Supplier Report: 4/6/2018
President Trump’s fight with Amazon continues to be the dominant technology story this week. Pundits on both sides are weighing in on the government’s options to go after Amazon. As Trump’s team devise a potential battle plan, the Department of Defense could give Jeff Bezos billions of dollars of new business (much to Oracle’s frustration).
Apple is making headlines this week for poaching Google’s head of AI to bolster their lagging division. The company also announced they will produce their own CPUs starting in 2020 causing Intel stock to drop 9%.
Facebook’s data security problems continue as Mark Zuckerberg is scheduled to testify in front of Congress on April 11th.
Acquisitions
- The Curious Case of the Belkin Buy
“I can’t put my finger on why, but this acquisition seems weird to me,” writes John Gruber, describing Foxconn’s decision to buy Belkin for $866 million. It is not that weird, especially when you take into account the competitive landscape.
TL: DR version: Foxconn needs to boost margins. Belkin has a great brand but faces an increasingly competitive landscape. It is weirdly about Taiwan vs. China.
https://om.co/2018/03/28/the-curious-case-of-the-belkin-buy/
Artificial Intelligence
- Retailers Race Against Amazon to Automate Stores
Companies are testing robots that help keep shelves stocked, as well as apps that let shoppers ring up items with a smartphone. High-tech systems like the one used by Amazon Go completely automate the checkout process. China, which has its own ambitious e-commerce companies, is emerging as an especially fertile place for these retail experiments.
If they succeed, these new technologies could add further uncertainty to the retail work force, which is already in flux because of the growth of online shopping. An analysis last year by the World Economic Forum said 30 to 50 percent of the world’s retail jobs could be at risk once technologies like automated checkout were fully embraced.
https://www.nytimes.com/2018/04/01/technology/retailer-stores-automation-amazon.html
- Emmanuel Macron Talks to WIRED About France’s AI Strategy
The key driver should not only be technological progress, but human progress. This is a huge issue. I do believe that Europe is a place where we are able to assert collective preferences and articulate them with universal values. I mean, Europe is the place where the DNA of democracy was shaped, and therefore I think Europe has to get to grips with what could become a big challenge for democracies.
And
We had some innovations that I saw several times in medicine to predict, via better analysis, the diseases you may have in the future and prevent them or better treat you. A few years ago, I went to CES. I was very impressed by some of these companies. I had with me some French companies, but I discovered US, Israeli and other companies operating in the same field. Innovation that artificial intelligence brings into healthcare systems can totally change things: with new ways to treat people, to prevent various diseases, and a way—not to replace the doctors—but to reduce the potential risk.
https://www.wired.com/story/emmanuel-macron-talks-to-wired-about-frances-ai-strategy/
- AI Beats Human Lawyers At Their Own Game (Thanks JD!)
LawGeex pitted 20 experienced attorneys against a three-year-old algorithm trained to evaluate contracts. Spoiler alert: the computer won.
Lawyers and the AI, for instance, were penalized for missing an exemption relevant to the contract, or mistakenly identifying an exemption where it was irrelevant.
In the end, LawGeex’s neural network achieved an average 94 percent accuracy rate, compared to the lawyers’ average of 85 percent. And while it took humans anywhere from 51 minutes to more than 2.5 hours to complete all five NDAs, the AI engine finished in 26 seconds.
https://www.geek.com/tech/ai-beats-human-lawyers-at-their-own-game-1732154/
- Our Robot Overlords Might Be Delayed
Then there’s the question of reliability. Despite computer scientists’ best efforts, algorithms are prone to make spectacular errors — such as mistaking a law-abiding person for a criminal. Worse, it’s often impossible to understand what went wrong: With billions of parameters involved, even an algorithm’s creators often do not know how and why it works. The reliability of an aircraft engine can be predicted, because it’s made of many parts for which we can mostly guarantee performance. Not so with algorithms. This limits their use in situations — such as making financial trades or medical diagnoses — where errors can be disastrous and it’s important to understand the process by which decisions are made.
In other words, there’s nothing very deep about deep learning.
- Apple Hires Artificial-Intelligence Executive From Rival Google
Apple, which is famously secretive, has lagged its peers in publishing research in the field, and that has made it difficult for the company to recruit professors and Ph.D. students from university computer-science programs, say academics and students.
The company’s flagship AI product, Siri, also has fallen behind competitors such as Amazon.com ’s Alexa and Google Voice in the number of tasks it can perform and accuracy. The HomePod, a smart speaker released in February, put a spotlight on some of those shortcomings, according to reviewers.
Mr. Giannandrea, known to colleagues as “JG,” was well-regarded at Google where he was considered a skilled manager adept at leading the engineering team, a person familiar with his work said. He joined the company in 2010 and led efforts to incorporate AI into Google products such as Photos and its Inbox app. He was tapped in 2016 to run its search engine.
Cloud
- Oracle’s CEO Might Have Given Trump Another Reason to Slam Amazon
Oracle chief executive Safra Catz criticized the bidding process for a huge Pentagon cloud computing contract in a private dinner with President Donald Trump on Tuesday, complaining that it seemed designed for Amazon to win, according to people familiar with the matter.
Trump heard her out and said he wants the contract competition to be fair, but made no indication he’d interfere in the bidding, the people said. Oracle (ORCL, +1.38%), where Catz shares the CEO title with Mark Hurd, is competing with Amazon (AMZN, +3.09%) for the contract, a point she didn’t emphasize to Trump, the people said.
http://fortune.com/2018/04/05/safra-catz-donald-trump-oracle-amazon/
I predicted Safra was going to get more involved on SourceCast 113 - As Trump Bashes Amazon, the Government Increasingly Relies on It
The company doesn’t release specifics, but GBH Insights, a research firm, predicts that Amazon’s government business will grow to $2.8 billion in 2018 and $4.6 billion in 2019, up from less than $300 million in 2015. Other company analysts say those projections are optimistic, but not implausible.
