The AI Platform – will it be the last?

I have been in the tech industry for over 25 years and have witnessed a lot of change in that time. I was early on as the PC era took off. Was on a plane and travelling across the US as the internet era began. Saw mobility revolutionize the way we interact with technology. Social Media become an outlet for finding friends and releasing political angst. Watched everything go digital. Seen the Cloud computing era begin.  All these changes that have transformed society and changed lives and livelihoods.  Changes that have created new market opportunities while generating enormous wealth.  During all this change one thing has been consistent.  We need a platform and we need developers to write applications for the platform.  No developer excitement, no platform excitement equals death.  It has been a constant throughout my journey.

Platforms may best be exemplified by Microsoft Windows.  During the PC era it was Bill Gates who identified the problem and said developers need a common platform to write to.   Prior to Windows we had something developers hate…fragmentation. We had Commodore 64, Tandy, Atari..each with it sown development platform, its own development tool kits, each with fragmented market share. Microsoft bought a simple OS for $50k, called DOS, and the rest history.  Things would change again when we witnessed the birth of the internet and suddenly everything needed to be web enabled.  If it was not enough, Steve Jobs had his grand moment when the iPhone launched and then riding his coattails Google launched Android.  Within a period of a few years every developer was targeting one of two mobile platforms: iOS and Android.  Since that summer of 2007 we have witnessed the birth of Social Networks, like Facebook and Twitter.  The rise of the Cloud has created enormous new opportunities as Amazon, Microsoft, and Google battle it out for dominance.  However the journey maybe coming to is final resolution, to a place that used to be fantasy now approaching reality. As we have built and grown and created enormous amounts of data the Artificial Intelligence platform has emerged as the next great opportunity, the holy grail.

The concept of AI is not new, it was first created at a conference at Dartmouth College in 1956, though we should give a nod to Alan Turing, perhaps the real father of AI.  the sixties and seventies there was a lot of great work done on AI, but something was missing: data.  Sure we had data at the time but not in the terms of gigabytes, terabytes. petabytes, or exabytes.  That would take time and technology.  In today’s world data is no longer an issue, we have lots of data,  The amount of IP traffic per month on the internet is measured in zettabytes (spell check does not even recognize this word).  After the AI winter of the early eighties AI has come back and no longer in fantasy, but in reality.  At some levels it is hard to grasp, after a childhood where AI was limited to science fiction novels and film and never depicted kindly.  I think of films like “2001: A Space Odyssey” or “Blade Runner”.  Of a supreme artificial being deciding the fate of mankind.  That dream or nightmare is coming ever closer to reality

Today all the major tech players are investing and investing heavily in AI.  Google CEO Sundar Pichai stated at Google I/O that “we are a AI first company”.  We have Amazon Echo, Google Home and the soon to be released Apple HomePod offering devices that will answer our questions, make musical suggestions.  How long before we start talking of these devices as if they were friends?  The autonomous vehicle is moving along faster than anticipated.  Local municipalities are starting to think of what changes they will need as our roads become transformed into advanced digital networks, taking driving decisions out of our human hands.  When we go online and go to web sites with support questions we will likely begin our journey with a bot,  We have robotic devices getting better each day in cleaning our homes as they gather information about every nook and cranny in a room.  AI is not a trend, but a technology here to stay.

In addition all the big tech players now provide a AI platform that developers will be able to write to and extend.  As the developer community grows the innovations will follow.  What makes AI incredible is it is built on data so as an example you could have a AI device collect information about a specific task and then feed that data back into a larger database, where an algorithm is running and thus improve the performance and results of the initial device.  In a very simple way it has become self learning.  Developer will create new scenarios to address and solve new problems.  We can see this in the Legal field with eDiscovery.  In Product Support services we have seen chat bots become the first line of support.  Though still a bit clunky and frustrating, overtime they will continue to improve and handle deeper and more complicated support issues

There will be other breakthroughs that will speed up the development of a “universal” AI platform.  My big bet will be on Quantum computing.  I will not get into a physics discussion, as I am the last person you want to do this, but the promise of quantum computing will be the death of the traditional silicon-based chip design, while exponentially improving on computational capabilities.  The best example is Shor’s algorithm.  On existing computes would take decades, but if the dream of Quantum Computing is realized could take minutes.  This will create risks as solving Shor’s would result in the breaking of RSA encryption, thus creating a whole new and potentially more lethal form of security risks.

