software | Paul Wallbank - Communications Professional

When artificial intelligence becomes pervasive

Artificial intelligence is shaping up to the next battleground between vendors, but users won’t really care as long as it works.

Once upon a time computers were unusual, getting time on one was only for select employees of large corporations and scientists. Famously IBM’s Tom Watson forecast there would only be a need for five computers, although it seems he never said that.

Today we’re surrounded by computers in everything from our cars and phones to our teapots and razors and now we’re considering how those devices will affect our future workforce.

At the core of the discussion about computers and the future of work, is artificial intelligence. What’s notable though is it’s unlikely that AI is going to be an competitive advantage for technology vendors as the functions become built in.

This is already being seen with Microsoft building AI into its databases and increasingly the intelligence is going to built into the chips themselves.

In our recent interview with Xero founder Rod Drury, he flagged how AI is going to drive small business accounting. Drury was speaking at the Sydney AWS summit where the hosting company was showing off many of its AI driven services.

While artificial intelligence is going to be embedded and almost invisible to the user, it is going to be important. A good example is Google’s struggle to maintain quality and honesty in its local search results, a process that is beyond the company’s resources if done manually.

For the software vendors, the quality of their AI features is going to be one of their key selling points. This is why AWS, Amazon and almost company in the industry is announcing their own initiatives. Google itself should be one of the leaders in this field.

As automation becomes increasingly taken for granted, artificial intelligence is going to be seen as a fundamental, and invisible, part of computing.

While AI is going to be essential for the technology vendors, for users we won’t notice it as long as it works properly.

Beating the shock clock

Dell Boomi’s CEO, Chris McNabb sees being part of an empowered Dell as his company’s advantage against the newly listed Mulesoft.

With a range of tech companies floating as corporations lose their appetite for acquisitions, companies like Boomi which was bought by Dell in 2010 believe they have an advantage over competitors like Mulesoft which have to answer to the public markets at sky high valuations following their recent stock market listing.

If Chris McNabb, CEO of Dell Boomi, is concerned about his competitor’s successful IPO, he wasn’t showing it when he spoke with Decoding the New Economy at a restaurant in a Sydney office park last week. With Mulesoft’s stock popping 45% on the first day of trade, attention was on how his company would react to such a vote of confidence in his market rival.

“We continue to grow very rapidly, well north of market growth rates. I think you’ll see us consolidate our position at the top of most boards in terms of the number of customers. If you look at Mulesoft’s S1 (the company’s official stock offering document) it shows them with around 1,078 customers while we have 5,300 customers. We almost have an unfair competitive advantage.”

Part of that unfair advantage McNabb cites is the breadth of services now offered by Dell’s merger with EMC where he flagged an increased push across the organisation’s sales team starting in the second half of this year.

“For us to say six months ago that we’d sit here and say that the merger of two 25 billion dollar plus businesses could be bedded down is really saying something. I think it’s one of the best integrations that I’ve ever seen.”

“For Boomi it’s been terrific and continues to be terrific. We get unequivocal support from executives, Michael Dell and the ELT – Executive Leadership Team – has been nothing but a hundred percent supportive.”

“Now we’re looking at what we can do with the EMC Solutions sales team, what we can do with our brothers in the strategically aligned businesses, specifically Pivotal, Virtustream and VMWare. What are the opportunities to go to market more collaboratively with them?”

Boomi’s recent ManyWho acquisition fits into that range of offerings and McNabb believes the workflow platform’s role as a tool helping CIOs manage their organisations’ transitions to cloud services will be a compelling offering.

“Workflow automation – redoing business processes in a structured and an unstructured way – was always a key strategy of ours.”

“Hybrid IT is here for the next ten years, so how do we enable it so customers can buy all the best of breed software they want yet still have a suite like experience?”

“We believe hybrid IT is creating challenges for CIOs and as you get all these different cloud applications from vendors you’re breaking apart your ERP and creating an integration problem and you’re creating a data management problem along with governance, API management and orchestration.”

“It’s our vision to give CIOs the unified platform the necessary fundamentals in cloud services to address these issues.”

With a solid market position in North America, McNabb sees the Asia-Pacific as the big growth driver for Boomi with channel partners leading the company’s expansion across the region.

“Worldwide EMEA is going through a ton of growth and this region (APAC) is going through a ton of growth. Our expectation is this region will have the highest growth rates – Australia, New Zealand, South East Asia, these are key target areas.”