An even bigger prize looms: Amazon is seeking a 10-year contract with the Department of Defense that could be worth $10 billion.
Security
- Facebook Says Cambridge Analytica Harvested Data of Up to 87 Million Users
Andy Stone, a spokesman for Facebook in Washington, said the 87 million figure was an estimate of the total number of users whose data could have been acquired by Cambridge Analytica. He said that the estimate was calculated by adding up all the friends of the people who had logged into the Facebook app from which Cambridge Analytica collected profile data.
“We wanted to put out the maximum number of people who could have been affected,” Mr. Zuckerberg told reporters.
It remains unclear exactly how many users had their personal information accessed by Cambridge Analytica. The firm said Wednesday that it had licensed data for no more than 30 million users of the social network.
https://www.nytimes.com/2018/04/04/technology/mark-zuckerberg-testify-congress.html
- Saks, Lord & Taylor Hit With Data Breach
So far, 125,000 cards that had been used at Saks or Lord & Taylor have been released for sale by the hackers, according to Gemini Advisory. Some were cards that were used by card owners as recently as last month in one of the affected stores, according to Dmitry Chorine, Gemini Advisory’s chief technology officer.
The group behind the hack is known as JokerStash Syndicate or Fin 7. It appears to have penetrated the retailers’ point of sale systems, Mr. Chorine said.
After previous breaches the JokerStash group has released credit-card data in smaller batches, to avoid flooding the market for illegally obtained payment credentials, Mr. Chorine said.
https://www.wsj.com/articles/saks-lord-taylor-hit-with-data-breach-1522598460?mg=prod/accounts-wsj
Software/SaaS
- Tech Thinks It Has a Fix for the Problems It Created: Blockchain
Most of the biggest internet companies make their money from collecting personal information and using it to sell targeted advertisements. This kind of massive data collection makes them vulnerable to hackers and outsiders who want to leverage the data — as was evident when Cambridge Analytica improperly gained access to 50 million Facebook profiles. And start-ups are using the blockchain in an attempt to pry control of all that data out of their hands.
Blockstack has built a way to record the basic details about your identity on a blockchain database and then use that identity to set up accounts with other online projects that are built on top of it.
The animating force behind the project is that users — rather than Blockstack or any other company — would end up in control of all the data they generate with any online service.
https://www.nytimes.com/2018/04/01/technology/blockchain-uses.html
- Mozilla’s radical open-source move helped rewrite rules of tech
When Mozilla was born, open-source software was a counterculture oddity that flew in the face of a software industry used to selling proprietary products. But today, it powers just about every tech company out there — Google, Facebook and yes, even that old open-source nemesis, Microsoft. Mozilla wasn’t the first open-source project, but it fanned the flames of a way of thinking that brought us ubiquitous social networks, mobile operating systems and thousands of apps.
“It was a Hail Mary pass,” said Chris DiBona, director of open source at Google. “But somebody caught the ball and ran with it.”
Now it’s the norm. Google releases five or six open-source projects every single day — more than 12,000 in total so far. It’s common enough that Google automated the process so no humans are needed to review the decision. It’s hard to overstate how profound a change that is for people who program for a living.
https://www.cnet.com/news/mozilla-open-source-firefox-move-helped-rewrite-tech-rules-anniversary/
- Oracle v. Google Proves Again Why Fair Use Is So Troublesome
This decision understandably has far-reaching ramifications for those in the software development field. Copying even a relatively small amount of code is now unlikely to be considered “too small” to be considered an infringement. Furthermore, the re-contextualization of code from one device format to another (such as desktop to mobile) is now less likely to be considered transformative use of that code and, as a result, ultimately less likely to be found to be a fair use.
Even outside the tech space, this decision serves as yet another example of the unpredictability of fair-use determinations and further evidence of why the doctrine of fair use is “the most troublesome in the whole law of copyright.” As courts at both the trial and appellate levels increasingly decide the issue of fair use as a matter of law – and significant questions of whether and when the issue can even be tried to a jury – it is becoming increasingly difficult to take comfort that one’s use of another’s copyrighted work will be considered “fair.”
https://www.jdsupra.com/legalnews/oracle-v-google-proves-again-why-fair-52496/
Datacenter/Hardware
- Apple Plans to Use Its Own Chips in Macs From 2020, Replacing Intel
Apple Inc. is planning to use its own chips in Mac computers beginning as early as 2020, replacing processors from Intel Corp., according to people familiar with the plans.
The initiative, code named Kalamata, is still in the early developmental stages, but comes as part of a larger strategy to make all of Apple’s devices — including Macs, iPhones, and iPads — work more similarly and seamlessly together, said the people, who asked not to be identified discussing private information. The project, which executives have approved, will likely result in a multi-step transition.
Other
- Will Amazon be your next bank and health insurance?
Yet whenever claims of monopolistic practices are levered against it, Amazon quickly points out that e-commerce represents less than 10% of brick-and-mortar sales. Furthermore, it claims that Walmart sales alone – over $500 billion in 2017 – are almost three times bigger than Amazon’s. Add to this the fact that prices are kept low at Amazon and you can dismiss any charge of Amazon abusing its dominant position.
These arguments miss the main point raised by Khan in her “Amazon Paradox” note: Amazon should not be persecuted for antitrust based on consumer welfare criteria or overall retail market share dominance. Rather, more modern antitrust laws should focus on the methods online platforms the size of Amazon can use to inhibit competition. These methods include predatory pricing based on real-time analysis of marketplace competitors and vertical integration of logistics. Thanks to Amazon’s highly complementary business models, it has created a physical and online infrastructure empire that is quickly becoming the only competitive way to satisfy the growing need of instant gratification by online shoppers. Lured by the lock-in mechanisms built into the “Prime” subscription services (which offers free next-day delivery and video streaming to subscribers), consumers cannot help but be ecstatic with this online shopping paradise. One quickly understands why Amazon Prime now captures 46% of online shoppers in the US and why the barriers to entry are becoming increasingly insurmountable to upstarts in this field.
https://www.econotimes.com/Will-Amazon-be-your-next-bank-and-health-insurance-1232163
- Why a Trump-Led Antitrust Case Against Amazon Is a Long Shot
If Mr. Trump did decide to pursue any new regulations, he would either have to push a law through a Republican Congress that is unlikely to be receptive to more regulation or involve the Justice Department and other regulators to bring a case before the courts, Mr. Melamed said.