The fear, and there always is a fear with technology disruption, is will we see the death of labor?  As AI improves the field of robotics will I need a maid service?  No more cab drivers.  No long haul truckers to move goods.  The question will become what will humans do?  Time will be freed up in a way it never has been before.  We are on the verge of experiencing a change in human capital that has never occurred before.  You may think than is not happening now but as things move changes will begin to happen much quicker than before.  We will move from years to months to weeks to days and quicker as time never stands still.  It will raise the question can the general population keep up? Could we have a situation like HAL in “2001: A Space Odyssey”, most say it is unlikely but the fact that it is a possibility makes it a bit unnerving.

All along these breakthroughs in AI will continue to improve the platform..on its own. At some point needing no human intervention.  No coders.  No Architects.  No Project or Product Managers.  It is self learning, self-correcting.  With each passing second it improves and becomes more efficient, more stable.  It will need no assistance.  It will move towards perfection in a way humans could never attempt.  There will be no more upgrades let alone someone trying to come up with a new OS.  When quantum computing emerges this self learning will accelerate even faster. In the future will AI need a corporate sponsor like Amazon, Google, or Microsoft or will it move beyond traditional financial structures and corporate domain to be its own entity?  At that moment there will be no AI 2.0 or 3.0.  It will be its own self-fulfilling cycle of improvement serving all or maybe just one: itself.

Good Night and Good Luck

Hans  Henrik Hoffmann July 5, 2017

 

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A Dying Free Media is a Death of an Ideal

I am a product of history, as my father was born in 1917 and served in the Danish resistance during World War II.  My mother was from Aalborg in the north of Denmark and lived her formative childhood years during the war.  I grew up listening to tales of the second world war and where Hitler went wrong. Of what life was like in an occupied country.  You made your own soap from lard.  School was 3-4 days a week.  There were always German soldiers on the streets.  It was in hindsight an interesting upbringing as I grew up in  an era where the backdrop was Vietnam and the human toll that the controversial war took on young lives. The role the media played in changing public opinion. You look back on these years from WW I to today and one thing is common is the role of media and how it shapes and influences war.  What perhaps is most frightening is how some groups utilize new media to influence and corrupt civilians in search of a false glory built on a misguided view of the future and how it is there to serve but a few, not the masses.

We often ask in WW II how did it happen that a country was seduced by Adolf Hitler, which led to more loss of lives ever in history?  It is a common question and one of the most researched and discussed topics in human history.  There were many reasons, many stemming from the Treaty of Versailles, following WW I.  However one of the driving factors in creating this mythical status of the Third Reich was a relatively new form of media: film. It would be easy to say film had been around for some time, but the pace of innovation was much slower in the early 20th century.  The Nazi’s early on used film to meet their purpose: propaganda. They had a well-educated man led the efforts, Joseph Goebbels (there was a sickness in his mind but that is another story).  Starting in the twenties and through their rise in the thirties the Nazi’s used film to frame their arguments of the German race as the superior race.  It would portray Jews as the scourge of German society and responsible for many of the economic issues of the day.  It culminated in 1935 with Leni Riefenstahl’s classic “Triumph of Wills” filmed in Nuremberg in 1934 during a Nazi Party Congress attended by 700,000 supporters.It is a classic not for its cinematic beauty or content, but how it was used to glorify the Nazi regime for an evil end purpose.  It was very effective.  It is often cited as one of the greatest propaganda films ever made.  It is hard to argue.

What followed is a cornerstone of the global history in the 20th century.  The loss of lives too many, atrocities like the Holocaust and Nanjing footnotes in history that still impact us to this day.  But it was that ability of the Nazi propaganda machine to spread fear to its own civilians that played a major role in setting the table.  It was still relatively new to a generation of people and not fully understood so it was accepted as truth.  Information traveled much slower in that era and in hindsight was more easily controlled. People were eager to consume and the Nazi’s were there to oblige, to fill a vacuum.  It seemed as if a whole country went temporarily insane, but it was all very carefully messaged and staged.

But this could never happen again?  I mean what possible form of media could be used in this fashion to seduce and manipulate?  Enter the social media revolution and evolution. Not a day goes by on Facebook or Twitter where I am left dumbfounded by the hatred in print I have to read and wonder who is telling the truth, where do these attitudes come from.  Whose source are goo?.  Who is politicizing social media for their own gains?  To beat their chest and say, “My views are holy, while your’s are a sin”.  Many do so in hiding. Choosing anonymous names, which is to say they are not accountable for what they say. That is the beauty of the internet.  I can say what I feel and not be accountable if it is right or wrong.

