Palantir: $300 Million Not Enough?

June 30, 2013

I spotted a blog post called “Could Palantir Technologies Be Raising Additional Funding?” I have no clue who or what is behind this interesting item. The main idea is that Palantir, a high profile company which has been in the news about litigation and other matters, has been funded already. According to Crunchbase, the company has more than $300 million in funding. For the sake of comparison, Attivio and Coveo — both in the content processing space — have been able to drum up about $30 million in funding. Most of the companies in the search and content processing space — Digital Reasoning, for instance — have garnered a fraction of what long time players Attivio and Coveo have been able to gather. At the time of its sale to Oracle, Endeca — another content processing and intelligence vendors — was generating an estimated $150 million in revenues. At the time of its sale to Hewlett Packard, Autonomy was nosing into the $800 million range. But the key figure for Autonomy is that it sold to the prescient managers at HP for more than $10 billion.

Let’s assume that Palantir has received funding in the $300 million range. Let’s assume that the company is not raising any additional funding. Let’s assume that the company, founded in 2004, is going to pay back its investors, operate at a profit, and fund necessary research to keep the content processing system in step with competitors like Cybertap, among others.

So what does the gargantuan funding suggest to me, this fine, humid Sunday morning in rural Kentucky?

First, revenue in the Endeca range or even the Autonomy range, may not be enough to meet investors’ targets. Expectations for big plays are rarely in the credit union savings account range. To hit a 10x return, Palantir has to be in the $3 billion per year range. That works out to 3X the revenue of Autonomy and 30X plus Autonomy’s revenue? How may companies today selling content processing are in this $3 billion club? According to my data, not too many. Based on the information I monitor, no search or content processing company has hit this type of revenue goal since I have been monitoring the 200 companies in the Overflight service.

Second, the $300 million funding may be a signal that doing advanced search and content processing is not just expensive. The costs are quite high and may be difficult for Palantir’s senior management to predict. (Perhaps the company needs some of Recorded Future’s technology to get the money thing parameterized?) Will the costs of creating, supporting, and innovating a service like Palantir whet the appetites of big bucks investors for Palantir or stimulate a flow of revenue into one of the dozens of start ups in the space? Will, for example, Quid benefit?

Third, perhaps the massive funding is a form of stage dressing for a high profile, super sized sale of the company. Could large firms be jockeying to bid eBay-style for Palantir. The idea is that if so much smart money has flowed into the firm, a more IBM-style or GM-style management approach can uncork massive revenues and even more gigantic profits? I can formulate this question, “Is the Palantir cash appetite a prelude to the main course; that is, the blockbuster sale later this year or in 2014?”

A Palantir professional asked me recently, “Why do you ping Palantir?”

Answer: Heck, it is an anomaly in funding, in litigation, and in getting media attention. Why wouldn’t I pay attention to Palantir? I have zero interest in writing about the actions of a government entity. Last time I checked, a retired person approaching 70 years of age can do research and summarize it, offer an opinion, and ask questions, right?

I have a goose as a logo. Maybe I am angling for a stand up comedy gig at the local open mike night in a big city not far from Harrod’s Creek? Ever think of that? I don’t think investors who do not get their money back are going to be in a receptive frame of mind for my brand of humor? I did not need Recorded Future to predict that, by the way.

Stephen E Arnold, June 30, 2013

Sponsored by Xenky

Google Ready to Vie with Amazon Web Services

June 30, 2013

We thought Amazon was looking at Google’s technical presentations and papers, then moving more quickly along paths on which Google was dallying. Now ZDNet informs us that the search giant is stepping up in, “Google Sets Up to Challenge Amazon Web Services.” The article reports:

“Google’s move to make its Compute Engine generally available sets up an duel with Amazon Web Services. Keep in mind that Google is playing catch up, but a recent set of moves should make things interesting.

“On Wednesday, Google took the wraps off the Google Compute Engine. It also moved to support PHP, a popular programming language, with Google App Engine. At Google IO 2013, the search giant had a key track for its cloud platform. Engineers talked persistent disk, redundancy, scaling, storage and pitched developers on spinning up an instance for less than 2 cents an hour.

“Presentations at Google IO included benchmarks showing better performance of Google Cloud Engine relative to ‘an unnamed competitor,’ which was obviously AWS.”