“It’s a huge amount of work, with a very dubious pay off,” he adds.
A White House spokeswoman on Thursday said “the president has expressed his concerns with Amazon. We have no actions at this time.”
- Justice Department asks Supreme Court to moot Microsoft email case, citing new law
On March 23, Congress passed, and President Trump signed, the Cloud Act. The law states that a “provider of electronic communication service” shall comply with a court order for data “regardless of whether such communication, record or other information is located within or outside of the United States.”
Microsoft supported the legislation, which also provides a way to facilitate — through bilateral agreements — foreign law enforcement agencies’ access to data held inside the United States.
The Justice Department on Friday obtained a new search warrant requiring Microsoft to turn over the emails. “Microsoft no longer has any basis for suggesting that such a warrant is impermissibly extraterritorial,” Solicitor General Noel J. Francisco wrote in a motion to the Supreme Court. “There is thus no longer any live dispute between the parties, and the case is now moot.”
- Tesla is now worth less than Ford
Tesla’s stock price is falling and in doing so, has retreated on milestones it set last year. As of publication, the company’s value is less than Ford’s for the first time in a year. At current levels, Tesla’s market cap is $42.063 billion while Ford is trading at $43.588. It was a year ago tomorrow that Tesla overtook Ford’s market cap.
https://techcrunch.com/2018/04/02/tesla-is-now-worth-less-than-ford/
- Samsung surpasses IBM with most patents filed in US
Samsung Electronics has overtaken IBM as the holder of the most US patents as of the beginning of 2018, according to new data. The South Korean tech firm owned 75,596 US patents, outdoing the second best IBM by nearly 1.6 times.
“Even though IBM continually out-files other companies, its assets are also ageing; in addition, it is known for abandoning a number of its patents relatively early in their lifetimes.” “As (IBM’s) assets grow older, it will have to innovate more (or acquire more patent assets) to keep pace,” the report added.
Photo by Patrick Hendry on Unsplash
Supplier Report: 3/16/2018
Broadcom’s bid for Qualcomm has been shut down by the government citing fears over national security.
Amazon is hiring more developers for Alexa than Google is hiring for everything. As Team Bezos builds out more cloud services, there are rumors this week that Amazon is focusing on corporate training services.
IBM thinks Lotus Notes can make a comeback… is it wishful thinking or is there a real strategy?
Acquisitions
- Apple to Acquire Digital-Magazine-Subscription Service Texture
Apple Inc. said it will acquire Next Issue Media LLC and its digital-magazine-subscription service Texture, a product developed by top magazine companies that bundles together some 200 subscriptions into one monthly service.
The acquisition comes as Apple looks to beef up its services business, which includes music streaming and mobile payments.
Apple has set a goal of increasing total revenue from services to more than $40 billion by 2020. The company generated nearly $30 billion in services revenue in its fiscal year ended in September.
https://www.wsj.com/articles/apple-to-acquire-magazine-subscription-service-texture-1520875158
- Why Intel Is So Wary of a Broadcom-Qualcomm Merger
Since late last year, Intel has been exploring a bid for Broadcom to forestall that company’s $117 billion offer for Qualcomm in what would be the biggest-ever tech deal, people familiar with the matter told The Wall Street Journal in an article published Friday. Intel’s interest in derailing that deal reflects its worry that a combined Broadcom-Qualcomm, which would create the third-largest chip company by revenue after Intel and Samsung Electronics Co., would endanger its competitive position, the people said.
A merged Broadcom and Qualcomm would combine market-leading smartphone chips with a strong presence in data centers, two areas Intel has targeted for growth. And Qualcomm’s own proposed purchase of Dutch automotive chip specialist NXP Semiconductors NV would turbocharge such a merger in the automotive market, where Intel has placed one of its biggest bets.
https://www.wsj.com/articles/why-intel-is-so-wary-of-a-broadcom-qualcomm-merger-1520800808
Broadcom’s Bid for Qualcomm May Be Headed for Rejection, U.S. Panel WarnsA government panel reviewing Broadcom’s $117 billion bid for Qualcomm has warned that it may refer the potential deal to President Trump for rejection, further dimming the prospects for what would be the biggest-ever technology takeover in history.
In a letter to the two companies on Sunday, the panel, the Committee on Foreign Investment in the United States, said that it believed the offer by Broadcom posed national security concerns. Broadcom is currently headquartered in Singapore, but is in the process of relocating its legal base to the United States to allay those issues.
https://www.nytimes.com/2018/03/12/business/dealbook/cfius-broadcom-qualcomm-merger.html
Rejection of Qualcomm-Broadcom Deal Followed Monthslong StrategyQualcomm’s Jan. 29 filing to CFIUS helped trigger a chain of events that culminated in President Donald Trump’s decision Monday to block the deal. Broadcom on Wednesday said it had withdrawn its offer for Qualcomm, though it is proceeding with plans to change its domicile to the U.S. from Singapore.
Qualcomm’s appeal tapped into gathering concern among some congressional Republicans and the Trump administration about U.S. national security and competitiveness with China, especially in advanced technologies—sentiment that already was fueling an effort to expand the power of CFIUS. The company also got help from sympathetic senators and representatives who pressed the administration.
Artificial Intelligence
- Amazon Is Hiring More Developers For Alexa Than Google Is Hiring For Everything
Amazon is hiring 1,147 people for its Alexa business unit alone, says Citi Research in a new report. That’s more than Google is hiring for product and technical roles across the entire Alphabet conglomerate, including YouTube, Waymo, Google Fiber, and — of course — the main money maker in the Alphabet empire: the original Google.