“If I look at things strategically and how important the channel is to us, is it’s a force multiplier as it allows you to get entire teams being certified and ready to go across regions. It also helps execute in a better way in local markets, you have to be in a region in a big way and if you can get really good certified partners you can do that much better and faster than if you’re hiring and building it yourself.”

Returning to the topic of Mulesoft, McNabb sees not being part of a publicly listed company as one of Boomi’s big advantages.

“We don’t operate on a ninety day ‘shock clock’, we know what the market’s growing at, we know what our platform is capable of, we know we’re going to raise our targets. There isn’t increased pressure to perform.”

“As it turns out, those in the public eye do have the ninety day shock clock to attend to and it will be interesting to see how those first, two, three or four quarterly reviews go. I’ll certainly be an eager listener to their investor calls.”

Ultimately though, McNabb thinks Mulesoft’s IPO and it’s 45% pop on listing vindicates Dell’s ongoing investment in Boomi and the potential of the cloud integration marketplace.

“I look at it as a terrific validation of the marketplace…. It’s good for everybody.”

Facebook’s challenge in executing for the enterprise

Workplaces by Facebook is the social media giant’s push into the enterprise computing market. Its success isn’t assured.

Workplaces by Facebook was is the social media giant’s enterprise collaboration service it hopes will put the company into the enterprise space.

Like many similar products, the service is aimed at improving collaboration in the workplace. As the media release gushes, “the new global and mobile workplace isn’t about closed-door meetings or keeping people separated by title, department or geography. Organizations are stronger and more productive when everyone comes together.”

On first impressions, Facebook should score some successes with the service however it’s success is far from guaranteed. As we’ve seen with other major company’s attempts to open new products, being the deepest pocketed player doesn’t automatically ensure a successful product.

The Google example

A common assumption when a behemoth enters a martketplace is will simply smother smaller competitors by virtue of its size.

History shows this not always the case, Facebook itself thrived despite the huge threat posed by Google+, indeed Google is probably the best example of a large corporation that struggles outside its core business.

Part of the reason for the idea of big companies easily squashing the little folk being a fallacy is that the smaller companies are more focused on their problem – for a corporation the division is one part of a broader operation run by managers, not owners.

In such a marketplace, execution and management focus matter so Facebook’s success will depend as much on executive buy-in as the resources thrown at the product.

Cost and complexity

A notable thing about Workplaces by Facebook is its partner network, led by Deloitte. This is not a good sign.

The need to have consulting partners – particularly huge and expensive companies like Deloitte – is not an encouraging sign for the nascent service and may be a barrier towards adoption.

A separate issue in Deloitte’s involvement is how cloud services, which we include Workplaces by Facebook, are buddying up with the major consulting firms with everyone from Huawei to Oracle entering arrangements. While this might help partners squeeze a few more pennies out of their hapless clients, it’s doesn’t seem to be in the vendors’ or customers’ interests.

Trust

What happens to users’ data is a perennial problem for Facebook and it’s notable this issue isn’t mentioned in the announcement.

Facebook’s success shows consumers are relaxed about how the company uses data but that attitude may not be shared by managers and business owners.

The proprietor of one reasonable sized startup said, “I have a slight concern about giving Facebook any access to my company information. Whilst it has been fine from a personal perspective I feel the trust level is not strong enough to warrant handing over access to, effectively, everything.”

Overcoming that objection may be one of the biggest challenges for Facebook being accepted as an enterprise tool.

Becoming an enterprise service

Facebook’s push into the enterprise isn’t surprising and indicates that as the company matures, something more than the advertising funded consumer market is needed to drive its growth.

That consumer background is a strength for Facebook as the consumerization of enterprise software is an established trend. Having an interface and tools that are familiar to most staff is very attractive to managers looking at introducing new platforms with the shallowest possible learning curves.

However the ultimate question is what need does Workplaces by Facebook address? There’s no shortage of collaboration platforms that offer most of the futures offered by the platform.

If Workplaces by Facebook does address a genuine need in enterprise workplaces and the company’s management can maintain its focus on the product then the service may be a success. That isn’t a given though.

Tools for new businesses

What are the basic online tools for business? Here’s a quick list on what small and startup businesses can use to get online quickly and cheaply.

What are the basic online tools for business? Here’s a quick list on what small and startup businesses can use to get online quickly and cheaply. This list will be updated regularly and please let us know if there’s anything we should add.