We now talk of fake news.  The idea of making up a news story to create an emotional response.  Our President calls it fake news when he does not agree with what is being said. How is this any different from what the Nazi’s did?  It is similar but it is very different.  In Nazi Germany information could be readily and easily centralized.  Joseph Goebbels was the end point who made the decisions.  Social Media acts in much the opposite way.  It is not a centralized systems but instead has thousands of end points.  Social Media enables these myriad of voices.  It creates a lot of noise.  It creates so much readily available information that it is not humanly possible to consume it.  At times it seems overwhelming and are heads are about to burst, sometimes with joy but often with anger. What does one do?  People gravitate towards sites they agree with and disdain those that they do not.  Fake news than enables some to increase the volume on whatever and whomever they want.  If you do not agree with someone you are an ignorant fool who is not well read on the subject.  You are belittled and your anger becomes toxic.

Our political system in the US has devolved into this system.  Every day I hear about the liberal media (usually on Fox News which I find ironic) or racist web sites like Breitbart harking back to a bygone era but appealing to many white males. Two extremes straddling the divide.  Everyone claiming they are the truth.  Asking us to follow them, how blind we have become.  We crave honesty, it’s a human desire but we are taught by mainstream and social media not to believe anyone.  Unfortunately in today’s society we all seem to suffer from some form of Attention Deficit Disorder. We are bombarded with media and really have little time to read much more than a headline. Thus the beauty of a 140 character Tweet.  At 140 characters it is not really constructive though but emotional outbursts, designed to create a response at a louder volume.

Part of America is going though an economic boom, my hometown of Seattle may be at the top of that boom.  With companies like Amazon, Microsoft, Expedia, Starbucks etc..Other major players like Google, Apple and Facebook expanding their presence in Seattle.  A robust startup economy.  I a city that seems to have it all and yet you do not have to go far to see the other America.  Go out to the coast and visit Aberdeen (birth place of Kurt Cobain) a former logging town and corridor to a strong fishing industry in the seventies, starting with the eighties it has witnessed a slow spiral down.  A dive into despair.  It is like many towns across the country who have experienced a slow death.  They are willing recipients of great change and do not need the media to tell them of their problems, they just want a solution.  Often that solution looks to the past of a strong manufacturing base.  A fondness of glorified memories.  It is dangerous to look to the past for the glory of the future.  It is a view that is mired in futility and will ultimately lead to defeat.

The latest revolt is a fake revolt, intentionally called fake news.  Used to seduce a public into believing only a few, only those that are approved.  Those that align with a certain moral compass.  Designed to make us distrust the mainstream media and turn us on each other.  To slander history and rape us of its learning.  To give into the worst of our emotions that then cause us to blindly lash out in an uncontrolled fury.  Part of this is the result of the “politically correct”, which caused us to repress some of the cancerous problems that still exist in America. Of economic inequality, an underlying racist view, anti-Semitism ironically married with a strong anti-muslim view, homophobic leanings and other views that all result from a lack of understanding, of caring.

Am I cynical about the present and the future?  I am probably a bit.  We stand at the cusp of radical social change, which will lead to a prosperous future for some. Technology is about to make leaps forward on multiple fronts from AI to Robotics to Quantum computing.  We will cure cancer and 3D print human tissues from your own DNA thus simplifying and improving a liver, heart or kidney transplant. However our self inflicted anger may delay and condemn our success.  As those tied to the future have made fortunes we have left the backbone of our nation behind,  small town America has been destroyed. There is no sense of community.  No white picket fences.  We have become a divided nation.  Separated by the success of the coasts and the desperation and desolation of the interior between Interstate 95 and Interstate 5.  We are angry, which historically leads to the warmth of dictatorships.  Having a strong media to provide an alternative voice is a strength of our republic.  It is important for our past and for our future. Ronald Reagan referred to as “a shining beacon of light on a hill, that will carry us through these dark times.  A light for the freedom of all and not just the few”.  He had immense respect for our institutions, are branches of government, of our free media.  If we fail now how will history remember us?

.

Good Night and Good Luck

Hans Henrik Hoffmann February 26, 2017

 

 

 

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“The New Tsar: The Rise and Reign of Vladimir Putin” – by Steven Lee Myers

It has been a while since I have reviewed a book on my blog but I felt the timing was good and the book was worth it.  It seems Russia has come back in our media and politics. Resurrected from its cold war hangover and reborn by one man, Vladimir Putin.  The book is well written and researched by Mr. Myers taking us from Putin’s childhood in St Petersburg, through his time as a KGB agent to his eventual rise to power..

What we learn about his early years is this was a young man who did not stand out.  He was not an academic genius.  He was a typical kid who showed no great ambitions.  Like many it was film that inspired him and the Soviet spy thrillers that influenced him to want to be a KGB foreign spy.  He would never get the job in the west having to settle for a posting in Dresden, East Germany, where the KGB kept check on the Stasi.  He would be there until the collapse of East Germany.