“Key takeaways from the job openings at Alphabet include that the company’s pace of hiring relative to its current headcount (3%) is among the lowest in our coverage,” said Citi analysts Mark May and Caleb Siegel.
That could bode well for Google’s margins, Citi says.
It also could mean that innovation is slowing.
Cloud
- Amazon’s cloud is looking at building a corporate training service
The move suggests Amazon Web Services sees ready-to-use services, rather than raw computing and storage resources for roll-your-own application development, as vehicles for maintaining the rapid growth of its cloud and keeping its lead ahead of the likes of Google and Microsoft. With learning-management software, individuals can go through collections of content such as videos to gain skills, and managers can track progress.
Amazon already has online training programs for partners to train their employees on how to use AWS offerings. This would be a broader general-purpose service that companies could use to manage all kinds of corporate training and learning programs.
https://www.cnbc.com/2018/03/15/amazon-aws-exploring-learning-management-space.html
Security
- Microsoft expands software and microcode fixes for Meltdown and Spectre
Included as part of today’s Patch Tuesday rollout, Microsoft has expanded protections for the Meltdown vulnerability to x86 editions of Windows 7 and 8.1. That’s in addition to emergency fixes Microsoft first rolled out just after the exploits were disclosed. The company notes that it will continue to work on providing updates for additional supported versions of Windows.
In addition to expanding its software fixes, Microsoft says that it has also removed the antivirus compatibility check for security updates on Windows 10.
https://www.windowscentral.com/microsoft-expands-software-and-microcode-fixes-meltdown-and-spectre
Software/SaaS
- IBM thinks Notes and Domino can rise again
Since announcing that HCL would take over development of IBM’s collaborationware, the two companies have conducted a long listening tour that saw them stage 22 meatspace meetings and four online forums. The results of that consultation, which reached 2,000 people, plus lab work already conducted by IBM and HCL, were recently presented to the faithful.
The top line message imparted to users was that IBM and HCL think Notes can rise again: the companies have given themselves the “big hairy audacious goal” of having Notes seen as “… the application platform that business users tap to solve their collaboration intensive business problems – anyone, anywhere.”
Execs from the companies said the first step towards that goal will be version 10 of the platform, which will land sometime in 2018. Attendees at a webcast were told version 11 has already been planned.
https://www.theregister.co.uk/2018/03/13/ibm_hcl_notes_domino_10_roadmap/
- Amazon Chime to be charged per-use
A blog post penned by Amazon Web Services (AWS) chief evangelist Jeff Barr explains that following the initial 30-day free trial where users have access to all Amazon Chime features, users can still chat with each other and attend meetings at no cost. However, in order to use the scheduling and hosting features once the trial is over, users must be connected to an AWS account.
On days where users host meetings, they will be charged $3 per-day, capped at $15 per month, starting from April 1, 2018.
“Based on historical usage patterns, this will result in an overall price reduction for virtually all Amazon Chime customers,” the blog reads.
http://www.zdnet.com/article/amazon-chime-to-be-charged-on-a-per-use-basis/
Slack Needs to Worry About Microsoft TeamsIn a blog post on Monday, Microsoft provided an update on Teams to mark its one-year anniversary. Teams is now in use at 200,000 organizations in 181 markets, with big-name users including A.P. Moller-Maersk, Macy’s, and General Motors. That’s up from 125,000 organizations in September.
One reason Teams has taken off so quickly is that it’s included with various Office 365 plans. Office 365 Business Premium, which costs $12.50 per user per month, includes Teams along with the full Office suite and other services such as OneDrive, Exchange, and Skype for Business. Office 365 Business Essentials, which leaves out the Office suite, is priced at just $5 per user per month. Microsoft’s three Office 365 enterprise plans, which start at $8 per user per month, also include Teams.
Slack offers a free plan, with two other plans priced at $6.67 and $12.50 per month. For any business that already uses Microsoft Office 365, using Teams over Slack is a no-brainer, even with Slack being a more mature product. For businesses using alternative productivity software, like Google’s G Suite, Office 365 with Teams and Slack are both priced in the same ballpark.
https://www.fool.com/investing/2018/03/13/slack-needs-to-worry-about-microsoft-teams.aspx
Other
- Some hard truths about Twitter’s health crisis
Because Twitter’s content problems really boil down to Twitter failing to enforce the community standards it already has. Which in turn is a failure of leadership, as I have previously argued.
A good current example is that it has an ads policy that bans “misleading and deceptive” ads. Yet it continues to accept advertising money from unregulated entities pushing dubiously obscure crypto exchanges and flogging wildly risky token sales.
Twitter really doesn’t need to wait for a new metric to understand that the right thing to do here is to take crypto/ICO ads off its platform right now.
https://beta.techcrunch.com/2018/03/10/some-hard-truths-about-twitters-health-crisis/?ncid=rss
- Former Equifax executive charged with insider trading ahead of massive data breach
According to the SEC, Jun Ying, the CIO of an Equifax business unit and next in line to be the global CIO, received confidential information about the company’s breach before the news was public. Ying allegedly exercised his stock options and sold his shares, making close to $1 million and avoiding a $117,000 loss when the stock price tanked post-announcement.
The SEC said the US Attorney’s Office for the Northern District of Georgia is also filing criminal charges against Ying.
https://www.theverge.com/2018/3/14/17119538/equifax-insider-trading-data-breach-charges
- Why media companies are shifting their attention from Facebook to YouTube
While Facebook Watch hasn’t taken off as a revenue source for publishers and the social network has deprioritized publisher content, YouTube offers something of a safe harbor for publishers that want to get into the video business. For example, publishers can direct-sell into their video on YouTube, said Kai Hsing, svp of marketing and operations at Bustle, which recently rekindled its interest in YouTube. YouTube was the most lucrative platform for publishers after Facebook, according to a Digital Content Next report.