See the article for specifics, but the list of advantages shows Google can pose a strong challenge to AWS. Writer Larry Dignan notes that Google has the engineering experience, infrastructure, credibility, and finances to pursue a “cloud pricing race to the bottom.” Still, it is up to them to show customers why they should make the switch; support, established partnerships, and longevity are on Amazon’s side here. We shall see what happens as the competition continues.

Cynthia Murrell, June 30, 2013

Sponsored by ArnoldIT.com, developer of Augmentext

Lukewarm Anticipation for Google Glass

June 29, 2013

Why the harsh assessment of Google Glass? We think it is great. Unfortunately, it seems many do not share our opinion (yet). Infopackets reports, “Google Glass Already in Trouble, Survey Finds.” The article cites a study from Bite Interactive:

“A recent survey of 1,000 Americans found that only one in ten people would wear Google Glass technology on a regular basis. The survey, which was carried out by Bite Interactive, found that many Americans feel the device is ‘too socially awkward.’. . .

“‘Google Glass represents a profound social barrier for the average consumer,” noted Joseph Farrell, executive VP of operations at Bite Interactive. (Source: informationweek.com) ‘At best, they see a Glass user as someone who prioritizes information access over a personal connection with others. At worst, they fear social sleights of hand: researching topics, recording video or Googling a person in mid-conversation.'”

I suspect that the social discomfort part will fade away; after all, most of us have adapted (with a good deal of grumbling) to the constant presence of smartphones and the social strains that has brought. I would also submit that ten percent is not bad for expensive, bleeding-edge tech that isn’t even ready for market yet. It seems, though, that the hefty price tag of $1,500 is only part of the issue; almost half of the respondents would have no interest even if the price were to plummet.

For those who are interested, the hands-free camera is the biggest draw. That leads me to suspect that the survey is very premature—we cannot begin to know what the capabilities of this device will be once app developers have had time to tinker. Seeing what they come up with is the part I am most excited about. I suspect that, as apps get added, more and more folks will see something to like in the Glass.

Cynthia Murrell, June 29, 2013

Sponsored by ArnoldIT.com, developer of Augmentext

Watson the Customer Service Rep

June 28, 2013

IBM’s Watson is becoming quite the renaissance machine. Since winning Jeopardy, the famous AI has done a stint on Wall Street, worked in the healthcare field, inspired students at the University of Southern California, and taken a stab at recipe creation. Now, Forbes informs us, “IBM’s Watson Now a Customer Service Agent, Coming to Smartphones Soon.” The article tells us:

“According to IBM, close to two-thirds of the 135 billion unresolved calls each year could have been resolved with better access to information, the search for which consumes six to eight minutes per call, on average. At each of the companies testing out Watson, the computer will be fed loads of product information from closely held databases such as catalogs, training manuals, product disclosures, terms and conditions, emails, customer forums, and call center logs, as well as publicly available feeds and reviews from places like Amazon, Yelp, Trip Advisor and technical support communities. In IBM’s tests using its own call centers and proprietary data, Watson delivered a 40% reduction in search time for information.”

Several businesses have already signed on as beta users. Australia’s ANZ Bank will be using the service to help with its private wealth management, while Nielsen (of TV ratings fame) plans to embed it into its media planning solutions. Some implementations will be employee-only, while others will be re-branded, obscuring the IBM technology at their core. No word yet on where consumers (besides wealthy Australians) can go to try out Watson’s customer service.

If nothing else, Watson is sure to be the best in the field at one thing—refusing to let customer irritation get under its skin.

Cynthia Murrell, June 28, 2013

Sponsored by ArnoldIT.com, developer of Augmentext

MaxxCAT Enhances Enterprise Search Applications

June 28, 2013

Specialized-hardware firm MaxxCAT has upgraded their enterprise search appliances while remaining one of the most cost-effective options in the field, we learn from “MaxxCAT EX-Series of Enterprise Search Appliances Enhanced with Upgraded Storage and Performance” at PRWeb. Mirrored index storage is one of the most welcome features. The write-up tells us:

“The EX-5000 and EX-6000, competitors of the Google Search Appliance, now start at 2 x 1TB of Index Storage. The improved hardware combines the appliances’ existing performance and reasonable cost with the security of redundancy for customers’ Index Storage.