Following the collapse of the Soviet Union,like many at the time he was a drift. A life that seemed so structured was no longer.  That lack of structure was a very difficult issue for Putin. He would work for people in St Petersburg,  on local campaigns  and what you learn about Putin is he was loyal to whomever he worked for and he worked hard for those people he reported to.  Loyalty and structure would drive him moving forward and define his personality.

He eventually found himself in Moscow working in the Boris Yeltsin apparatus  Again he worked very hard until he started to get noticed by Yeltsin.  After many Prime Ministers came and went under Yeltsin, Putin was eventually offered the role. He was picked by Yeltsin to become President once Yeltsin stepped away, primarily for health reasons.  It is really amazing this unexpected rise, but all of a sudden a former KGB man is leader of Russia.

The biggest influence in Putin’s first term were two-fold: terrorism and Chechnya.  They went hand in hand and Putin did as he was trained he came down on those who threatened Russia with force.  During this early time as the crisis unfolded he also took steps to reign in the media and put them under state control.  The oligarchs who had made billions were also brought in line.  Those who did not fall in line were brought to trial and sent to Siberia (Yukos Oil).  The people who really made out during Putin’s first eight years were old fiends from Petersburg, KGB etc..Corruption was contained but it was also alive and well in Putin’s Russia

The biggest event that lead to Putin’s break with the west was the Orange Revolution in Ukraine in 2004.  After this point Vladimir Putin changed.  He became the man to resurrect Russia as a major player on the global stage.  The book covers his time where he stepped back for 4 years as Prime Minister, while Medvedev was his appointed President. During this time primarily managing the corrupt Sochi Olympics and being a power broker behind the scenes.

There is a lot covered in this book by Mr.Myers and I just touched on some, but why you would admire Vladimir Putin is a mystery to this reader and I think to Mr. Myers as well. As Angela Merkl told President Obama, “Putin is in his  own world”  The Russia Putin believes in is based on history, history of a great past that is pre-Soviet.  It is a fascinating account of what makes up a man who has created a cult of personality.  He will be a major player for some time, through the 2018 elections (there is no competition in Russian elections…as we learn they are not Democratic).  Read the book. It is a great read and will make you feel uneasy about the future.

Good Night and Good Luck

Hans Henrik Hoffmann December 28, 2016

 

 

Futureshock

No this is not a book review of the Alvin Toffler classic “FutureShock”, which I cannot claim to have read but maybe should take the time out to do so.  But maybe it should be altered to be “FutureNow”, as it is driven by the sheer speed of change we seem to have entered.  It seems we are entering a very uncertain time in our evolution as citizens of this planet.  We see in our politics a global shift to the hard right.  We see advances in technology designed to propel us into the future, while we look to old friends like our glutinous need for oil to build that future, maybe just political friends who see that future from our past.  But one thing is certain things are starting to move every fast and it will be interesting as humans if we are able to decipher the meaning of those changes.

We live in truly amazing times where things once only envisioned in science fiction literature and film are now being brought to the economic forefront as reality.  Robby Robot is no longer fantasy.  What we knew as Hal in “2001: A Apace Odyssey” is now called Alexa.  Roads once driven by humans are now being sold on future where they need not worry about human interaction with the road anymore.  Retailers want to sell you something before you even know you want it and then they disguise it as convenience.  All these things when I was a child seemed far off on the future, perhaps a future I would never see.  But the seeds of that future now seem to be sprouting all around us.

It seemed just a few years ago we began discussing driver less cars.  It was first a part of Google’s Project Moonshot,though many others were working on.  Eric Schmidt was very excited about it talking about the positive impact it will have on humanity.  And it will.  No drunk drivers.  In 2015 in the United States alone there were over 10,000 deaths due to drunk drivers.  Not to mention injuries and other traffic accidents.  Just think of road rage and the lessening of stress due to traffic congestion will be reduced because you will no longer be in control.  I can read a book and better utilize my time when I do not have to sit behind the wheel.  Will cars of the future have the same dimension of two seats in front and two in back? I can envision true cars of comfort.  I may even take a nap.  They may become true comforts of home with reclining chairs and flat screen TV’s.

