IBM: Think Big, Harder, Slower

February 28, 2015

i read “IBM Says Cloud, Mobile, and Data Businesses Will Reach $40 Billion by 2018.” The write up reports that IBM has some “strategic imperative.” I assumed that sustainable revenue growth and healthy profits were important. Well, maybe.

Computing and IT services giant IBM will spend $4 billion on its cloud services, data analytics and mobile businesses in a bid to turn it into what CEO Ginni Rometty said will be a $40-billion-a-year-in-revenue business by 2018. On a conference call ahead of its annual investors presentation in New York, Rometty said the three businesses, which she referred to as IBM’s “strategic imperatives,” have grown in overall importance as it has divested itself of its older traditional business units. Five years ago the divisions amounted to 13 percent of IBM’s sales, Rometty said. By the start of 2015 they accounted for 27 percent.

Not long ago, Watson was going to be a $10 billion business. IBM should be proud of these projections.

The hitch in the cloud, analytics, and mobile git along is that there are a few other outfits with the same idea. A couple of these companies seem to have some traction in the cloud and mobile markets.

With regard to analytics, IBM has some useful technologies. The problem is that the company does not know how to deliver solutions that generate sustainable revenue. As a result, a number of smaller firms are jockeying for lucrative US government contracts and deals with smaller firms eager to take advantage of more advantageous prices for comparable services.

The write up points out:

Rometty said IBM will also do more partnerships with other companies similar to deals announced last year with Apple to jointly sell and develop mobile software, and a deal announced earlier this month with SoftBank to bring the Watson cognitive computing system to Japan. The result, she said, will be “IBM reinvented again.”

Sounds great. Like HP, IBM is doing MBAish activities. Stakeholders will be looking for answers about job security, stock and dividends, and sustainable growth. So far I see marketing, stock buybacks, and fast dancing.

I don’t want to dance with Watson, the system that generates recipes requiring tamarind. Judging from the comments on the Alliance@IBM Web site, there are some internal issues that IBM must manage as well.

Stephen E Arnold, February 28, 2015

Taxonomy Turmoil: Good Enough May Be Too Much

February 28, 2015

For years, I have posted a public indexing Overflight. You can examine the selected outputs at this Overflight link. (My non public system is more robust, but the public service is a useful temperature gauge for a slice of the content processing sector.)

When it comes to indexing, most vendors provide keyword, concept tagging, and entity extraction. But are these tags spot on? No, most are good enough.

image

A happy quack to Jackson Taylor for this “good enough” cartoon. The salesman makes it clear that good enough is indeed good enough in today’s marketing enabled world.

I chose about 50 companies that asserted their systems performed some type of indexing or taxonomy function. I learned that the taxonomy business is “about to explode.” I find that to be either an interesting investment tip or a statement that is characteristic of content processing optimists.

Like search and retrieval, plugging in “concepts” or other index terms is a utility function. For example, if one indexes each word in an article appearing in this blog, the article might be about another subject. For example, in this post, I am talking about Overflight, but the real topic is the broader use of metadata in information retrieval systems. I could assign the term “faceted navigation” to this article as a way to mark this article as germane to point and click navigation systems.

If you examine the “reports” Overflight outputs for each of the companies, you will discover several interesting things as I did on February 28, 2015 when I assembled this short article.

  1. Mergers or buying failed vendors at fire sale prices are taking places. Examples include Lucidea’s purchase of Cuadra and InMagic. Both of these firms are anchored in traditional indexing methods and seemed to be within a revenue envelope until their sell out. Business Objects acquired Inxight and then SAP acquired Business Objects. Bouvet acquired Ontopia. Teradata acquired Revelytix
  2. Moving indexing into open source. Thomson Reuters acquired ClearForest and made most of the technology available as OpenCalais. OpenText, a rollup outfit, acquired Nstein. SAS acquired Teragram. Smartlogic acquired Schemalogic. (A free report about Schemalogic is available at www.xenky.com/vendor-profiles.)
  3. A number of companies just failed, shut down, or went quiet. These include Active Classification, Arikus, Arity, Forth ICA, MaxThink, Millennium Engineering, Navigo, Progris, Protege, punkt.net, Questans, Quiver, Reuse Company, Sandpiper,
  4. The indexing sector includes a number of companies my non public system monitors; for example, the little known Data Harmony with six figure revenues after decades of selling really hard to traditional publishers. Conclusion: Indexing is a tough business to keep afloat.

