Supplier Report: 6/1/2018
Amazon had good news this week as their AWS cloud hosting platform continues to dominate commercially and critically. The company took the top spot again in Gartner’s annual cloud quadrant report.
The company did have a bit of a PR problem this week with news that their Alexa home assistant accidentally recorded a couple’s private conversation and sent the recording to someone in their contact list.
The EU is putting the PR in GDPR (get it?) thanks to news that an Australian privacy group is filing GDPR privacy complaints based on Facebook and Google forcing users to adopt a “take it or leave it” approach regarding privacy options. There could be billions of dollars of fines (but I doubt that will happen… but it is the EU).
Acquisitions
No acquisition news this week…
Artificial Intelligence
- Eric Schmidt says Elon Musk is ‘exactly wrong’ about AI
“He doesn’t understand the benefits that this technology will provide to making every human being smarter,” Schmidt said. “The fact of the matter is that AI and machine learning are so fundamentally good for humanity.”
He acknowledged that there are risks around how the technology might be misused, but he said they’re outweighed by the benefits: “The example I would offer is, would you not invent the telephone because of the possible misuse of the telephone by evil people? No, you would build the telephone and you would try to find a way to police the misuse of the telephone.”
https://techcrunch.com/2018/05/25/eric-schmidt-musk-exactly-wrong/
Here’s why Elon Musk isn’t “exactly wrong” when it comes to A.I.This is not the first time that Schmidt has pushed back on people’s fears about A.I. and the inevitable rise of the machines. Google DeepMind researchers may disagree with their former boss, though. The AI research group suggested that bots may eventually learn to interfere with humans and suggested creating a “big red button” to turn off AI and prevent them from fighting back. So, while Musk may be “exactly wrong” about many things (particularly this week) despite what Schmidt says, even Google thinks he may not be “exactly wrong” about A.I.
https://www.fastcompany.com/40577884/heres-why-elon-musk-isnt-exactly-wrong-when-it-comes-to-a-i
- How a Pentagon Contract Became an Identity Crisis for Google
The polarized debate about Google and the military may leave out some nuances. Better analysis of drone imagery could reduce civilian casualties by improving operators’ ability to find and recognize terrorists. The Defense Department will hardly abandon its advance into artificial intelligence if Google bows out. And military experts say China and other developed countries are already investing heavily in A.I. for defense.
But skilled technologists who chose Google for its embrace of benign and altruistic goals are appalled that their employer could eventually be associated with more efficient ways to kill.
https://www.nytimes.com/2018/05/30/technology/google-project-maven-pentagon.html
Cloud
- Gartner drops 8 IaaS vendors off Magic Quadrant in favor of broader market players
Amazon Web Services once again came out on top of Gartner’s Infrastructure as a Service Magic Quadrant, cinching a spot in the top right of the leaders’ quadrant. Microsoft came in second, almost on par with Amazon in terms of “completeness of vision” but a little farther behind in “ability to execute,” while Google eked out of the visionary category and into the bottom of the leaders group for 2018.
Alibaba Cloud, Oracle and IBM rounded out the niche players category, scaling back from positions in the visionaries category last year.
- IBM Exec: We Have Ways to Stand Out in the Cloud Wars
IBM, Oracle (ORCL) and Alibaba (BABA) (tops in China) are now labeled as “Niche Players” rather than “Visionaries.” And eight other firms, including CenturyLink (CTL) , Rackspace and Dell EMC’s Virtustream unit, have been thrown out of Gartner’s report altogether.
IBM did, however, get some praise for its ability to migrate mainframe clients to its cloud, as well as its large global footprint. In a talk with TheStreet, Jason McGee, the CTO of IBM’s Cloud Platform unit, argued Big Blue’s strong support for hybrid clouds is a competitive strength, as are unique offerings in fields such as security, blockchain solutions and AI/machine learning (Watson). He also noted IBM’s cloud partnerships with the likes of Red Hat (RHT) , New Relic (NEWR) and Box (BOX).
https://www.thestreet.com/investing/ibm-exec-we-have-ways-to-stand-out-in-the-cloud-wars-14604579
Security
- Google and Facebook are already accused of breaking GDPR laws
Both companies are engaging in “forced consent” according to privacy group noyb.eu. Forced consent is a “take it or leave it approach” where a company requires that users opt into data terms it sets or blocks them from accessing their service entirely
https://www.fastcompany.com/40577794/google-and-facebook-are-already-accused-of-breaking-gdpr-laws
GDPR: Google and Facebook face up to $9.3B in fines on first day of new privacy lawGoogle, Facebook, Instagram and WhatsApp have been hit with privacy complaints within hours of GDPR taking effect Friday — complaints that could carry fines of up to $9.3 billion in total.
