Big Data | Paul Wallbank - Communications Professional

Context and the digital divide

Paul Mabray, founder of US online monitoring service Vintek, sees a digital divide developing as businesses struggle with social media big data and Facebook.

“This is the most difficult time in history to be a wine maker, declares Paul Mabray, Chief Strategy Office and founder of Vintank.

“Never has the wine industry been as competitive as it is today.”

Update: The Wine Communicators of Australia, who sponsored Mabray’s visit, have posted Paul’s presentation that covers this post’s theme in more detail.

Mabray’s business monitors social media for wineries and collects information on wine enthusiasts. Since Vintank’s founding in 2008 the service has collected information on over thirteen million people and their tastes in wine.

Rewriting the rule book

Social media, or social Customer Relationship Management (sCRM), is what Mabray sees as being part of the future of the wine industry that’s evolving from a model developed in the 1970s which started to break down with the financial crisis of 2009.

“In the old days there was a playbook originating with Robert Mondavi in the 1970s which is create amazing wine, you get amazing reviews and you go find wholesalers who bring this wine to the market.”

“As a result of the global proliferation of brands the increase of awareness and consumption patterns where people like wine more, those playbooks didn’t work in 2009 when the crisis started.”

With the old marketing playbook not working, wineries had to find other methods to connect to their markets and social media has become one of the key channels.

Now the challenge in the wine industry, like all sectors, is dealing with the massive amount of data coming in though social media and other channels.

The cacophony of data

“If you rewind to when social media came out, everyone had these stream based things and the noise factor was so heavy,” says Mabray.

“For small businesses this creates an ‘analysis to paralysis’ where they’d rather not do anything.”

Mabray sees paralysis as a problem for all organisations, particularly for big brands who are being overwhelmed by data.

“The cacophony of data at a brand level is just too much,” he says.

“It’s as noisy as all get go and I think the transition is to break Big Data down into small bite size pieces for businesses to digest is the future, it shouldn’t be the businesses problem, it should be the software companies’.”

A growing digital divide

Mabray sees a divide developing between the producers who are embracing technology and those who aren’t, “the efficiencies attributed to technology are obvious whether they’re using CRM, business intelligence or other components.”

“The people who are doing this are recognising the growth and saying ‘hey, this stuff actually works! If I feed the horse it runs.”

While Mabray is focused on digital media and the wine industry, similar factors are work in other industries and technology sectors; whether it’s data collected by farm sensors to posts on Instagram or Facebook.

Facebook blues

Mabray is less than impressed with Facebook and sees businesses concentrating on the social media service as making a mistake.

“I think that every social media platform that’s been developed had such a strong emphasis on consumer to consumer interaction that they’ve left the business behind, despite thinking that business will pay the bills.”

“As a result almost every single business application that’s come from these social media companies has met with hiccups. That’s because it wasn’t part of the original plan.”

Facebook in particular is problematic in his view, “it’s like setting up a kiosk in the supermall of the world.”

The business anger towards Facebook’s recent changes is due to the effort companies have put into the platform, Mabray believes; “everyone’s angry about Facebook because we put so much into getting the data there.”

“We said ‘go meet us on Facebook’, we spent money collecting the items and manufacturing the content to attract people and now we have to spend money to get the attention of the people we attracted to the service in the first place.”

Despite the downsides of social media Mabray sees customer support as one of the key areas the services. “It’s easy to do in 140 characters.”

Context is king

“Everything come back to context. There’s this phrase that ‘content is king’,” Mabray says. “Context is king.”

“Anyone can produce content. It’s a bull market for free content. We have content pollution – there’s so much junk to wade through.

Mabray’s advice to business is to listen to the market: “Customers are in control more than they have ever been in human history: Google flattens the world and social media amplifies it.”

For wineries, like most other industries, the opportunity is to deal with that flat, amplified world.

Garbage In and Garbage Out

The success of using Big Data depends upon the quality of both the data and the algorithm

UK tech site The Register reports that Google Flu Trends has been dismal failure with the service over-reporting the incidence of influenza by a factor of nearly 12.

The reason for this problem is the algorithm used to determine the existence of a flue outbreak is that it relies on people searching for the terms ‘flu’ or ‘influenza’ and it turns out we tend to over-react to a dose of the sniffles.