It sounds thrilling but I do worry.  When this first came to light 2-3 years ago we were talking technology that is 20 yrs out, but good old competition has a way of changing things.  This week GM announced plans to start testing driver less vehicles in Michigan,  Google and Uber are already testing.  A company in Britain is testing self driving  cab service and wants it operational within 2 years.  We will start seeing this service in mass by the end of this decade.  In the US in 2012 there were 233,900 cab drivers.  You can see this extending to companies like UPS and FedEx.  Garbage men? Gone.  Delivery service s in general?  Check out Amazon drone delivery.  First one occurred last week. The jobs lost will be in the millions, it’s not hard data to find. There is no plan to help displaced workers, that is just not how government works.  In the US we are not too good about planning ahead for these type of changes, but better at thinking about it after the fact

Robots have been in science fiction since the beginning of films.  Originally crude and clumsy like Robby Robot but becoming more sophisticated with time.  Usually taking a human form as in “Blade Runner” of the more recent “Ex-Machina”.  Ultimately to be designed to be more human than human.  Luckily we are not quite ready for that yet, we look at Robotics more in tune with replacing human tasks.  For the Christmas Holidays CNBC showed an Amazon warehouse, not many humans in the picture, in fact I did not see any at all. All automated and run primarily by robots.  I hear politicians constantly shout at the TV “bring manufacturing jobs back to the US”, this is usually followed by some threat. They are either insanely naive or bald-faced liars.  Manufacturing jobs are coming back to the U S (there was even a recent article that stated this)  they just don’t need any people.

We actually talk about A.I. these days, it has finally progressed to a more commercial form. This was one that I truly thougt was years away.  But now all the big tech companies are talking about A.I.:   Amazon, Microsoft, IBM, Google, Facebook etc… We have venture’s like Paul Allen’s Allen Institute for Artificial Intelligence.  There is no lack of money being thrown into this field. We have devices now designed to assist us, Alexa and Cortana.  They are there to help answer our most pressing questions.  We need not know the answer but only the questions to ask.  The mere idea of A.I. is enabling a level of thought, the ability to have a level of reason and consequently be able to make decisions.  Decisions that will no longer need to be made by an actual human. For some that me be liberating, I find it a tad bit on the depressing side.  If you value self control this is a depressing development.  If you don’t have an issue with that loss, you are enetring glorious times.

Underlying all these things will be the Cloud Infrastructure and Big Data.  As the internet has grown the amount of data stored in the cloud The amount of data traffic surpassed 1 zettabyte per day in 2016.  The ability to consume, analyze and act upon that data will feed all the technologies mentioned above and as we get better we will just be able to move that much faster in how we think and act.  Every technology mentioned so far will have built-in sensory collectors and then be able to upload each and every activity done during the day.  All stored and analyzed.

If I strike a somewhat negative tone it’s because I do worry.  These ivy league economist are really good at what they do but one thing they seem to have no grasp of is the simple concept of time.  When these changes come there will be a lot of displaced workers and the ability of the economy to create new jobs to place them in will be strained and challenged. Driver less vehicles will displace millions in the US alone and we have not even touched aviation or trains.  As a society we will have to figure out what to do.  How will we support those who are removed from the work force?  How we measure unemployment in the US is a farce as we only measure by those collecting not those who have fallen off. The current rate,the current rate is 4.9% but real rate is 9.9%.  In the coming years I expect the real to grow faster than the official.  I have not even tackled retail checkers being displaced.

There will be positives.   There will be a day when law enforcement will have no guns and therefore no need to shoot anybody, think micro-drone tasers and tiny drone surveillance cameras.  Situations can be diffused from a control room and never have to endanger an officer or citizen/criminal. Work is being done to 3D print human organs so a kidney or liver transplant will be routine as they can be printed with your DNA.  Alternate energies will continue to progress and kill the oil industry while providing cleaner air for our children and grandchildren.  The question will it be in time?

The future has never looked more certain while our existence on this planet has never looked more uncertain.  The greatest challenge will not be technological change but the speed of change and how capable are we of adapting to that change.  As stated these changes will have exciting benefits but also perilous pitfalls.  If you are smart and invest in these technological shifts you will get ahead,at least financially.  If you relegate yourself to the sideline it will end up being a permanent placement.   Once the train leaves the station if you are not on, you will be a foorptint in history.

Good Night and Good Luck

Hans Henrik Hoffmann December 26, 2016

 

 

 

 

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The Internet of Things – what is it?

There has been a lot of “new” trends in computing of late as we move into hyper drive towards the future.  We have the cloud, which is no longer new as we have a lot of services making there way upstream to the cloud as we leave many traditional desktop services behind.  The mobile universe has matured as we all walk around in a daze glued to our little pocket computers, enjoying a bright sunny day that we feel but hardly notice.  We feed the web a constant barrage of data which in a short amount of time has become big data.  Once we have the data we struggle with finding a way to make that data useful and actionable, which has inspired a ton of analytics software, all displaying a stunning array graphical beauty.  On top of this we have artificial intelligence and robotics seemingly moving in tandem, each will in time collect even more data. But in my mind the one trend I find the most fascinating is the Internet of Thing, IoT for short.  I think in simple terms it means everything else not touched by tech is a repository of data just waiting to be mined, it touches not just the future but the legacy of where have been. But what exactly is it?