- Google Emerges as Early Winner From Europe’s New Data Privacy Law
Since the law went into effect Friday, Google’s DoubleClick Bid Manager, or DBM, a major tool ad buyers use to purchase targeted online ads, has been directing some advertisers’ money toward Google’s own marketplace where digital-ad inventory can be bought and sold, and away from some smaller such ad exchanges and other vendors. That shift has hurt some smaller firms, where Google says it can’t verify whether people who see ads have given consent.
Google is applying a relatively strict interpretation of how and where the new law requires consent, both on its own platforms and those of other firms. The stringent interpretation helps Google avoid GDPR’s harsh penalties and pushes the company to buy more ad inventory from its own exchange, where it is sure to have user consent for targeted advertising.
- Amazon Alexa-Powered Device Recorded and Shared User’s Conversation Without Permission
Amazon said the Portland incident involved a series of such misunderstandings. It said the Echo woke “due to a word in background conversation sounding like ’Alexa.’ Then, the subsequent conversation was heard as a ’send message’ request. At which point, Alexa said out loud ’To whom?’ At which point, the background conversation was interpreted as a name in the customers contact list.” Amazon said Alexa then asked for confirmation and interpreted further background conversation as giving it.
Amazon also recently said it was adding a fix for Alexa-powered devices after users reported the machines started laughing for no reason. The company also attributed that to the software misunderstanding what it heard.
- AT&T and Verizon both want to run massive ad-tracking networks to rival Facebook
To sum that up, AT&T’s plan is to use the data it tracks and collects about customers on its networks — including location data and all the media they consume over those networks — to serve targeted ads for high prices against Time Warner content.
This is obviously quite upsetting from a privacy standpoint, but it’s actually a familiar strategy for a major carrier. When Verizon bought AOL and Yahoo and combined them into the tragically-named Oath in 2017, the company was explicit the goal was to use Verizon’s network data to better target ads on Oath’s millions of pages of content across Yahoo and AOL’s various zombie brands. Oath CEO Tim Armstrong spent years buying tons of mid-level ad-tech companies, and Verizon inserts “super cookies” across its entire network to track every site you visit along with the location of your phone. (I wrote about the Oath ad tracking nightmare in the past, if you would like to giggle at companies with names like Adapt.tv and Vidible.)
https://www.theverge.com/2018/5/30/17410942/att-verizon-facebook-ad-tracking
Software/SaaS
- Don’t read this, Oracle… It’s the rise of the open-source data strategies
While databases like MySQL, PostgreSQL, MongoDB, and Apache Cassandra have long scored points with web developers, historically they didn’t compete on Oracle’s core database turf.
But that was then, this is now. According to recent Gartner analysis, open-source databases now constitute 7.6 per cent ($2.6bn) of the global database market, worth $34bn. If that doesn’t seem like much, consider that over the past two years the open source DBMS market averaged 75 per cent growth, compared to a more tepid 7.7 per cent growth in the total market.
Where is that growth coming from? In part, it reflects developers’ desires to run new applications with modern databases. Those decisions have been made much easier by AWS, in particular, which has taken many of the most popular open source databases and turned them into services, removing the complexity of managing them. As such, according to DB-Engines, which ranks database popularity across a number of factors, half of the world’s most popular databases are now open source.
https://www.theregister.co.uk/2018/05/31/rise_of_the_open_source_data_strategies/
Other
- IBM’s Watson Health wing left looking poorly after ‘massive’ layoffs
IBM has laid off approximately 50 and 70 per cent of staff this week in its Watson Health division, according to inside sources.
The axe, we’re told, is largely falling on IBMers within companies the IT goliath has taken over in the past few years to augment Watson’s credentials in the health industry. These include medical data biz Truven, which was acquired in 2016 for $2.6bn, medical imaging firm Merge, bought in 2015 for $1bn, and healthcare management business Phytel, also snapped up in 2015.