Email

Gmail

Documents

Google Docs

Microsoft Office 365

Open Office

Storage

Google Drive

Dropbox

Box

Websites

Blogger

Wix

WordPress

Accounting

Xero

Saasu

MYOB

Social media

Google My Business

Facebook

Collaboration

Messaging

What’s App

Workplaces @ Facebook

Google Hangouts (being depreciated)

Analytics

Google Analytics

KissMetrics

Tableau

Customer support

Zendesk

Desk.com

Payments

PayPal

Stripe

Seeking salvation in the cloud

In a time of flat markets, companies struggle to find their next growth drivers. Software companies are hoping cloud computing will be their salvation

Oracle CEO Mark Hurd’s keynote at the company’s Open World conference in San Francisco yesterday illustrated a problem facing businesses around the world and its effects on enterprise software vendors like the one he heads.

“Standard and Poor’s top five hundred companies’ revenue growth is at one percent, their earnings growth is five percent.” “It means what? Expenses are going down.”

“This is the problem that the CEO has,” he says. “Why is it hard to grow revenue. All your investors want you to grow earnings and deliver growth. They have little patience for any long story about why it’s so hard.”

“They don’t care about any issues you may have. Grow earnings, grow cash flow, grow stock price. That’s it.”

Growing in a slow market

As a result of that the easiest way to grow earnings is to grow revenues but when global GDP and markets are flat, the only way to grow is to gain market share, Hurd says. “We have to know the customer better, we have to do a better job of marketing and we have to do a better job of aligning our goods and services to what our customers want. We have to improve our products and processes.”

That imperative for companies to cut their operating costs has had a brutal effect on enterprise IT budgets, “over the past five years, the growth in enterprise IT has been flat.” Hurd says, “the growth in spending has been basically zero.”

Customers drive the market

Like many things in the tech industry, the sector’s growth focus has shifted to consumers, “consumer spending on IT has almost quadrupled in the past decade. So while companies are sort of flat, consumers have been spending like crazy.” Hurd observes, “consumers are more sophisticated, more capable, more knowledgeable and expect better services than ever before.”

“Your customer experience is not being defined by your competitors but by technology fuelled consumers. For instance, AirBnB may be defining customer experience for the hospitality industry.”

“People are using a lot of social technologies in their personal lives,” “we expect ease of use, simplicity, clean interfaces are now things we expect in the enterprise side.”

Crimping innovation

In the enterprise IT sector, Hurd believes the flat market means many companies catering to the corporate market are skimping on Research and Development which in turn is crimping innovation, a factor compounded by cloud providers taking an increasingly larger share of the market.

This is underscored by cloud leader Amazon Web Services spending over ten billion dollars a year on R&D. Hurd’s boast that Oracle is spending half of that shows how the legacy players are struggling.

What stands out in Hurd’s keynote is how legacy providers see cloud computing as their salvation. However Amazon’s dominance in that space is a major obstacle for them.

For consumers, big and small, the shift to the cloud has been a good thing in shaking up the existing industry and making new technologies more accessible to smaller customers. For existing businesses like Oracle, there’s a challenge in adapting to a lower margin, commoditized and quickly changing market.

A bigger question though facing all large corporations, not just software companies, is this new normal of low economic growth. Succeeding in that environment is going require a completely different management and investor mind set to that of the last seventy years.

Autodesk and the China manufacturing challenge

China’s focus on R&D is changing the country’s manufacturing outlook which has major consequences for the rest of the world.

At the recend Autodesk University event in Sydney I had the opportunity to talk with Pat Williams, the company’s senior vice president for Asia Pacific.

Williams’ beat covers all of Asia and he’s based out of Shanghai where he’s been based for the last eight years and prior to that he spent a decade in Japan.

Having spent so much time in North East Asia, and heading to the PRC the following week myself, it was interesting to hear Williams’ views on how industry is changing in China and ther country’s attitude to American software companies.

“There’s a lot of noise that gets made in China about their local IP and the local vendors and what I say is ‘the Chinese companies are competing in a global market and they are under the same competitive pressures as everybody else in the world so when they find a better tool they use it. Despite all the noise, business is quite good there.”

For the Chinese economy, the aging and increasingly expensive workforce presents a problem, something addressed by the China Manufacturing 2025 plan which sees the country increasingly competing in high tech sectors such as aerospace, telecommunications and biotech fields.