“‘When you buy a search appliance, you want to get it started and then not worry about it anymore.’ said Zach Reinhardt, MaxxCAT hardware support engineer. ‘Knowing that in the event of a hard drive failure, their appliance will still perform gives our customers the peace of mind so they can concentrate on other projects.'”

Ah, stress reduction! All of MaxxCAT’s search appliances can index a wide variety of file formats with no document limits. The EX-Series perform 12,500 to 25,000 queries per minute for a very reasonable starting price that’s under $9,000. One year of email support and software updates are included, as is a one-year hardware warranty.

MaxxCAT sweetens the pot for any Google Search Appliance owners tempted to switch with its Google Search Appliance Replacement Program. This incentive combines either the EX-5000 or EX-6000 with access to MaxxCAT’s excellent Integration Services Group.

Founded in 2007 and based in Pittsburgh, MaxxCAT produces two high-quality product lines, search appliances and cloud-integrated storage, at some of the lowest price points around. The company also offers integration services and managed data hosting. A focus on performance, simplicity, and ease of integration keeps MaxxCAT at the fore of the high-performance field.

Cynthia Murrell, June 28, 2013

Sponsored by ArnoldIT.com, developer of Augmentext

At the Top of the BI Stack

June 28, 2013

Business intelligence tools are becoming a big priority for even small businesses. TopCultured supplies some guidance for those considering their options in, “The 4 Biggest Business Intelligence Companies.” We were a little surprised that writer Drew Hendricks included Microsoft on this list.

The write-up begins:

“Finding the meaning behind mountains of raw data can be a difficult task, especially for companies that have not been monitoring their processes on a regular basis. Keeping an eye on business intelligence can tell stories of new opportunities, potential verticals for growth, and identify dangerous problems, allowing companies to enact a solution.

“As business intelligence becomes more accessible to smaller companies and startups, with app developers driving mobile solutions, the need for BI-trained workers and software solutions goes up. Take a look at the four top business intelligence companies out there now.”

With that, the list begins. Roambi is lauded for being easy to use and interpret. YellowFin boasts a bird’s-eye-view of a company’s strengths and weaknesses. In at number three, Domo is flexible enough to be used throughout an organization. Microsoft‘s SharePoint—well, I suppose being “considered the industry standard” does give the veteran platform some standing.

See the article for more on each of these companies. Organizations would do well to carefully consider their needs and investigate all options before choosing a BI platform.

Cynthia Murrell, June 28, 2013

Sponsored by ArnoldIT.com, developer of Augmentext

Big Data Gets Bigger

June 28, 2013

Organizations are looking for Big Data solutions anywhere they can find them. And there are lots of options on the market. However, open source varieties are garnering the most attention for their affordability and flexibility. An Information Week article discusses some pros and cons in their article, “Big Data Pioneers Get Big For Their Britches.”

It begins:

“DataStax, the commercial support provider behind the Cassandra open-source NoSQL database, announced this week that is has seen ‘dozens’ of companies migrate from Oracle Database and Oracle MySQL to Cassandra over the last few quarters. The reason it’s happening, according to DataStax CEO Billy Bosworth, is that these organizations are seeking scalability, disaster avoidance and cost savings. I’ll buy in on scalability and cost savings. Cassandra can handle immense scale with replication and redundancy across multiple, global data centers.”

The author then goes on to say that while there are many compelling arguments for Cassandra, he doubts that this harkens the end of relational databases. And yet, we do not see people returning to Oracle or relational databases anytime soon. Solr 4 is also being used as a NoSQL option and benefits from its analytics capability. Apache Lucene Solr is the base of the industry leading LucidWorks solutions, which are also making headlines. We think this is good news for the enterprise, even if it may be bad news for Oracle.

Emily Rae Aldridge, June 28, 2013

Sponsored by ArnoldIT.com, developer of Beyond Search

What I Learned about IBM Watson from an Ad

June 27, 2013

I opened my dead tree version of the Wall Street Journal this morning and what did I see? A news story about the mining industry’s woes? An article probing Google’s most recent, top secret initiative? An interview with someone at the Fed about the bond excitement? Nope.

I saw a full page ad with the headline “How Watson Helps Answer Big Questions with Big Data.” I read the ad in the context of this news story: “Documents Sow IBM Layoffs in North America Now Top 3,000.”