Google Flu Trends’ failure illustrates two important things about big data – the veracity of the data coming into the system and the validity of the assumptions underlying the algorithms processing the information.

In the case of Google Flu Trends both were flawed; the algorithm was based on incorrect assumptions while the incoming data was at best dubious.

The latter point is an important factor for the Internet of Machines. Instead of humans entering search terms, millions of sensors are pumping data into system so bad data from one sensor can have catastrophic effects on the rest of the network.

As managing data becomes a greater task for businesses and governments, making sure that data is trustworthy will be essential and the rules that govern how the information is used will have to be robust.

Hopefully the lessons of Google Flu Trends will save us from more serious mistakes as we come to depend on what algorithms tell us about the data.

Tomorrow Starts Here

Managing big data is one of the future skills of business.

Today was the main day of the Melbourne Cisco Live Conference; the company’s annual Australian event.

Much of the talk was around the Internet of Everything — which will be the basis of subsequent posts — with a constant theme around the explosion of data.

A favourite statistic was that of Cisco’s Executive Vice President who pointed out that US Department store Walmart collects 2.5 Petabytes of customers data every hour.

The reason for this was pointed out by GE’s Australia and New Zealand CIO, Mark Sheppard, who pointed out that twenty years ago jet engines had few sensors while today they have hundreds, a point also made by Team Lotus’ Engineering Director Nick Chester to Networked Globe.

Chester observes that when he started in Formula One racing two decades ago, there were four or five sensors on a racing car; today Lotus’ vehicles have over two hundred.

All of these sensors are creating massive amounts of data and the big challenge for businesses is to manage all of this information, something we’ll be exploring over the next few weeks.

Synergies aren’t easy money

Avis are finding Zipcar’s synergies aren’t as great as they hoped, perhaps they’re looking in the wrong place.

Last year car rental giant AvisBudget acquired the vehicle sharing service Zipcar, at the time it looked like the established player was buying in the tech smarts of younger startup.

Citing ‘synergies’ at the time of a takeover is always a warning sign that a corporate acquisition may not go well and so it has proved with Avis’ efforts with Zipcar as travel news site Skift reports;

Speaking at the J.P. Morgan Gaming, Lodging, Restaurant & Leisure Management Access Forum in Las Vegas earlier this week, AvisBudget CEO Ron Nelson said fleet-sharing has turned out to be more complicated than the company thought because there’s a cost tied to moving the vehicles from one location to another.

That’s a strange statement as a casual observer would be forgiven for thinking that if any organisation understood the costs of moving vehicles around it would be a car hire company.

Apparently that’s not the case and the ‘synergies’ from acquisition will be pushed back to 2015.

Synergies are elusive things and it may well prove that Ron Nelson would be better served by examining how Zipcar’s technology, algorithms and flat management structures can be applied to a more staid organisation like Avis.

The real value in companies like Zipcar and Uber is the way they are applying technology to moving physical goods around – it’s no surprise that Uber’s Travis Kalanick describes his ambition for the future of his company as being the Amazon for logistics.

For Avis, Zipcar’s opportunities lie in more that just enhancing the company’s fleet utilization; understanding the marketplace and predicting demand is where the real gains could be made.

Eliminating the donkey work

Ross Mason, founder of Mulesoft, sees Big Data as one of the challenges facing business

Mulesoft founder and CTO Ross Mason worries about how companies are going to manage the data generated by the Internet of Things.

“I don’t think we’re ready for the amount of data that these devices are designed to build up,” Ross observes in the latest Decoding the New Economy video.

Ross’ aim in founding Mulesoft was to eliminate the donkey work in connecting IT systems and he sees the data moving between enterprise applications being a challenge for organisations

“We have energy companies that have connected their smart grid systems to their back end systems and most of them delete almost all the data because of the cost of storing that much data without doing anything with it.”

“Big data is still in the realm of we’re figuring out the questions to ask.” Ross states, in echoing the views expressed by Tableau Software founder Pat Hanrahan a few weeks ago.