“China’s kind of an anomaly,” says Williams of the country’s immense growth rates. “From a government perspective there’s a lot of horsepower behind the things that they do – China 2025, their manufacturing initiative, you’ve got what they’ve been doing with Building Information Modelling (BIM) and our architectural tools.”

They’ve really kind of spearheaded what we’ve been talking about on things like 3D printing of houses. China on its own is just this mushroom that’s happening.”

While the industrial shift in China and the rest of Asia is promising opportunities to companies like Autodesk, that change is affecting their workforce as well with the company announcing plans to lay off ten percent of their workforce earlier this year.

Those cutbacks are part of the adjustment to a new market reality says Williams, “it was part of right sizing the business.” He observed “we realised our margins were going to be compressed as we move to a subscription model.”

Autodesk’s shifts illustrate how the opportunities in the new economy don’t come without costs even for the companies that seem to be winners in a shifting marketplace.

In China, American companies are finding they have to a unique proposition – companies like Apple and Autodesk are good examples – and as the country moves its economy further up the value chain all foreign businesses are going to have to show how they add value.

Succeeding in a changing economy isn’t without uncertainty. And it certainly isn’t without risks.

Uber opens its APIs

Uber makes its APIs available to the general community

Ride service Uber has raised the game for logistics and delivery services in opening a group of Application Program Interfaces for third party developers.

The four functions available in the Uber Rush package cover delivery tracking, quotes and history. They make starting a logistics service or adding functions to a business far easier.

While there is a downside in the risk of being locked into Uber’s service this move will give a lot of developers the opportunity to develop delivery tracking products, for incumbent postal and courier services, this API is bad news on a number of levels.

Rethinking cancer research

Can business software reorganise the way cancer is studied? Netsuite founder Evan Goldberg thinks so.

Netsuite founder Evan Goldberg hopes the lessons he’s learned from building a software company can help researchers find new ways to treat cancers.

When Netsuite founder Evan Goldberg was contacted by his birth mother it was not all good news, she revealed to him she had one of the BRAC genetic markers, an hereditary trait that indicates a high risk of breast cancer.

A day before the official launch of the BRAC Foundation he has founded with a ten million dollar donation, Goldberg spoke to Decoding the New Economy at the Suiteworld conference in San Jose about how he believes he can help improve the treatement of cancers.

“How I think I can make a difference is applying some of the things we’ve learned at Netsuite,” he explained. “Netsuite has been all about breaking down silos, it’s not a system to run a department, it’s to run a business.”

“Much research and money is focused on a particular type of cancer – breast cancer, lung cancer, prostate cancer but it turns out from what we’ve learned from genetic research that cancers can be more similar to each other across different cancer types than to those in the same organs.”

“So in the same way we’re trying to break down silos between parts of a business, trying to break down silos between researchers, different institutions has sort of been a theme of mine.”

“What’s really interesting this notion of looking at where the cancer started, which is what we’ve been doing for a hundred years, looking at what is the mechanism underneath it is kind of how we’ve looked at business at Netsuite.”

“We’re supporting research in the BRCA Foundation from numerous different institutions and researchers that are looking at all different types of cancer. So bringing them together and cutting through all sorts of silos, these sort of artificial silos – some of which still have value in some ways – but fostering collaboration where there wasn’t any before.”

“It’s not a perfect analogy,” Goldberg admits, “but I do think that this notion of looking at cancer across different dimensions is similar to how we’ve been looking at business.”

“It’s a totally different world, the world of medics, research institutions, hospitals and clinicians, it’s a very different world to the businesses I’m used to deal with. Although there are still similarities in the motivations and the barriers to success.”

One has to hope BRAC Foundation will be successful however Goldberg is the first to admit the bulk of the work lies with the scientists. “The real hard work is done by the researchers,” he says. “Hopefully we can help them.”

Getting academics onto the cloud

Discount and free software programs are good for educational programs but they do risk industry wide vendor lock in.

Offering free products to students and academics has long been a tactic used by software companies to build their market presence. The current fight for dominance in the cloud is seeing the same tactics being used.

Last week I had the opportunity to talk to Amazon Web Services’ Glenn Gore about his company’s academic support program.

Part of that conversation ended up in a story for The Australian about how researchers are now using cloud computing services and it’s worthwhile looking at how AWS are using this program to cement their products’ market positions.

“We work with the majority of universities across Australia,” Gore said. “It’s part of an international focus around how we support the education sector in general.”