Yesterday and today, staff were let go at IBM’s offices in Dallas, Texas, as well as in Ann Arbor, Michigan, Cleveland, Ohio, and Denver, Colorado, in the US, and elsewhere, it is claimed. A spokesperson for Big Blue was not available for comment.
https://www.theregister.co.uk/2018/05/25/ibms_watson_layoffs/
- Microsoft surpasses Google’s Alphabet to become 3rd most valuable company
At the end of trading, Microsoft’s market value was $760 billion, holding off Alphabet, whose market value was $746 billion. Only Apple and Amazon.com are worth more, at $922 billion and $788 billion, respectively. The ballooning valuations have fueled speculation as to which U.S. tech company will be the first to reach a $1 trillion-market cap. (Amazon chief executive Jeffrey P. Bezos owns The Washington Post.)
Photo by Kelly Jean on Unsplash
SourceCast: Episode 119: YouTube Edition
SourceCast: Episode 119: Joey vs. The GDPR
Supplier Report: 5/4/2018
Amazon announced job expansions in the cities of Boston and Vancouver. This expansion is fueled by the company’s explosive cloud growth (and the riches gained from the ever-increasing Amazon Prime subscription fees). AWS and Prime profits are also covering Amazon’s losses in the retail space, which makes it much harder for their competition.
Fans of WhatsApp should pay attention to the data Facebook is collecting from the app, but alternatives like Signal are running into issues in their attempts to protect user data.
T-Mobile and Sprint finally made the move to merge. Assuming they get government approval, they will be in a better position to claim 5G bandwidth. Cisco, Oracle, and IBM also made acquisition announcements this week.
Acquisitions
- T-Mobile and Sprint said to be close to a $26 billion merger
The two companies have been rumored to merge since 2014, when Sprint attempted to buy T-Mobile. Talks resumed again last year, before ending last November when T-Mobile and Sprint couldn’t find mutual ground. Earlier in April, though, The Wall Street Journal reported that the two companies were once again back at the negotiating table for the third time in four years, and if CNBC’s sources are correct, it seems that this time, the merger might finally be happening.
The difference this time is said to be a change of heart in Masayoshi Son, the CEO of SoftBank (which owns Sprint), with factors like the lower corporate tax rate, costs of 5G deployment, and increased competition from cable providers helping tip the scales toward a merger, although it’s still possible that things could fall apart again.
https://www.theverge.com/2018/4/27/17293246/tmobile-sprint-merger-26-billion-telecom-deal-cell-carriers
Sprint and T-Mobile have announced that they will mergeThe combined company will be based in Bellevue Washington and will be called T-Mobile. Current T-Mobile CEO John Legere will run the combined company, while T-Mobile COO Mike Sievert will become the new company’s COO and President. T-Mobile’s majority owner Deutsche Telekom will hold a 42 percent stake in the company, while Sprint majority owner SoftBank will hold 27 percent, with public stakeholders holding the rest. Sprint CEO Marcelo Claure and SoftBank CEO Masayoshi Son will sit on the combined company’s board.
The companies say that by combining, they’ll be able to lower prices and take advantage of “greater economies of scale”. The two companies have trailed their larger rivals, AT&T and Verizon, and the merger between Sprint and T-Mobile will help give them a boost as they begin to deploy their next-generation 5G network across the country. The combined company will have nearly 100 million customers.
https://www.theverge.com/2018/4/29/17298904/sprint-and-t-mobile-merger
- Cisco is acquiring business intelligence startup Accompany for $270M
Founder and CEO Amy Chang has compared the product to a digital chief of staff or personal assistant, giving executives the context they need before conversations and meetings. Cisco plans to incorporate Accompany technology into its collaboration products, for example by introducing company and individual profiles into Webex meetings.
Cisco says it will pay $270 million in cash and stock in the deal.
The company probably didn’t have to search too hard to find Accompany, since Chang (who previously served as the head of product for Google’s ad measurement and reporting) has been on Cisco’s board of directors since October 2016. As part of the transaction, she’s resigning from the board, effective immediately.
- Oracle Acquires Vocado
Oracle today announced that it has completed the acquisition of Vocado, which provides a leading student-centric, cloud-based financial aid solution for higher education institutions.