“There’s a little bit of hype around big data right now, but it’s a very real trend;” Hanrahan said. “Just look at the increase in the amount of data that’s been going up exponentially and that’s just the natural result of technology; we have more sensors, we collect more data, we have faster computer and bigger disks.”

The interview with Ross covers his journey from setting up Mulesoft to the future of big data and software. It was recorded a few days before the company announced a major capital raising.

Mulesoft’s elimination of software ‘donkey work’ is another example of how the IT industry is changing as much of the inefficiencies are being worked out of the way developers and programmers work.

In many ways, Ross Mason’s story illustrates how the software industry itself is being disrupted as much as any other sector.

The Internet of Racing Machines

Formula One racing gives us a glimpse of the technologies that will be commonplace in businesses in the near future.

For the Formula One racing circuit, the financial crisis of six years ago was an opportunity to reinvent the sport; today the teams use a combination of technologies to gain an advantage over their competitors.

“A few years ago you wouldn’t have been here today,” Francois Puentes, Head Of Account Management at Team Lotus told a group of journalists ahead of this week’s Melbourne Grand Prix. “F1 was a completely different sport.”

The 2009 financial crisis was the catalyst for the changes Puentes says; “we all sat down as teams at the same table to make the sport more sustainable, this obliged us to run the sport as a business.”

“Before we didn’t know what the unit cost was for a part. We would very often produce two of the same parts without even knowing what was going on.”

To tighten their management systems, Lotus bought in a range of cloud based business software such as Microsoft Dynamics and also accelerated its adoption of computerised manufacturing techniques.

Speeding up development

Lotus employs over 500 people to keep its two cars on the road and most of the vehicles parts are designed and manufactured at its headquarters in Oxford, England. During the season the team’s workshop may produce up to five hundred replacement or redesigned components each week.

This brings together a number of technologies including Computer Aided Design, 3D Printing and cloud computing.

The internet of racing machines

Massive rule changes have also accelerated Formula One’s adoption of in car technology with information being gathered from sensors throughout the vehicles.

During races data is transferred from the vehicles’ sensors by radio for the teams’ crews to analyse performance. This includes information like gear box temperature, tyre condition, and aerodynamic performance data.

Following the race larger volumes of data are downloaded from the vehicle for engineers to tune the car for the next event.

While Lotus has teamed with technology companies like Microsoft and EMC, rival team Caterham partnered with GE whose Global Research team worked to integrate the technologies demanded by the new F1 rules.

Global technology

Caterham’s cars use intercoolers developed in Germany, carbon fibre composites and fibre optic sensors from the United States, and big data analysis techniques developed in India.

Key to gathering that data are sensors throughout the vehicle that capture a constant stream of data about forces acting on the car during the race, transmitting this information in a far more efficient way than traditional methods which relied on load sensors attached to the suspension.

The result is massive volumes of raw data. On the track, Caterham cars generate 1,000 points of data a second from more than 2,000 data channels. Up to 500 different sensors constantly capture and relay data back to the team’s command centre for urgent analysis.

Learning from Big Data

By applying what the company has learned from its Industrial Internet projects, GE was able to help Caterham cut its data processing time in half, leaving the team in a stronger strategic and tactical position.

Thanks to these analysis techniques, the Caterham team can look at slices of its data across an entire season, pinpoint setups that were particularly effective, and identify reliability issues earlier.

Inside the vehicle, GE has also found a way to replace metal pipes with carbon fibre, reducing the overall weight of the vehicle.

These technology developments will continue to find applications beyond the 2014 Grand Prix season.

Carbon composites are being used extensively in the aviation industry and big data analysis is playing an important role in the renewable energy sector.

Lewis Butler, Caterham’s chief designer, says working with GE is helping the team deepen its skills base.

“GE are working with Caterham to help with the manufacturing process and knowledge transfer, and giving Caterham F1 Team the capability to manufacture its own parts,” he says.

All the Formula One teams are using Internet of Things technologies to gather information on their vehicles, Big Data tools to manage that information along 3D printing to accelerate their research and manufacturing processes.

The Formula One world is a glimpse into the future of business as various technologies come together to change the way industries operate.

Paul travelled to the Melbourne Grand Prix as a guest of Microsoft and Team Lotus.