When I was with AT&T there was a lot of discussion around machine to machine learning, the idea of two devices communicating with one another and ultimately capturing data which in theory could be analyzed and acted upon.  You could place devices in a Boeing plane that monitors the cabins conditions and transmits that data to a airlines database in the cloud somewhere and that kind of starts us on the path to IoT, but I think it falls a bit short.  I actually prefer Daniel Burrus’ definition he articulated in Wired Magazine in 2014.  Rather than think of M2M we should really view it as sensory data.  Sensors are essentially dumbed down devices that will do only one thing and simply capture data and pass it on to a data repository somewhere.  In my view what the Linux OS does so well, strip it down and let it do just a few simple functions.   You can place these sensors on anything, anywhere, and anytime.

If you think about the world around you everywhere you look you are in actuality staring at data.  Your walls in your house contain data.  The roads that you drive on contain data.  The shower you bathe in contains data.  Your refrigerator, oven stove, etc..every appliance in your house has data just begging to be set free.  Over time these things change, sometimes for the worse. As devices come equipped with sensors there will be a lot of benefits.  As Daniel Burrus pointed out in his article, which was written not long after a bridge collapse in Minnesota, we will be able to put sensors into concrete and anticipate when a  structure may be stressed and a public danger. General Electric will call you before your fridge breaks down.  Your washer is nor working properly and Kenmore knows before you call.  These are all great scenarios and are not that far off in the future.

Bill Ford of Ford Motor company was speaking at a conference in Silicon Valley and said, “The car is no longer a car, it is  a platform”.  If you look under the hood of a new car there is a lot in that engine and is nit just pistons, pipes and filters.  A lot of electronics.  Not long after I read that statement I was visiting with an auto-insurance company in Oregon once and they were talking about the data they can capture from cars.  They wanted to in short to build a system of dynamic insurance, where driver behavior is monitored and rates go up or down depending on performance.  The big unanswered question before they could even contemplate such a measure was “Whose data is it”?  You can hear the scenarios unfold if the data is the insurance companies, both good and bad as your privacy is further invaded and eroded.  Driver-less vehicles may make this all a mute point depending on how quickly they arrive and are adopted

When I think of IoT i start to not think of Big Data, I think of really Big Data, perhaps even uber big.  In IoT has been articulated a lot of the data will sit never to be used.  I met with a AWS rep who was talking about a utility company that was having thermometers in homes send data every 5 minutes.  They were small files 3kb-5kb, but if you add this up into a day and then multiply by ten’s of thousands of customers those kb’s quickly become gb’s.  The data was being collected but at the time not being analyzed. The benefit though long term will be more efficient power usage in every home.  Our homes will be better managed, which for any home owner it is quickly realized that homes are your intro to property management.  This can  and will have a huge positive impact in the environment.  Cleaner air leads to healthier lives.

With all this grandeur there are issues.  If you think about the scenarios I have listed if you agree to these IoT scenarios keep in mind you have just invited a bunch of different companies into your home.  You can love or hate Edward Snowden, but your privacy is being invaded in these IoT scenarios.  You may fear government but how do you feel about private enterprise?  It is not just data but what is captured on video as well.  Products like Xbox have the ability to view how you interact with your television.  The camera on your computer?  With the future moving rapidly forward and yet coming closer to us everyday how do we weigh the benefits versus the negatives?  In the dead of winter if your refrigerator is about to die how much is it worth to know before it gives out and you and your family have to go out tot eat while you wait for the repair man to come?

The IoT revolution is underway and it promises a host of new scenarios which will add a lot of benefits to how we live, work and play.  It will come with its own set up of security and privacy issues, but as is typical in tech we tend to jump over the edge before we see how far the fall may be.  The opportunity, however, is too great for us to pass it up.  We will live in a different world because of IoT, it will be a world for the better.

Good Night and Good Luck

Hans Henrik Hoffmann Sept 19, 2016

 

 

 

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Microsoft – LinkedIn

You just never know what you will wake up to on a Monday morning in the world of high-tech.. So it was with a bit of surprise that I awoke to hear Microsoft was acquiring LinkedIn for $26.2 billion. Perhaps the top business social network on the planet. There has been growing speculation on Wall Street of increased Merger and Acquisition activity.  This will certainly kick-start things in a big way. This is no doubt a bold move by Microsoft that will either pay off handsomely or falter like so many acquisitions have in the past.  It raises a lot of questions but provides few answers.