There are numerous vendors who assert their systems perform indexing, entity, and metadata extraction. More than 18 of these companies are profiled in CyberOSINT, my new monograph. Oracle owns Triple Hop, RightNow, and Endeca. Each of these acquired companies performs indexing and metadata operations. Even the mashed potatoes search solution from Microsoft includes indexing tools. The proprietary XML data management vendor MarkLogic asserts that it performs indexing operations on content stored in its repository. Conclusion: More cyber oriented firms are likely to capture the juicy deals.

So what’s going on in the world of taxonomies? Several observations strike me as warranted:

First, none of the taxonomy vendors are huge outfits. I suppose one could argue that IBM’s Lucene based system is a billion dollar baby, but that’s marketing peyote, not reality. Perhaps MarkLogic which is struggling toward $100 million in revenue is the largest of this group. But the majority of the companies in the indexing business are small. Think in terms of a few hundred thousand in annual revenue to $10 million with generous accounting assumptions.

What’s clear to me is that indexing, like search, is a utility function. If a good enough search system delivers good enough indexing, then why spend for humans to slog through the content and make human judgments. Why not let Google funded Recorded Future identify entities, assign geo codes, and extract meaningful signals? Why not rely on Haystax or RedOwl or any one of more agile firms to deliver higher value operations.

I would assert that taxonomies and indexing are important to those who desire the accuracy of a human indexed system. This assumes that the humans are subject matter specialists, the humans are not fatigued, and the humans can keep pace with the flow of changed and new content.

The reality is that companies focused on delivering old school solutions to today’s problems are likely to lose contracts to companies that deliver what the customer perceives as a higher value content processing solution.

What can a taxonomy company do to ignite its engines of growth? Based on the research we performed for CyberOSINT, the future belongs to those who embrace automated collection, analysis, and output methods. Users may, if the user so chooses, provide guidance to the system. But the days of yore, when monks with varying degrees of accuracy created catalog sheets for the scriptoria have been washed to the margin of the data stream by today’s content flows.

What’s this mean for the folks who continue to pump money into taxonomy centric companies? Unless the cyber OSINT drum beat is heeded, the failure rate of the Overflight sample is a wake up call.

Buying Apple bonds might be a more prudent financial choice. On the other hand, there is an opportunity for taxonomy executives to become “experts” in content processing.

Stephen E Arnold, February 28, 2015

Hewlett Packard: The Dodge Em Method

February 27, 2015

I read an interesting article called “Hewlett Packard Tries to Duck Investors with Virtual Meeting.” I thought it was hip to do meetings via Skype and the plug in on my Xenky.com Web site. Guess not.

The write up makes a point that I don’t consider when firing up the tele-meeting software. Here’s the passage I noted:

Hewlett Packard’s recent decision to ditch its annual shareholder meeting in favor of a virtual one is just bad corporate governance. The forum gives ordinary shareholders their one chance each year to directly question and even confront the CEO and board of directors. And when it comes to HP, investors should be asking plenty of questions.

Ah, corporate governance. I thought this was an area reserved for Wharton business school instructors. You know, Wharton, one of the fonts of management perspicuity for eager consultants and CEOs to be. (I wonder what “governance” means: Good decision making, prudent use of financial resources, innovating, generating sustainable revenue?)

The article points out the MBA type reasoning that HP management seems to be using. There’s a reference to the Autonomy flap, cost savings, and, of course, the somewhat lackluster financial performance.

I don’t agree with this statement:

Under Whitman, a former eBay CEO, HP has stabilized.

Like IBM, these large “information technology” companies are a bit like a whale stuck in a small bay. Everyone arrives to help, but in most cases, there is not much to be done. A confused whale is pretty much a challenge for everyone involved. When a whale thrashes before its death, I want to be standing well away from the creature.

I suppose that’s why I am confused about what HP is doing with the Autonomy technology. Some of the zeros and ones date from the mid 1990s. I don’t drive a 25 year old automobile. HP apparently plans to sell some.

Stephen E Arnold, February 27, 2015

Google and Decision Making

February 27, 2015

Well, guess what? I read an allegedly true story. Google has changed its management mind about the type of images permissible on Blogger. Navigate to “Google Won’t Ban Adult Content on Blogger after All.” Here’s the passage I noted:

“This week, we announced a change to Blogger’s porn policy. We’ve had a ton of feedback, in particular about the introduction of a retroactive change (some people have had accounts for 10+ years), but also about the negative impact on individuals who post sexually explicit content to express their identities,” says Jessica Pelegio, Social Product Support Manager at Google. “Blog owners should continue to mark any blogs containing sexually explicit content as “adult” so that they can be placed behind an ‘adult content’ warning page.”