Using data laws to create an economic advantage

Will the EU data laws give European business a competitive advantage?

Yesterday I posted piece on Business Spectator about Australia’s new privacy regulations, little did I know that the European Union Parliament was about to release its own.

The EU regulations look interesting and certainly seem on first look to be far more comprehensive than Australia’s effort that I describe as a toothless, box ticking exercise.

A notable aspect of the EU’s announcement of the new rules is its claim that the updated regulations are expected to generate €2.3 billion in economic benefits each year.

Whether the EU’s rules prove to be an economic cost – as Australia’s effort will almost certainly turn out to be – or a competitive advantage remains to be seen, however the European Parliament is certainly making a case for data security and privacy protection as being an important selling point in a highly competitive digital world.

The competitive advantages between countries and continents in the 21st Century will be vary different to those that determined the economic winners of the previous two centuries.

Customer service is no longer a department

Customer service needs to pervasive through modern organisations says Salesforce’s Alex Bard

When it comes to customer service businesses, Alex Bard calls himself a ‘career entrepreneur’, having founded four startups in the field since the mid 1990s.

In 2011 he sold his most recent business, Assist.ly, to Salesforce and became the company’s Vice President for Service Cloud and the Desk.com customer service offerings.

Bard tolds Decoding the New Economy last week how social media and Big Data are radically changing how organisations respond to the needs of their clients.

“I’ve been in the industry for twenty years and I’ve never been excited as I am now,” Bard says. “The real transformational things that’s happening now are these revolutions – the social revolution, the mobile revolution, the connected revolution.”

The philosophy of customer service

“What they’re really driving is this idea that customer service is no longer a department, it’s a philosophy.”

“It’s a philosophy that has to permeate throughout the organisation. Everybody in the company has a role in support. It’s not just about a call centre or a contact centre or even an engagement center which is what these things are called today.”

“I really don’t like the word ‘centre’ because I really fundamentally believe that everbody in that company has to interact with customers, has to engage and has to the information – no matter they are – about that customer to provide context.”

Abolishing the service visit

With the Internet of Things, Bard sees GE’s social media connected jet engine as illustrating the future of customer service where smart machines improve customer service.

“They’re going to capture more data in one year than in their entire 96 year history prior,” says Bard. “With that data they’ll be able to analyse and do things on behalf of that product or service that’ll reduce the number of issues.”

“Because the best service of all is one that doesn’t have to happen.”

In this respect, Bard is endorsing the views of his college Peter Coffee who told Decoding the New Economy last year that the internet of machines may well abolish the service visit.

“Connecting devices is an extraordinary thing,” says Coffee. “It takes things that we used to think we understood and turns them inside out.”

“If you are working with connected products you can identify behaviours across the entire population of those products long before they become gross enough to bother the customer.”

For Alex Bard, the customer service evolution has followed his own entrepreneurial career having evolved from being personal computer based in the 1990s to today’s industry that relies on cloud computing, big data and social media technologies.

As these technologies roll out across industry, businesses who adopt the customer service philosophy Bard describes are much more likely to adapt to the disruptions we’re seeing across the economy. Changing corporate cultures is one of the great tasks ahead for modern executives.

Seeing the full picture

Data visualisation service Encompass is an example of finding a business opportunity from a scarring experience.

Being able to make sense of data is one of the challenges of modern business.

In the case of data visualization service Encompass, the business was founded after its founders were caught out by not knowing all the information behind business deal.

The latest Decoding The New Economy video is an interview with Roger Carson and Wayne Johnson, the co-founders of Encompass, a cloud based data visualisation company.

Encompass takes corporate information such as credit information and business registration details and renders it into a form that’s easy to read for salespeople, bankers or anyone doing due diligence on an organisation or individual.

“A lot of it is about bringing the information together and making it usuable and simple to use,” says Wayne. “If you can’t get that information easily and it takes relationships with lawyers to put it all together or your own legal advisor takes a long time to get this together, it’s costly and you may miss things.

Wayne and Roger’s path to starting Encompass came from being caught out in a property deal where it turned out some of the business partners wouldn’t have passed close examination.