Vocado works with thousands of financial aid sources to optimize funding for any type of higher education learning model. The solution helps students identify eligibility and obtain financing so they can achieve their academic goals. Vocado integrates its financial aid solution with both cloud and on-premise Student Information Systems (SIS).
https://www.prnewswire.com/news-releases/oracle-buys-vocado-300639496.html
- IBM acquires New Jersey fintech Armanta
In a blog post, IBM said, “Over the past two years, Armanta and IBM have worked together to deliver financial risk solutions to clients globally. The combination of IBM’s and Armanta’s technology and expertise has allowed IBM to deliver new offerings that have already been adopted in the market. Armanta’s technology has not only enhanced our existing solutions, but also allowed IBM to rapidly develop new offerings for clients.”
The acquisition will help IBM clients integrate their risk management practices with other front and back-office funtions, while establishing a common set of data analytics and reports for consistency, according to the blog post.
https://www.wraltechwire.com/2018/05/03/ibm-acquires-new-jersey-fintech-armanta/
Artificial Intelligence
- Google’s Sergey Brin warns of the threat from AI in today’s ‘technology renaissance’
But, he says, AI poses a number of problems too, “from the fears of sci-fi style sentience to the more near-term questions such as validating the performance of self-driving cars.” Brin says Alphabet is giving “serious thought” to a number of these issues, including how AI will affect employment; the challenges of making unbiased and transparent algorithms; and the fears that this technology will be used to “manipulate people.” (This is most likely a reference to recent discussions of AI-generated fake news.)
Notably, though, Brin does not mention one controversial use of AI that is particularly relevant to Alphabet: military applications. Earlier this year, it was revealed that Google was helping the Pentagon deploy machine learning tools to analyze video surveillance footage from drones. The company has said the tech is for “non-offensive uses only,” but thousands of Google employees have demanded that the company withdraw from the project.
Cloud
- Amazon’s Profit Swells to $1.6 Billion, Lifted by Its Cloud Business
The company reported that its net income for the first quarter, which ended March 31, was $1.63 billion, or $3.27 per share, compared with net income of $724 million, or $1.48 per share, in the same period last year. Revenue jumped 43 percent to $51 billion, up from $35.7 billion a year earlier.
Also:
Revenue from A.W.S., meanwhile, rose 49 percent to $5.44 billion from the same period a year earlier.
That increase is larger that what the A.W.S. business was seeing just a few quarters ago. It is unusual to see revenue growth increase significantly at Amazon’s size and in a hypercompetitive market, and it seems to have prompted Mr. Bezos to single out the business in his statement.
https://www.nytimes.com/2018/04/26/technology/amazon-prime-profit.html
- Cramer: Don’t let the bears fool you—Microsoft and Intel just proved the cloud is here to stay
https://www.cnbc.com/video/2018/04/27/cramer-microsoft-and-intel-proved-the-cloud-is-here-to-stay.html
Did anyone say that the cloud wasn’t the technology of the future? I have to admit that I have a hard time watching Jim Cramer after this public beat down:
Security
- Google accused of using GDPR to impose unfair terms on publishers
One objection they have is that Google is apparently intending to switch its status from that of a data processor of publishers’ data — i.e. the data Google receives from publishers and collects from their sites — to a data controller which they claim will enable it to “make unilateral decisions about how a publisher’s data is used”.
Though for other Google services, such as its web analytics product, the company has faced the opposite accusation: i.e. that it’s claiming it’s merely a data processor — yet giving itself expansive rights to use the data that’s gathered, rather like a data controller…
The publishers also say Google wants them to obtain valid legal consent from users to the processing of their data on its behalf — yet isn’t providing them with information about its intended uses of people’s data, which they would need to know in order to obtain valid consent under GDPR.
https://techcrunch.com/2018/05/01/google-accused-of-using-gdpr-to-impose-unfair-terms-on-publishers/
- Amazon Bends the Knee to Autocrats, Threatens to Cut Off Signal for Using Anti-Censorship Technique
Amazon officially announced it’s increased focus on stamping out domain fronting on Friday. The statement followed closely behind a similar move by Google. On Monday, Signal founder Moxie Marlinspike posted a communication from Amazon’s team informing the privacy-focused company that it must discontinue any sort of domain fronting practices if it wants to continue using Amazon Web Services. Marlinspike lamented the crackdown, saying that Signal is being censored in Egypt, Oman, Qatar, and United Arab Emirates. The technique has allowed Signal to circumvent those blocks and continue to provide service to citizens of those countries, according to Marlinspike, but for now, it will have to comply with Amazon’s demands.