In some respects AWS’s behaviour isn’t new, for years Microsoft, Autodesk and Adobe have had programs offering free or deeply discounted products for academic or student use. The success of those schemes in becoming defacto industry standards is no small reason why these companies have dominated many sectors.

Microsoft themselves have the similar Bizspark program for tech startups and it’s easy to see how that initiative is helping push Azure’s adoption into a field that has been dominated by AWS.

One of the drawbacks though with cloud computing services is the risk of ‘sticker shock’ where customers end up with big bills. One of the universities I spoke to in researching the story recounted how 0ne of their faculties was presented with a huge AWS invoice because their engineers didn’t provision the services correctly.

This is where AWS’s team steps in with advice for researchers, “in the case of Koala Genome Project use the on-demand model, the standing pricing model for the cloud,” recounts Gore in pointing out the nature of their work could use spot-pricing to take advantage of cheaper prices in off-peak times. “As a result of making that one change they were able to do eighty percent more research.”

Getting more research time is always attractive for researchers and Dr Rebecca Johnson who leads the Australian Museum’s part of the koala consortium was particularly effusive about the support from AWS staff,

“What we have been able to access via this partnership with AWS is compute time and compute capacity that we just would not have had access too,” Dr Johnson said in a media release. “It would have cost us thousands and thousands of dollars to create and we just would not build such a computer system these days. You would not create your own computer infrastructure as we would only use a fraction of it anyway. So, it is great for us to piggy back off these already built systems.”

Being a relatively small institution, the Australian Museum is a good example of how cloud computing can work for those without the resources of big universities or corporations in the same way small businesses and startups can access resources formerly only available to enterprises.

Amazon’s programs though show the Microsoft model of getting students and startups onto their systems early pays dividends. It’s good for academic institutions but one wonders whether it’s also another form of vendor lock in.

Reaping the security dividend

Digital disruption is driving boards and executives into realising the value and importance of cyber security, Cisco claims.

Boards and executives have finally got the message about security John Stewart, Chief Security and Trust Officer at Cisco.

For most of the computer era security has been seen as an inhibiter to innovation and speed to market, but now with most businesses finding they face a three year time frame to transform in face of digital disruption Stewart says corporate managments now see security of their products as being a valued feature.

Stewart bases his view on an online survey, Cybersecurity as a Growth Advantage, where Cisco polled 1,014 senior executives with extensive cybersecurity responsibilities in 10 countries and 11 in-depth interviews with senior executives and cybersecurity experts.

From this, Cisco found a third of businesses now sees security as being a competitive advantage.

Digital disruption drives the shift

Stewart puts this down to boards and senior executives realising how widespread digital disruption is, “it’s highly unlikely Weight Watchers saw the disruption coming from Fitbit,” he muses. “In fact it’s hard to see how anyone could have seen that coming.”

As a consequence of these widespread and often unexpected disruptions, corporate leaders are trying to shore up their existing positions against unforeseen competitors by shifting to digital platforms as quickly as they can.

“We have to do digital and if we are going to do digital we have to have strong cybersecurity controls,” says Stewart in explaining why cybersecurity is an important part of this strategy.

Security as a cornerstone

“By making cybersecurity a cornerstone of their businesses, security-led digital organizations are able to innovate faster and more effectively, because they have significantly greater confidence in the security of their digital capabilities,” Stewart says.

Certainly managers are worried about the risks of going digital with Cisco reporting many businesses have put projects on hold due to concerns about security risks, “a lack of cybersecurity strategy can cripple innovation and slow business, because it can hinder development of digital offerings and business models.”

According to Cisco’s findings, seventy-one percent of executives said that concerns over cybersecurity are impeding innovation in their organizations. Thirty-nine percent of executives stated that they had halted mission-critical initiatives due to cybersecurity issues.

Encouraging moves

While the possibility that corporate leaders are taking cyber security seriously is encouraging, that change is yet to be seen in the marketplace, particularly in the consumer Internet of Things market where being first trumps security, design considerations or even basic safety.

The real test for how important cybersecurity really is remains in the marketplace — will customers pay more for secure products?

One sense that in Cisco’s marketplace of enterprise customers where security failures could have expensive, embarrassing and possibly catastrophic consequences, customers will pay more for trustworthy devices. In the consumer field it may well be different.

Probably the most important finding from Cisco’s survey is that businesses are now understanding security has to be designed into products and processes rather than being bolted on as an after thought. If that is true, then we have come a long way.