Publishers also recognize that people are going to YouTube specifically to watch videos. That’s a reason parenting publication Fatherly recently resurrected its YouTube channel. In January, Fatherly hired Adam Banicki, a former video producer at Vice, as its first vp of video. In February, it began uploading videos to its YouTube channel for the first time since June 2017.
https://digiday.com/media/media-companies-shifting-attention-facebook-youtube/
Photo: Michael Baldovinos
Supplier Report: 3/9/2018
Amazon had an outage this week taking down popular sites like Slack and Atlassian. This outage happened as AWS is in talks with the Pentagon on another cloud contract (in which they are the front-runners). As AWS gets bigger, should companies look at other options so they don’t go down with the Titanic?
Apple found their supply chain had more human rights violations that originally reported via an internal audit conducted by an independent 3rd party. The company is in the process of rolling out a formal process to manage these types of ongoing violations.
IBM has over 400 active blockchain projects with customers at the moment. As IBM shifts to newer business models and services, some of their older customers like the Canadian government, are having major implementation issues on traditional services.
Acquisitions
- WeWork acquires SEO and marketing company Conductor
There’s a lot that make WeWork and Conductor a natural fit. Seth and his team built Conductor to provide the insights, education, and resources their customers need to succeed — in other words, Conductor helps their customers do what they love, and do it better. Conductor has made it easier for us to reach potential WeWork members who are looking for workspace. It’s also helped us get the word out about the services and amenities that we offer to companies of all sizes.
https://beta.techcrunch.com/2018/03/06/wework-acquires-conductor/
- WTF is CFIUS?
The U.S. is a technology leader, and it has a robust set of economic warfare tools to protect its competitive advantages. One of those tools is CFIUS, or the Committee on Foreign Investment in the United States. You might have heard it in the news recently because of its potential impact on Broadcom’s mega offer to buy Qualcomm, or because Congress is considering strengthening its provisions to potentially regulate startup investments from foreign firms.
CFIUS is becoming a lot more important these days due to a single country: China. There are few economic stories more fundamental than the continued rise of China as a world superpower. From humble experiments with capitalism in the early 1980s to the behemoth it is today, China’s economic growth has been nothing short of extraordinary. Underpinning that growth has been a deep appetite for technology and scientific research, first learned through overseas universities, and now through indigenous development.
As China’s wealth has grown, so has its desire to own the most distinguished technology companies in the world, and that’s where CFIUS comes in. The United States’s latest National Security Strategy labels China a “strategic competitor.” As tensions flare, CFIUS will be at the heart of the battle for who will ultimately own the technology industry.
- Google is selling off Zagat
Seven years after picking up Zagat for $151 million, Google is selling off the perennial restaurant recommendation service. The New York Times is reporting this morning that the technology giant is selling off the company to The Infatuation, a review site founded nine years back by former music execs.
The company had been rumored to be courting a buyer since early this year. As Reuters noted at the time, Zagat has increasingly become less of a focus for Google, as the company began growing its database of restaurant recommendations organically. Zagat, meanwhile, has lost much of the shine it had when Google purchased it nearly a decade ago.
https://techcrunch.com/2018/03/05/google-is-selling-off-zagat/?ncid=rss
Cloud
- AWS outage: Datacentre power cut knocks ‘hundreds’ of internet services offline
The cloud services giant confirmed that its US-East-1 region suffered two separate power loss incidents over the course of two hours in one of the site’s network peering facilities, each one lasting about 10 minutes.
As a result, organisations that rely on that region to host their applications and workloads “may have experienced internet connectivity issues”, said AWS in a statement on its services status page.
“Our network is designed to be fully redundant with multiple independent peering facilities in every region,” the statement continued. “Some customers experienced elevated latency and packet loss while the network rerouted affected traffic to these unaffected network peering facilities.
“Some packet loss was also observed as we restored traffic to the affected network peering facility.”
http://www.computerweekly.com/news/252436193/AWS-outage-Datacentre-power-cut-knocks-out-hundreds-of-internet-services
And this is why corporate customers should at least think about alternatives to AWS, 67% of all cloud is on AWS. When a hacker or a outage occurs, there are much bigger impacts. - Cloud-Based Disaster Recovery: How To Avoid the ‘Gotchas’
Sync-and-share solutions are a great opportunity to examine one of the key problems of cloud computing: Namely, that expectations rarely match reality. IT practitioners have a pretty good idea of how sync-and-share solutions work. As a result, it rarely occurs to us to sit users down and have the talk with them about the cloud not being magic. Unfortunately, many users encounter cloud-based solutions with erroneous preconceptions, and this “knowledge” leads to errors.
One common belief is that sync-and-share solutions adequately protect users against ransomware. They don’t. Modern ransomware makes numerous changes to files over time, ultimately running out the number of versions of files kept by the sync-and-share solution. There’s even a little game of cat-and-mouse going on with some of them where the sync-and-share vendor tries to add some level of ransomware detection based on access patterns, and the ransomware evolves new access patterns.
https://virtualizationreview.com/articles/2018/03/06/cloud-dr-gotchas-to-avoid.aspx
- Microsoft to offer governments local version of Azure cloud service
The pairing of Azure Stack, Microsoft’s localized cloud product, and Azure Government, the government-tailored version of Microsoft’s cloud, comes as competition against Amazon.com Inc for major clients in the public sector ramps up.
The new offering, which will be made available in mid-2018, is designed to appeal to governments and agencies with needs for on-premise servers, such as in a military operation or in an embassy abroad, said Tom Keane, Microsoft Azure’s head of global infrastructure.
“Quite literally we’ve designed Azure Stack with the scenario of a submarine in mind,” Keane told Reuters.
- Amazon, Oracle, Microsoft jockey for Pentagon’s cloud business
Catz’s meeting with Deputy Secretary of Defense Patrick Shanahan, which was confirmed by a department spokesman, came as technology companies are raising concerns that the Pentagon is leaning toward choosing Amazon.com Inc’s cloud division as a single provider for a multi-year contract to modernise its technology infrastructure.
Having already won two other government cloud contacts, Amazon Web Services is widely perceived as the front-runner for the Defense Department’s cloud award, while companies including Oracle, Microsoft Corp, and International Business Machines Corp fight for a piece of that business.