https://gizmodo.com/amazon-bends-the-knee-to-autocrats-threatens-to-cut-of-1825697153
Stop Using WhatsApp If You Care About Your PrivacyFacebook already harvests some data from WhatsApp. Without Koum at the helm, it’s possible that could increase—a move that wouldn’t be out of character for the social network, considering that the company’s entire business model hinges on targeted advertising around personal data.
If you care enough about your privacy to delete Facebook (or even change the way you use the social network) you may want to ditch WhatsApp as well. If you need a new, more secure messaging app try Signal, or even iMessage for communicating between Apple devices.
https://lifehacker.com/stop-using-whatsapp-if-you-care-about-your-privacy-1825719172
Software/SaaS
- Oracle CEO: We’re gaining material amounts of market share with back-office applications
https://www.cnbc.com/video/2018/05/01/oracle-ceo-were-gaining-material-amounts-of-market-share-with-back-office-applications.html
Datacenter/Hardware
- Foxconn Just Got Permission to Start Draining Lake Michigan to Make LCD Screens
Environmental experts have criticized the diversion. Though, as the DNR points out, it amounts to less than a 1 percent increase in the total surface water withdrawals from Lake Michigan, it would result in a loss of 2.7 million gallons per day, mostly due to evaporation (the rest of the water will be treated and then returned to the lake basin). Environmentalists are also concerned that the decision will set a new precedent allowing the fresh water to be used for predominantly commercial purposes, instead of as drinking water.
- Best & Worst Laptop Brands 2018
Lenovo takes first place again this year, on the strength of the company’s fantastic product lineup. From the beautiful ThinkPad X1 Carbon, which was the only product to get a perfect, 5-star review in the past year, to the versatile Yoga 920, Lenovo’s laptops earned the most Editors’ Choice awards of any brand. And a full 53 percent of the company’s laptops scored 4 or higher. However, Lenovo’s tech support scores declined from last year, and stiff competition from HP and Dell made this a nail-bitingly close race.
Other
- Amazon Is Losing Billions From Its Retail Business and Rivals Should Be Scared
The remaining segments are basically Prime, ads, and retail. The company does not separate out the segments from the services income on its 10-Q, but we know the general Prime numbers; 100 million prime members. This next step is an estimate. At that level, Prime brings in $10 billion in sales a year, or roughly $2.5 billion a quarter.
Using this estimate, the overall business, without AWS and Prime, lost about $2 billion last quarter. Although advertising is included here, too, this loss is almost all from the retail side of the business.
https://www.thestreet.com/opinion/amazon-is-losing-money-from-retail-operations-14571703
- Amazon Expands Tech Hub in Boston
Amazon will create 2,000 jobs in Boston in the fields of machine learning, speech science, cloud computing, and robotics engineering as it gets ready to expand its Tech Hub in the city, one of over a dozen such hubs nationwide.
Amazon said it has invested over $400 million in the Commonwealth since 2011, from customer fulfillment infrastructure to research facilities. It’s interesting to note that on its Boston job site, Amazon calls it the “Athens of America.”
https://www.ecommercebytes.com/2018/05/01/amazon-expands-tech-hub-in-boston/
- Amazon to add 3,000 tech jobs in Vancouver, Canada
Amazon said the additional jobs will be in e-commerce technology, cloud computing and machine learning. Currently, the company’s Vancouver workers produce new products and services for the company’s international retail business and Amazon Web Services.
“Amazon’s decision to bring another 3,000 jobs to Vancouver is great news for our city’s booming innovation economy,” Mayor Gregor Robertson said. “We are home to the fastest growing, most resilient and greenest economy in Canada and Amazon’s major expansion in our city means more long-term jobs for people who want to live, work and build a future in Vancouver.”
https://www.upi.com/Amazon-to-add-3000-tech-jobs-in-Vancouver-Canada/6691525136115/
Photo by Kelly Sikkema on Unsplash