Microsoft’s history of buying companies is not great, but at the same time not a complete disaster.  Some were high-profile, such as the attempted hostile takeover of Yahoo.  As big as the LinkedIn deal sounds, the offer for Yahoo was close to $45 billion. Thankfully for Microsoft shareholders Jerry Yang was an idiot and Yahoo rebuffed the offer.  Currently Verizon and AT&T are bidding for Yahoo’s assets, but it sounds like they are  coming in at under $6 billion.  So let’s make it clear and throw Jerry under the bus and when we are done make sure to back up and do it again. There have been other not so good deals for Microsoft like the $6 billion for aQuantive and as documented in my last blog the $7 billion for Nokia. Yammer for $1.2 billion was not great, it was ok technology but to add yet another social network to my life was just not in the cards.  On the good side the acquisition of Skype for $8.5 billion has worked out pretty well

When the Skype deal was done people were surprised but I think why that deal worked out was there was a lot of potential and a lot of synergies and growth opportunities. Microsoft had Office Communication Server which was targeting the business community while Skype was popular in the consumer space.  There was great opportunity to embrace and extend OCS and leverage the brand name of Skype.  In any acquisition you are looking for synergies that allow you to improve your existing product while allowing you to capture new revenue streams.  This will be the ultimate test for Microsoft’s acquisition if LinkedIn.  Skype was an example of something that on the surface could have gone horribly wrong and was harshly criticized at the time, but in actuality it has worked out very well for Microsoft.

Microsoft does bring some things to the table for LinkedIn, namely infrastructure.  There is a lot of capacity in the Microsoft data centers that span the globe.  This will allow LinkedIn in not to have to spend so much time building out or leasing data center space. Microsoft mentioned they will be able to leverage their own assets like Office 365 and Dynamics.  I know there is a plan or at least an idea here, I am just not sure what it is or what it will look like.  Could this be a channel play? Perhaps. The good news though is Microsoft is all about the cloud and LinkedIn lives in the cloud.  Finding new ways to promote and distribute your software is important

Another interesting aspect of the deal is that LinkedIn will operate as an autonomous entity.  It will not be subsumed into a Microsoft business or product division.  This will be somewhat new territory, but given Microsoft’s track record with previous mergers this should be a positive story. Having a Microsoft field background I think this will simplify the life of Microsoft field based reps as I am not sure how they would incorporate or up sell their customers, let alone be compensated for their efforts.  There is enough noise in the market place I am not sure more will be needed.

Some things I hope Microsoft can do is restore some of the dignity back to LinkedIn.  I know LinkedIn, being a public company, is always under pressure to show growth. However there is just an increasing amount of personal junk bring posted to LinkedIn that it is becoming too much like other social networks with a lot of noise that it is hard to get the value out of the platform that you need or desire.  I already suffer from an overly politicized Facebook account.  I am not sure Facebook is helping or harming my relationships.  I would like to keep LinkedIn professional.

At the end of the day $26.2 billion is a lot of money and Microsoft’s ability to recoup that investment will be what defines this acquisition as a perceived success or failure.  I am not fully on board yet with this acquisition, as I am not perceiving the direct impact to new revenues for existing Microsoft products and all wonder if the idea of LinkedIn as a separate entity is the right thing.  I am also on the fence as to whether Microsoft can properly execute this acquisition. It makes it look like Microsoft will act as a holding company or perhaps move to operate more like Alphabet (Google).  As usual following when it would like to be leading.

With all this being said it is a bold new world we live in and to succeed you need to be able to take risks, knowing than through failure will come success.  Microsoft may be out in front of something here and it will be interesting to see how and if its primary competitors react.  No one reacted when Google purchased YouTube, in fact most industry pundits criticized the deal, but it has paid off in spades.  As I wrote I am on the fence with this deal, but it is bold and that I cannot fault.  If in 5 years we are looking at $10 billion in annual revenues we will cheer, if not well we can just add to the list.

Good Night and Good Luck

Hans Henrik Hoffmann June 20, 2016

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The Wisdom of Shutting down Windows Phone

Well it seemed inevitable, maybe even late but Microsoft’s phone division went through another downturn,  announcing that it is all but exiting the smartphone business and taking a $950 million charge and laying off 1,850 employees, primarily in Finland.  In a way it seems like the end of a long miserable journey.  A journey that cost a lot to Microsoft financially as well as cost a lot of its industry reputation as a visionary company.  In many ways it caused Microsoft to age faster than it would have or should have.  As bad as this all may sound this could be a crucial and a positive step for Microsoft, causing it to search for new lucrative revenue streams rather than spend time and money trying to recapture something lost that will never come back again (I call this the Ronald Reagan syndrome).