Oracle has a vested interest in how the contract is awarded because it has long-term contracts with multiple government agencies that use its flagship database to store information on their own systems. As the agencies look to switch to cloud computing and eye market leader Amazon, these moves threaten Oracle’s traditional revenue sources. Oracle has tried to protect its database business by offering cloud services of its own, but has come late to that market.
Software/SaaS
- IBM told investors that it has over 400 blockchain clients — including Walmart, Visa, and Nestlé
At least 400 IBM customers are now running blockchain-based projects, according to the briefing. Among those customers are 63 that work together with certain themes: 25 companies in global trade, 14 companies in food tracking, and 14 companies in global payments. Some of IBM’s most recognizable blockchain clients include Nestlé, Visa, Walmart, and HSBC.
While blockchains continue to be widely associated with startups and crypto-millionaires, IBM’s client list shows that large enterprises are truly embracing the technology.
IBM and Walmart actually launched a joint food safety blockchain project globally last year, which enables the grocery chain to figure out where specific produce originated in a matter of seconds.
http://www.businessinsider.com/ibm-blockchain-enterprise-customers-walmart-visa-nestl-2018-3
Datacenter/Hardware
- Amazon will stop selling Nest smart home devices, escalating its war with Google
The stakes are huge. Both Amazon and Google are building out a new voice-powered operating system that can control everything in your life — from your lights to your garage door to the music and video you stream. Amazon’s acquisition of Ring will give it a nice boost on the hardware side as it continues to build out Alexa’s AI. Ring was already one of Nest’s biggest competitors. Now it has the nearly-limitless funding needed from Amazon to go after its Google-backed rival.
The rivalry between Amazon and Google extends beyond the smart home, though.
http://www.businessinsider.com/amazon-wont-sell-nest-products-from-google-2018-3
- Google’s new Bristlecone processor brings it one step closer to quantum supremacy
Today, Google said that it believes that Bristlecone, its latest quantum processor, will put it on a path to reach quantum supremacy in the future. The purpose of Bristlecone, Google says, it to provide its researchers with a testbed “for research into system error rates and scalability of our qubit technology, as well as applications in quantum simulation, optimization, and machine learning.”
One of the major issues that all quantum computers have to contend with is error rates. Quantum computers typically run at extremely low temperatures (we’re talking millikelvins here) and are shielded from the environment because today’s quantum bits are still highly unstable and any noise can lead to errors.
Because of this, the qubits in modern quantum processors (the quantum computing versions of traditional bits) aren’t really single qubits but often a combination of numerous bits to help account for potential errors. Another limited factor right now is that most of these systems can only preserve their state for under 100 microseconds.
Other
- Apple finds more serious supplier problems as its audits expand
Apple said in the report that the proportion of “low performers,” or suppliers scoring less than 59 points on its 100-point scale, fell to 1 percent in 2017 from 3 percent in 2016 and 14 percent in 2014. “High performers” with scores of more than 90 rose to a record high of 59 percent from 47 percent the year before.
Apple found 44 “core violations” of its labor rules in 2017, double the previous year. Those included three instances of employees forced to pay excessive fees for a job, a practice Apple banned in 2015.
In one case, over 700 foreign contract workers recruited from the Philippines were charged a total of $1 million to work for a supplier. Apple said it forced the supplier to repay the money.
- Why Amazon Is Immune To Almost Any Boycott
Amazon, however, is in a different position–one that’s great for Jeff Bezos and annoying for activists. “For all its problems,” says King, “[Amazon] has a pretty robust reputation.” He goes on, “a boycott against Amazon doesn’t really change in people’s minds what kind of company Amazon is.” Which is to say, Bezos’s behemoth website has remained a relative constant for all these years, strategically staying out of the public eye while amassing hundreds of millions of loyal users. People know what the company is, what it has been doing, and the services its offers.
What’s more, the boycotts levied against the retail giant aren’t about some deep-seated collusion with the forces of evil, but rather passive business dealings. The activist organization Sleeping Giants, for instance, has been lobbying for Amazon to stop advertising on Breitbart. Though the group has had success with other campaigns–it got over a thousand advertisers to pull advertising from both Breitbart and the Fox News’ The O’Reilly Factor–Amazon has yet to change its ways. Though it may ruffle some people’s feathers that the company advertises on a far-right website or allows a gun rights organization to distribute its TV content, that doesn’t reveal an internal clash of values. Amazon is just doing business–the same business it’s been doing for years. And since people are very unlikely to stop using Amazon, the company probably sees no reason to acquiesce.
https://www.fastcompany.com/40538592/how-amazon-is-immune-to-almost-any-boycott
- Canada’s IBM Payroll Plans Go Bust — Costing $1 Billion
“They should have known better,” Daviau told the publication, adding that IBM holds some of the blame because it also went forward with the payroll system’s launch.
“IBM got into a contract with the government that was very beneficial to IBM, which meant that the contract — despite non-delivery — could continue to be extended and IBM could continue to come back to the pot for money,” she said.
In a statement, IBM said it is “fulfilling its obligations on the Phoenix contract, and the software is functioning as intended.” It added that it “continues to work in partnership with the government’s efforts to resolve the project’s issues and remains committed to the project’s overall success.”
https://www.pymnts.com/news/b2b-payments/2018/ibm-canada-payroll/
- More ‘boomerang’ employees return to Microsoft as corporate culture shifts
Microsoft has always had “boomerang” employees, as have other tech companies in the highly competitive industry. During the few years before Nadella stepped into the role, about 12 percent of the company’s new hires in the U.S. each year had previous job stints at the company. But that number ticked up to 16 percent, or 621 boomerangs, between July 2014 and July 2015, starting a few months after Nadella took over as CEO.
For the recent Microsoft boomerangs, returning to Redmond feels like stepping into a company that has changed — albeit one where that still occurs slowly.