“The property venture we went into was not a success,” Roger explains. “If we had known about the people and the properties and the companies involved on the other side of that transaction we probably would not have got involved in it.

“The genesis of this product really came about because we were involved in a transaction where we didn’t have the full picture, we couldn’t get the full information quickly and we therefore realised there had to be a better way for people to look at commercial transactions and get the full picture.”

It’s often said that information is power, but the real power lies in being able to understand the data we’re being flooded with. Encompass are a good example of the new breed of business that’s helping others deal with the masses of information we’re all being inundated with.

Could the Internet of Things grow by fifty times?

Cisco Systems’ Visual Networking Index forecasts M2M data traffic will grow fifty fold in the next four years.

One of the annual events in the tech world is Cisco’s Visual Networking Index, the company’s survey of internet traffic trends.

The numbers, as always, are staggering and this year Cisco are forecasting that global internet traffic will grow by a factor of eleven over the next four years to 190 exabytes – that’s 190,000,000,000,000Mb or the equivalent of 19o billion hard drives.

What’s particularly fascinating about this year’s index Cisco forecast that by 2018 there will be more mobile devices on the planet than people.

Many of those devices will be the sensors and equipment that makes up the Internet of Things (IoT), or Machine to Machine (M2M) technologies and Cisco expects the internet traffic in this area to surge fifty-fold over the next four years.

This is remarkable as most of the M2M devices don’t use much data as the vast majority only need to send out the odd short signal – as opposed to smartphones that download megabytes of information each day.Cisco’s predictions underscore just how pervasive this technology is going to become in the next few years, the challenge for us is to understand how to use and protect the masses of data these systems are going to generate.

Uber and the evolving business model

Where does the future lie for car hire service Uber?

Last year we looked at Uber and speculated the software that runs the business positions the company to be more than just a hire car booking service with applications in logistics and other sectors.

This week Uber’s CEO Travis Kalanick is getting plenty of coverage in the media with extensive profiles in both the Wall Street Journal and Wired.

Wired’s profile of Kalanick and Google raises Uber’s potential in logistics, funded by a $258 million fund raising led by Google Ventures last August.

“We feel like we’re still realizing what the potential is,” he says. “We don’t know yet where that stops.”

While Wired speculates about how Uber would perform against Amazon and Walmart, the car service is different in being more of a big data play than its established, possible competitors.

The three businesses would be very different creatures in the way they would address consumer markets, it may even be that Uber is more suited to being a B2B or wholesale operation rather than a retailer like Walmart.

Interestingly Kalanick looks at a target of 2,000 staff by the end of this year reports in his Wall Street Journal interview.

Mr. Kalanick: We have 550 employees. That’s approximate. We’re definitely going to be well over 1,000, maybe in the 1,500 to 2,000 range [by the end of 2014].

Having a staff target so high is interesting, it certainly indicates Kalanick sees plenty of growth ahead in the business.

Connecting the vending machine

Vending machines are leading the way in adoption of the internet of machines

Wired Magazine’s Klint Finlay speculates why Coca-Cole would want sixteen million MAC address for their vending machines.

That Coca-Cola has connected all their vending machines shouldn’t come as a surprise, probably the only thing moderately unusual from this story is that the soft drink company organises its own hardware rather than getting the machine manufacturers to do it.

Vending machines being connected isn’t new, back in the days of dial up modems some of the more advanced one would use phone lines for basic diagnostics.

Today most vending machines have a cellular connection used for payments, stock monitoring, fault warnings and vandalism detection.

A visit to my local swimming pool today showed this, the Coca-Cola branded machine machine outside the change rooms offers credit payments and in the not too distant future will probably include some sort of NFC type option.

On top of the the machine is a little aerial for the back to base communications. So the device can validate and bill cards, report back when stock levels are low and alert operators to anything untowards happening.

A big opportunity for the soft drink companies and their distributors is analysing the information about buying patterns at various locations — it’s a classic Big Data play.

So it’s not surprising Coca-Cola has registered a block of MAC addresses as the company will probably need several more 16 million blocks in the not too distant future as more of their operations from bottling plants to vending machines require unique connections.

Vending machines are a small but obvious example of how the internet of things is evolving, in the near future most consumer devices will have similar options.