain-as-a-service offering.
Datacenter/Hardware
- Why Facebook is following Apple and Google to build its own computer chips
“Big tech companies realize that silicon and hardware is a key to differentiated experiences and services,” said Patrick Moorhead, president and principal analyst at Moor Insights & Strategy. “It’s kind of ironic, but hardware is driving software right now. The biggest reason is the simplification of software design tools and the incredible competitiveness of foundries like GlobalFoundries and TSMC” that actually manufacture the chips.
- LG can’t meet Apple’s demand for iPhone OLED displays
The Wall Street Journal reports that efforts to get LG Display’s OLED screens into the iPhone production line have hit manufacturing issues. Apple is reportedly divided on whether LG will be able to succeed as the second source of OLED displays for the iPhone.
Analysts have been warning for months that Apple is in “urgent” need of finding another iPhone OLED supplier besides Samsung. Apple currently uses Samsung’s OLED displays for the company’s iPhone X model. The reliance on a single supplier means Samsung controls pricing on the displays that Apple is buying — and there’s no other alternative at the moment.
https://www.theverge.com/2018/4/20/17261008/apple-iphone-x-lg-display-oled-supply-rumors
This better explains why the company is looking to create their own screens moving forward. - Google is bleeding cash trying to take on Amazon in the smart home
Because Nest was rolled back into Google proper earlier this year, Alphabet recast its quarterly earnings figures for 2017 to account for the fact that Nest revenues and losses would be moved from the “Other Bets” section of Alphabet’s business to the standard Google revenue line item. Comparing the differences in quarterly revenues and operating income, we can see that Nest made about $726 million in revenue, yet it ultimately contributed a $621 million loss to the “Other Bets” section throughout the year. In other words, Google spent more than half a billion dollars last year to establish Nest in sectors like security cameras, alarm systems, and video doorbells.
Other
- IBM Could Go From Good To Great With This One Increasingly-Likely Change
Forbes’ Peter Cohan is one of those doubters. He said in response to the company’s first quarter earnings, “Can IBM turn this around and become a company that persistently beats analyst expectations for revenue and profit growth and raises its forecasts? I don’t think so. That’s because it lacks a sustainable competitive advantage.” The reason for the missing competitive advantage? Cohan goes on to say “The right CEO can make a big difference — just look at how well Microsoft has done thanks to the successful cultural change managed by Satya Nadella. Until IBM gets a new one, it will lack a sustainable competitive advantage.”
https://seekingalpha.com/article/4164267-ibm-go-good-great-one-increasingly-likely-change
- How IBM quietly pushed out 20,000 older workers
- Ajit Pai Is Intentionally Delaying His Net Neutrality Repeal and No One Knows Why
The most popular theory is that ISPs and the FCC wanted more time to garner support for their effort to pass a bogus net neutrality law. A law they promise will “solve” the net neutrality feud once and for all, but whose real intention is to pre-empt tougher state laws, and block the FCC’s 2015 rules from being restored in the wake of a possible court loss.
While it may seem like ISPs scored a major victory with last December’s vote at the FCC, that’s simply not the case. Given the FCC’s bizarre behavior during the repeal (ranging from ignoring comment fraud and identity theft during the public comment period to making up a DDOS attack), the repeal remains on some shaky legal ground courtesy of FCC ethical gaffes.
https://motherboard.vice.com/en_us/article/wj793y/ajit-pai-net-neutrality-repeal-not-official-yet
Photo by Ryan Loughlin on Unsplash
SourceCast: Episode 116: YouTube Edition
News You Can Use: 4/25/2018
- Big Tech May Be Monopolistic, But It’s Good for Consumers
In short, by the standards of consumer welfare — providing a variety of high-quality products, innovation, low prices — big tech is one of the best things to happen in the economy in decades.
A more subtle argument against big tech involves the future: Yes, many new and innovative products are given away free today. But what effect is big tech having on tomorrow’s prices and innovation?
This argument assumes that big tech is stifling the competition today that tomorrow would lead to innovation or lower prices. I’m not sold. It is certainly true that consumer welfare can be harmed by the absence of products that might have been created if a market had had more competition. But look at what is actually happening: Big tech firms plow revenue into research and development in order to continue creating new and better products. These companies are innovation powerhouses, and there are no signs that that will change.
https://www.bloomberg.com/view/articles/2018-03-20/google-and-amazon-antitrust-fears-are-misplaced
- Why My Open Office Feels … Walled Off
Open offices have been the trend in workplace design for a while now — as of 2014, some 70 percent of office layouts were open — and despite some backlash, they don’t seem to be going anywhere soon. Proponents tout the upsides: collaboration, flexibility, bottom-line savings, attracting millennial workers. But even the biggest fans know all of this comes with a loss of privacy. (New reality: booking a conference room to make a doctor’s appointment.) And though sharing is nothing new to us in 2018 — see: communal tables at restaurants; car rides with strangers — it can feel at odds with how increasingly individualistic and aesthetic-driven our culture has become. Sharing is about more than giving up your personal space — it’s about not being able to personalize your space, either. Designed-for-all means one-size-fits-all, so the shared spaces we exist in — like the offices we spend so much time in — become uniform. The modern office lives and dies by 50 shades of gray.
https://www.phillymag.com/articles/2018/03/17/open-office-personalization/
- How to detect baloney the Carl Sagan way
- Fired FBI director James Comey reveals how Apple and Google’s encryption efforts “drove me crazy”
When Apple and Google announced in 2014 that they would be moving their mobile devices to default encryption, by emphasizing that making them immune to judicial orders was good for society, “it drove me crazy,” he writes. He goes on to lament the lack of “true listening” between tech and law enforcement, saying that “the leaders of the tech companies don’t see the darkness the FBI sees,” such as terrorism and organized crime.
But Comey understood it was an unbelievably difficult issue and that public safety had to be balanced with privacy concerns. Towards the end of the Obama era, the administration developed a technical plan to show it was possible to build secure mobile devices and still allow access to law enforcement in certain cases. During one Situation Room discussion on the issue, Obama acknowledged, “You know, this is really hard.” Comey’s first reaction was “No kidding” but he also appreciated the former president’s humility.
- Amazon warehouse workers skip bathroom breaks to keep their jobs, says report
Workers who pick up products for delivery at a warehouse in Staffordshire, UK use bottles instead of the actual toilet, which is located too far away, Bloodworth reported. They are afraid of being disciplined for idling and losing their jobs as a result, he added. Bloodworth told The Sun in an interview that the warehouse resembled a prison or an airport, with high security scanners that check workers for banned items like hoodies, sunglasses, and phones, and other employees who pat down workers to check for stolen goods.
Bloodworth’s findings are in line with first-hand accounts collected in the survey by worker rights platform Organise, which reported that 74 percent of workers avoid using the toilet for fear of being warned they had missed their target numbers. Rising goals have also taken a toll on employees’ mental health, as 55 percent of them report having suffered depression since working at Amazon. Over 80 percent of workers said they would not apply for a job at Amazon again.
https://www.theverge.com/2018/4/16/17243026/amazon-warehouse-jobs-worker-conditions-bathroom-breaks
Photo by Alex Iby on Unsplash