- Marriott Employee Roy Jones Hit ‘Like.’ Then China Got Mad
Craig Smith, head of Asia-Pacific for Marriott, said in a separate statement, “We made a few mistakes in China earlier this year that suggested some associates did not understand or take seriously enough the sovereignty and territorial integrity of China. Those incidents were mistakes and in no way representative of our views as a company.”
“Not only can’t you speak freely inside of China, but you can’t even speak freely outside of China—and that’s really bad,” said Xiao Qiang, a Chinese internet expert at the University of California at Berkeley.
Marriott was within its legal rights to fire Mr. Jones, legal experts say. But some say the severity of the penalty—termination, rather than a reprimand or suspension—highlights the increasingly unforgiving environment for those who offend Chinese sensibilities.
https://www.wsj.com/articles/marriott-employee-roy-jones-hit-like-then-china-got-mad-1520094910
Photo: Kirstyn Paynter
Supplier Report: 3/2/2018
Facebook and Twitter are fighting for the hearts and minds of social media users. As Facebook struggles with “fake news” and changes their algorithms (hurting some legitimate sites in the process), Twitter is using this moment to embrace the press… but will anything improve?
Amazon has purchased another home camera company. It was announced they purchased Ring (a video doorbell maker) after purchasing Blink in December. Amazon really wants to find away to make customers comfortable with letting them into their homes…
On the Amazon topic, they are in a race with Apple to become the first company to be worth a trillion dollars…
Acquisitions
- Amazon Acquires Ring, Maker of Video Doorbells
Amazon.com Inc. acquired Ring, maker of video doorbells, in a deal valued at more than $1 billion, a person familiar with the transaction said, giving the online giant a bigger foothold in the burgeoning internet business of home security.
https://www.wsj.com/articles/amazon-acquires-ring-maker-of-video-doorbells-1519768639
- Nokia acquires Unium, a mesh WiFi startup that works with Google Fiber, as part of big home WiFi push
While Nokia’s former handset business forges ahead with its new device strategy under licensee HMD, Nokia itself has taken one more step to build out its business with carriers in a new wave of services. To coincide with MWC in Barcelona and a bigger step into the WiFi business, the company today announced that it has acquired Unium, a startup out of Seattle that builds technology for mesh WiFi for home networking services.
Unium’s tech is used to address one of the biggest pain-points in home WiFi today: it helps fill in dead spots in home WiFi arrangements, where you may not get signal or interference from other networks, and the accompanying security issues that might come alongside those.
Artificial Intelligence
- The Future of Policing Is Being Hashed Out in Secret (thanks JD)
It should go without saying that experimenting with predictive AI in real-world law enforcement demands public oversight and awareness. The debate that is now beginning should have been had before the technology was used to build indictments, not afterward. Nevertheless, it would also be a mistake if the only outrage is over the failure to make public disclosures. The more important conversation must address the deeper issues this case raises.
Law enforcement — and criminal justice more broadly — must be evaluated on two separate criteria: pragmatic effectiveness and legal justice. On the first criterion, it’s important to note that there isn’t yet any clear evidence that the Palantir-New Orleans partnership works. Palantir would like to take credit for a New Orleans crime dip, but the data and the timing don’t necessarily support that. For now, the efficacy of machine-based crime prediction and protection must be treated as unproven at best.
- Amazon vs. Google vs. Microsoft: Big tech firms gird for AI talent battle
As Quartz points points out, top AI talent is scarce “and companies are willing to pay millions to obtain new talent.” A case-in-point, Google paid more than $500 million in 2014 for UK-based AI startup DeepMind. And we’ll see millions more paid for AI startups, scientists and engineers as the talent war heats up.
Separately, Microsoft’s Cortana has a new boss. Javier Soltero, who formerly worked on Office will now be in charge of Cortana. He’ll report to Harry Shum, who’s the head of AI for the company.
https://martechtoday.com/amazon-vs-google-vs-microsoft-big-tech-firms-gird-ai-talent-battle-211894
They went with “gird” in the headline, I wonder if AI wrote it.
Cloud
- The Best Thing for Dropbox Was Breaking Up With the Cloud
Those paragraphs in the public offering document (page 67) summarize the difficult and nerdy work to shift a vast volume of Dropbox users’ digital files from Amazon’s computer networks to Dropbox’s own and to close dormant accounts to free up storage capacity. This yearslong shift to wean Dropbox off Amazon Web Services wasn’t glamorous work, but it improved Dropbox’s finances substantially. Without exaggeration, the shift away from cloud computing is one of the biggest reasons Dropbox is able to go public now.
- Nasty, new security threats are scaring .govs to the cloud
“I believe that the leadership within the government is ready for this change,” Wood said. AWS’ Commercial Cloud Services, or C2S, and Secret Commercial Cloud Service, or SC2S, are the “secret” and “top secret” clouds, respectively, Wood explained. The intelligence community — including its military components — have been working together to assess the security features of these clouds. The group of 38 assessors clearly see the benefits and are gaining confidence that the data is protected and are now closer to reciprocity than ever before.
A common vernacular for cybersecurity pros has hurt attempts to build expertise and strong security standards and systems in the past. The signing of the president’s executive order on cybersecurity is now mandating the adoption of the NIST Cybersecurity Framework.
- Apple may no longer be using Microsoft’s Azure
The updated Apple security guide now lists Amazon’s S3 and the Google Cloud Platform as where some encrypted “chunks” of files are stored. Apple’s iCloud stores users’ contacts, calendars, photos and documents, among other types of information. iCloud also is used by some third-party apps to store and sync documents and key values for app data, Apple’s security guide notes.
CRN reported in March 2016 that Google signed on Apple as a customer for the Google Cloud platform, citing “multiple sources with knowledge of the matter.” At that time, CRN also reported that Apple had “significantly reduced its reliance on Amazon Web Services,” though had not abandoned AWS entirely.
http://www.zdnet.com/article/apple-may-no-longer-be-using-microsofts-azure/
Interesting timing to reduce reliance on AWS as both companies race to be the first one trillion dollar company.