A lot of time could be spent and has already been spent on what went wrong.  I, personally, having sat in the building with the Windows Phone team, am at the point where I feel I could write a book on the subject, but frankly what purpose would it serve? Possibly a historical one, but it would simply be repeating a lot of what has already been said and is known.  I am sure there are many college graduate courses that are covering the subject in detail.  We all took hear them in business school, lessons in business on what not to do. The simple fact is Microsoft blew it, but now it is time to move on. Microsoft is a very proud company, but sometimes it is better to just swallow your pride, and move in a new direction.

I can only conjure up what Satya Nadella and Terry Myerson and team could have been thinking, but depending on who you listen to and what stat you like, since Microsoft acquired Nokia for more than $7 billion, its market share has never been much more than 5%,  Over the past few years it has simply been declining.  The question had to be asked, “how much more are we willing to invest so we can increase market share?”How much do we need to invest to get to 10%?  How do you get emotional appeal like Apple?   How do we differentiate?  I can only guess the numbers involved in product and marketing investment would have been in the billions.  Then you also have to ask, “By the time we get there will the market have moved on to somewhere else?”  Again I can only guess,but the answer must have been, “Can we do better placing our bets elsewhere”?  the answer is simple, “Yes”.

The industry is lining up behind a lot of new initiatives and technologies.  First for Microsoft is the cloud, and Microsoft is competing here with Office365 and Azure.  Are there threats?  You bet, but Microsoft is competing against leaders like AWS and upstarts like Google Docs.  They are in the hunt and generating revenue.  Money should be spent here as it represents the future growth of the company.  The demise of Windows Phone will be an opportunity to double down on this strategic business at Microsoft.  It can place bets on new markets, existing profitable business and growing businesses within the company.  Microsoft is in the game and up near the forefront with Amazon.  They are already generating $20 billion in revenues, the only concern being what will happen to the other $74 billion?

We have a lot excitement in  the industry for new emerging markets such as the AI initiative that is still in the early stages of market development.  To me AI is a horizontal platform play.  Once you create something of industry interest it will be something that can be incorporated into a variety of technologies such as voice and driver less vehicles. Fundamentally the companies or companies that get this right will be able to entice developers to their AI platform.  Something that would greatly appeal to people at Microsoft, since they lost so much developer mind share in the mobile phone upheaval. Not to mention since it would be a horizontal product by nature in could span industries, such as financial, retail, telecommunications etc..This market is in the early stages of development with a lot of grand talk, but no proven market leader at this point in time. The key for Microsoft will be to be in the game when it starts to take off and not fall too far behind. If you are not in the game at the inflection point, all will be lost, as competition accelerates into the future.

Microsoft Satya Nadella has used the term Mobile First, Cloud First world to reignite the innovation pipeline at Microsoft.  On the latter he is doing just fine.  The former will be a challenge to redefine and it is having an impact in other areas.  The failure of Windows Phone means Microsoft currently has no play in Mobile search, Google is sitting pretty with over 90% share.  Could Bing meet a similar fate as Windows Phone?  Probably not as the learning from search will be value in products across the company.  We already see how Google has expanded with search across industries.  I do not see Microsoft catching Google anytime in the near future but the learning alone can lead to new ideas and applications.  In time this will extend to the Cloud First world where Microsoft is quite competitive versus Amazon Web Services.

There are certain technologies that extend themselves.  If you think of Google Maps, it’s a natural technology that has made its way into our cars, whether it be in our car or on a iPhone or Android Device.  The next step will be the driver less car, whose next big hurdle will not be a technical one, but the ones our lawmakers put in front of it. Can government more fast enough.  This emerging market is one that is moving fast but there is still a window of time for Microsoft to be the automotive platform of the future as well as look internally at technologies they own and see how they can be extended into new markets.  I think anywhere we use the term platform, is a natural one Microsoft should play in as it is part of the corporate DNA in Redmond.

As was pointed out at the beginning the death of the Windows Phone need not be something to lament very long.  Rather than waste valuable cycles on what is lost it is time to look at opportunities on where it can gain.  There is a lot of valuable and painful learning that came out of the Windows Phone, but that can be used to springboard the company to the future.  Microsoft will need to make big bets n Cloud, AI, Big Data, and IoT.  It needs to be not afraid to fail, but take those failures as valuable educational opportunities and apply to whatever the next big bet will be.  Where we are today as an industry is in large part due to the early work Microsoft did in the PC and then extending that into the enterprise.  It still spends billions on R&D.  It has the second largest cash n hand on the planet (next to Apple).  In short it has a lot of assets that play to its advantage.  The next five years will challenge Microsoft to define and execute on its big initiatives, but it will no longer have to look over its shoulders as to what is happening on the iPhone, it will only need to look forward.

Good Night and Good Luck

Hans Henrik Hoffmann June 7, 2016

 

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