The ad does not reference IBM’s struggles with its own core businesses. The ad asserts that IBM has a system which can help a company deal with Big Data. Here’s the passage I noted:

IBM Watson is one example of a new form of computing: an advanced cognitive system built to analyze and extract knowledge from vast amounts of largely unstructured data with unparalleled speed and results. Since its triumph on Jeopardy! in 2011, Watson’s power has been applied to healthcare, finance, education, and government. And its users are starting to find new ways to help their employees, clients, customers, and citizens.

The case examples do not include IBM’s own use of Watson.

The article includes a quote which I heard in my days at Booz, Allen & Hamilton (a now well known outfit):

“Half the money I spend on advertising is wasted. The trouble is, I don’t know which half.”—John Wanamaker, whose empire is now part of Macy’s.

My thought was that an ad about Watson without providing hard facts about how Watson is helping IBM deal with its own business is interesting. The logical jump to the uncertainty of advertising was surprising as well.

Net net: Is Watson recommending the staff cut backs or is it basic cost reduction? My hunch is that Watson may be asking, “Do I have job security?” Or, “Is their an opening in advertising for a Big Data smart system?”

My personal question, “Is Watson fully employed in a job for which a new form of computing is uniquely qualified?”

And that’s how, on a smarter planet, answer leads to answer, and progress builds on progress. To learn more, visit us at ibm.com/watson.

Okay. Layoffs. Progress.

Stephen E Arnold, June 27, 2013

Sponsored by Xenky,

Profits Key in Evaluating Mobile Market Success

June 27, 2013

Tech writers have it all wrong when it comes to evaluating success in the mobile sector, says Tech.pinions‘ John Kirk in, “Android’s Market Share is Literally a Joke.” The article is the first in a series that examines the way we determine who is ahead in the mobile field.

In this entry, Kirk begins with a long list of recent headlines trumpeting Android‘s huge share of the mobile market, then explains why those who declare Google’s Android ahead based on market share alone are missing the big picture. He writes:

“Scoring by market share alone and ignoring profit is like saying that a hockey team won because it had more shots on goal when the other team had more goals.

“Market share without context is not only useless, it is worse than useless because it is likely to be misinterpreted.

“First, market share without context assumes that each percentage of market share is equal to another – that every Android activation is equal to an iOS sale. Nothing could be further from the truth. . . .

“Second, market share without context implies that market share is a zero sum game – that market share gains for one always result in a loss to another. But in a rapidly growing market, a company can actually LOSE market share yet have both positive unit sales and profit growth.”

Good points. See the article for Kirk’s in-depth discussion and appeal to reason. Essentially, he insists market analysts should focus on what really matters—a high ratio of profits to market share. Going by this more logical metric, Apple still dominates the field.

It is an interesting analysis. If current declarations of Android’s success are overblown, what effect will that have on Google‘s mobile search revenues in the long run?

Cynthia Murrell, June 27, 2013

Sponsored by ArnoldIT.com, developer of Augmentext

Prediction and the Future of Augmented Cognition

June 27, 2013

The article titled Augmented Cognition: A Future for UX, on UX Matters, discusses the philosophical dangers and innovations possible through prediction. The article uses the example of Doug Engelbar’s demo from 1968, in which he demonstrates technology like video-conferencing and hypertext that would not be completely grasped for decades. Augmented cognition, the article explains, “is about understanding the state of a user’s brain and using that understanding to manage the user’s interaction with a computer.” The article states that 2000, millions of dollars have gone into augmented cognition research. It states,

“While sophisticated systems are in use in research environments, simpler devices are available for home use… I have a lightweight headset called the MindWave, from a company called NeuroSky. I can use this headset to monitor my brainwave signals. It’s reasonably comfortable to wear …providing enough data of sufficiently good quality to enable me to interact with a range of applications. As the technology continues to reduce in size and obtrusiveness, we’ll be able to introduce these devices into more fields.”

These exciting developments are aimed at employing adaptive interfaces, supporting training and making analysis more efficient. The research in managing information overload would benefit users such as soldiers or air traffic controllers. In time the technology hopes to enable stressed out users to manage several competing demands on their attention at once.

Chelsea Kerwin, June 27, 2013

Sponsored by ArnoldIT.com, developer of Augmentext

Next Page »