Security
- Equifax finds another 2.4 million people affected by its data breach
“This is not about newly discovered stolen data,” Paulino do Rego Barros, Jr., Equifax’s Interim CEO, said in a statement. “It’s about sifting through the previously identified stolen data, analyzing other information in our databases that was not taken by the attackers and making connections that enabled us to identify additional individuals.” Equifax said that because the attackers appeared to be focused on obtaining social security numbers, that’s what their investigation centered on during its initial phases. These additional 2.4 million individuals didn’t have their social security numbers stolen and were therefore not spotted earlier in the investigation.
https://www.engadget.com/2018/03/01/equifax-2-4-million-more-people-affected-data-breach/
- Apple to Start Putting Sensitive Encryption Keys in China
The keys are complex strings of random characters that can unlock the photos, notes and messages that users store in iCloud. Until now, Apple has stored the codes only in the U.S. for all global users, the company said, in keeping with its emphasis on customer privacy and security.
While Apple says it will ensure that the keys are protected in China, some privacy experts and former Apple security employees worry that moving the keys to China makes them more vulnerable to seizure by a government with a record of censorship and political suppression.
“Once the keys are there, they can’t necessarily pull out and take those keys because the server could be seized by the Chinese government,” said Matthew Green, a professor of cryptography at Johns Hopkins University. Ultimately, he says, “It means that Apple can’t say no.”
https://www.wsj.com/articles/apple-to-start-putting-sensitive-encryption-keys-in-china-1519497574
- GitHub survives massive DDoS attack relatively unscathed
GitHub, a web-based code distribution and version control service, survived a massive denial of service attack on Wednesday. According to a report at Wired, a staggering 1.35 terabits per second (Tbps) of traffic hit the site at once. Within 10 minutes the company called for help from a DDoS mitigation service similar to Google’s Project Shield, Akamai’s Prolexic, which took over to filter and weed out malicious traffic packets. The attack, says Wired, ended after eight minutes. This may have been the largest DDoS attack ever; Wired notes the attack on domain name server Dyn in late 2016 reached 1.2 Tbps of traffic.
https://www.engadget.com/2018/03/01/github-survives-massive-ddos-attack-relatively-unscathed/
Software/SaaS
- LittleThings blames its shutdown on Facebook algorithm change
Then Facebook made another big change to its algorithm, one that was supposed to prioritize content from friends and family over news publishers. Speiser said this cut LittleThings’ influencer and organic traffic (which was its most valuable traffic) by 75 percent.
“No previous algorithm update ever came close to this level of decimation,” he wrote. “The position it put us in was beyond dire. The businesses looking to acquire LittleThings got spooked and promptly exited the sale process, leaving us in jeopardy of our bank debt convenants and ultimately bringing an expedited end to our incredible story.”
https://techcrunch.com/2018/02/28/littlethings-shutdown/?ncid=rss
This is what happens when you base a business model completely on a platform you don’t own or control. - While Facebook spars with critics, Twitter goes for humility on social media
Twitter’s smaller size relative to Facebook also may help it repair its image because it’s not as dominant as Facebook. The media and marketing community is also eager for platform allies to counter Facebook and Google’s enormity, and Twitter has given the impression it wants to get out ahead of the trolls, bots and other abuses of its service. But as with Facebook, Twitter is vulnerable for having let the abuse problem continue as long as it has, and the PR goodwill will only last so long. It also has a chance to get out ahead of its role being spotlighted in probes of Russia’s meddling in the run-up to the U.S. presidential election in 2016.
To one publishing executive, Dorsey came off as “sincere, not defensive. But they have to actually do something. Talk is cheap. If they want to become a credible publishing entity, they need to take responsibility. And that means action.”
https://digiday.com/media/facebook-spars-critics-twitter-goes-humility-social-media/
Other
- Apple Is Going to Be the First Trillion-Dollar Company
Apple’s board of directors had most recently authorized a $210 billion share-repurchase program that is expected to be completed by March 2019, according to Apple investor relations. That was before the very corporate friendly 2017 tax reform bill was passed. I would expect that bill will encourage even more share repurchases. We should not be surprised to see a 10 or even 20 percent share count reduction over the next five years.
- IBM gives Services staff until 2019 to get agile
IBM has spent years telling the world that its Notes suite is as fine a collaboration environment as there is to be found anywhere, if only you’d give it a chance and appreciate its charms. But among the changes required to demonstrate agility is cessation of email use in favour of devops darling Slack. Staff are also expected to start using WebEx.
Come September 30, IBM wants its services staff to have hit level-three agility maturity, and to see “positive trending of agile metrics.” Come December 30, Big Blue wants “continuous improvement leading to client advocacy.”
https://www.theregister.co.uk/2018/02/26/ibm_gives_services_staff_until_2019_to_get_agile/
IBM report, “Who Says Elephants Can’t Dance?”“There’s been a feeling historically that the elephants can’t dance, the incumbents will find it hard to respond and that everyone will be Uber-ed or Airbnb-ed out of existence,” Mark Foster, senior vice president of IBM Global Business Services, told Reuters in an interview.
“But what we are seeing is, actually, there is a limit as to how far that can go.”
While some sectors had been hugely disrupted by new digital entrants and some intermediaries were pushed out, many of those changes were now being led by existing industry players, he said.
https://www.aljazeera.com/news/2018/02/ibm-report-elephants-dance-180225153412288.html
- How SoftBank, World’s Biggest Tech Investor, Throws Around Its Cash
They describe a man who sometimes makes gut-instinct decisions in businesses he knows little about—such as the time he spent about 30 minutes deciding he wanted to invest $200 million in a startup that grows vegetables indoors. Other times, he compiles an elaborate analysis, inundating his directors with hundreds of pages of documents to help explain an investment target.
To strike quickly, he sometimes commits to investments before getting approval from his fund’s investment committee, some of these people say. And he often spars with his executives and board members over his proposals until they are convinced or acquiesce.
Photo: Kevin Stoop