Google is free to do what it wants unless a nation state does some saber rattling and discriminatory legislative actions.

For me, the important point is the speed with which a decision is made and then reversed. I assume this type of fluid problem solving is one of the reasons that Google is a shape shifter when it comes to Google Plus, which seems to be undergoing disaggregation. Note Google Plus is the future of Google, but disaggregation is the way to handle the alleged Facebook-type service.

Agile is as agile does.

Stephen E Arnold, February 27, 2015

Celebrating Claude Shannon

February 27, 2015

A certain website dedicated to knowledge and discussion, Edge, poses a question each year in the hope of provoking a thoughtful conversation. This year’s question, for example, is “What do you think about machines that think?” Very timely. However, I’m here to recall a nugget from 2012, when journalism professor and author of The Wikipedia Revolution Andrew Lih penned an answer to that year’s question, “What is your favorite deep, elegant, or beautiful explanation?”

Lih’s response is titled “Information Is the Resolution of Uncertainty.” I suggest you read the whole post—it isn’t that long. It traces the beginning of the information age to 1948, when under-sung mathematician, engineer, and cryptographer Claude Shannon coined that definition: “Information is the resolution of uncertainty.” Shannon’s perspective was informed by his experiences during World War II, when then-new technologies vastly complicated issues of protecting, and eavesdropping upon, critical information. Lih writes:

“As long as something can be relayed that resolves uncertainty, that is the fundamental nature of information. While this sounds surprisingly obvious, it was an important point, given how many different languages people speak and how one utterance could be meaningful to one person, and unintelligible to another. Until Shannon’s theory was formulated, it was not known how to compensate for these types of ‘psychological factors’ appropriately. Shannon built on the work of fellow researchers Ralph Hartley and Harry Nyquist to reveal that coding and symbols were the key to resolving whether two sides of a communication had a common understanding of the uncertainty being resolved.

“Shannon then considered: what was the simplest resolution of uncertainty? To him, it was the flip of the coin—heads or tails, yes or no—as an event with only two outcomes. Shannon concluded that any type of information, then, could be encoded as a series of fundamental yes or no answers. Today, we know these answers as bits of digital information—ones and zeroes—that represent everything from email text, digital photos, compact disc music or high definition video.”

It does sound simple, but this binary approach to information was a unique and startling perspective. Lih traces the development of every digital invention that shapes our modern world to this extensive thought experiment. Claude Shannon went on to influence his students as a professor at MIT, many of whom later built such things as digital modems (and later wireless communications), computer graphics, data compression, and artificial intelligence. Lih laments that Shannon does not get the credit he deserves, and would like him to be widely remembered as the father of the information age.

Cynthia Murrell, February 27, 2015

Sponsored by ArnoldIT.com, developer of Augmentext

A Dark Search Engine

February 27, 2015

If anyone mentions the dark Web or the invisible Web, most people would make a Star Wars reference and insert a Darth Vader quote. While getting in touch with your “dark side” can help even out your personality, searching the dark Web reveals a whole new world of information. The only problem is that there isn’t a strict search engine for it. Wired explains that “Darpa Is Developing A Search Engine For the Dark Web.” Darpa is creating a dark Web search engine to help law enforcement discover patterns and relationships in online data about illegal activities.

“The project, dubbed Memex, has been in the works for a year and is being developed by 17 different contractor teams who are working with the military’s Defense Advanced Research Projects Agency. Google and Bing, with search results influenced by popularity and ranking, are only able to capture approximately five percent of the internet. The goal of Memex is to build a better map of more internet content.”

The search engine’s main goal is to have a one-size-fits all approach to search results. The data will not only be pulled from the same places commercial search engines crawl, but also the dark Web hidden sites that include TOR network’s Hidden Services. The Memex team also want to automate methods to analyze the data to save law enforcement research time.

Memex is only a tool for uncovering the dark Web, how it is used depends on the organization. It is estimated Memex will cost between $10-20 million to fund.

Whitney Grace, February 27, 2015
Sponsored by ArnoldIT.com, developer of Augmentext

Google: Circling the Semi Virtual Wagons

February 26, 2015

Google has an interesting track record with nation states, supra national agencies, and regulators.

Google has a new Euro boss, Matt Brittin. According to “Here’s Everything We Know about Google’s new European Boss Matt Brittin,” he is tall and:

Born in 1968 in Walton-on-Thames in Surrey, England, he was educated at Hampton School and Robinson College before leaving home to study at Cambridge University, where he earned a Master of Arts in Land Economy and Geography.

Also, according to “Google Shakes Up European Units in Face of Tougher Rules,” the GOOG is following in Yahoo’s footsteps  by trying to get organized in Europe. You may have to pay to access the Financial Times’ article.

Net net: After 15 or so years in business, the lads in Mountain View are circling their virtual wagons in EC land.

Will the shift be enough to satisfy the regulators presiding over a somewhat shaky financial and political tie up? My hunch is that regulators will regulate. Perhaps some juicy penalties or taxation fast dancing will be announced.

Exciting for Google which is facing push back about its real estate dreams in Mountain View, annoyances in China, and the on going European saber rattling.

Google will have to stand tall. The new GOOG Euro boss should be able to see over the well coiffed heads of the regulators.

Stephen E Arnold, February 26, 2015

IBM and the Functioning Assumption

February 26, 2015

I read “Could IBM Really Function with Tens of thousands Fewer Staff?” I think this is an interesting headline. It contains an assumption that IBM is indeed functioning with its present staffing levels.

The write up moves blithely forward offering up:

According to a recent report from India, IBM reduced its India-based workforce from about 165,000 in 2011 to 113,000 in 2014. The report quoted sources close to IBM’s plans who said this number will fall to 100,000 in 2015. The introduction of modern technologies that make services less labor-intensive is reducing the need for staff in lower-cost locations. At the same time, IBM, like much of the industry, is trying to move away from linear business models based on the provision of full-time equivalents. And talk of IBM cutting swathes of staff is nothing new. In 2010 a senior HR executive at the company told Computer Weekly’s then sister publication, Personnel Today, that IBM was looking into the possibility of cutting its workforce by almost 300,000. He said the strategy would involve making people redundant and rehiring them on a project-by-project basis. It would have reduced IBM’s 399,000 workforce to 100,000 by 2017.

Bloomberg reported:

IBM’s global employee count fell for the second year in a row, the first two year decline since 1993-1994. Even before the 2015 firings, IBM reported 379,592 employees at year end 2014, down 12% year on year (3.9% excluding divestitures). But there are allegedly 15,000 job openings, IBM claims.

Lots of figures. Lots of people. But let me go back to the word “functioning.” IBM, like HP, has been around a long time. The company’s notion of agility is to market wild and crazy ideas with zest. I see Watson as an example of the new IBM. Open source technology and home brew code. The search system is presented as a “basket brand” into which many different and discrete products and services have been gathered.

The challenge remains. The company has to generate sustainable revenue that yields a profit. So far that seems to be very difficult. I struggle with the “functional” assumption. Perhaps Watson has the answer?

Stephen E Arnold, February 26, 2015

Amidst the Google News, a Titbit about YouTube

February 26, 2015

The Wall Street Journal and then Web information services reported that YouTube is not making Google much money. Maybe none? I liked this comment in “YouTube Still Doesn’t Make Google Any Money”:

Google wants people to start coming to YouTube’s homepage in the same way they would turn on the TV — expecting that they’ll find consistently high-quality content on different channels. … The company also redesigned its homepage and tried to improve its video recommendation to hook users into staying longer.

Google has been wrestling with YouTube since 2006. Interesting that the company has not cracked the money problem in almost a decade. Do you know the difference between Google Videos and YouTube? Maybe an extra cost burden like owning two Bugatti Veyrons?

And, yes, I used the less common version of “titbit” which nudges the meaning of “scandal” in the sense of spending twice and getting no financial love in return.

Stephen E Arnold, February 26, 2015

Interface Changes for Google Mobile Search

February 26, 2015

Google is the top search US search engine for many reasons and it can maintain this title because the company is constantly searching (pun unintended) to improve its products and services. Google wants to deliver high quality search just as much as it wants to stay ahead of its competition. Mobile search is one of the most competitive digital markets and Google has developed ways to augment its already popular mobile application. BGR highlights the new changes to its mobile search as described in “Google’s Latest Mobile Search Change Brings Some Key Interface Changes.”

One feature that changes is the “Google box” that displays results that are supposed to be the best matches for a query. The Google box will also have a news carousel that lists the latest information on the query.

“ ‘When you search for a topic, just scroll down to see a ‘carousel’ of recent articles, videos or more on that subject,’ Google Search product manager Ardan Arac wrote in a blog post. Tap any link to read or watch exactly what you’re interested in. For example, if you search for NPR, you’ll see links to all their latest articles and videos.”

Google is doing its best to improve mobile search, a task that has usually evaded mobile devices. Mobile technology needs to have more features that are readily available on laptops and computers to make them more reliable and useful.

Whitney Grace, February 26, 2015
Sponsored by ArnoldIT.com, developer of Augmentext

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